Operations Review, Amiens Sept. 14-15, 2009 - PowerPoint PPT Presentation

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Operations Review, Amiens Sept. 14-15, 2009

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  1. Operations Review, Amiens Sept. 14-15, 2009 • Eric Meyer, EGS, President • Bill Estes, EGS, VP of Operations • John Peterson, EGS, EVP International Sales • Andy Schwegel EGS, VP Marketing & Business Development • Don Young, EGS, VP HR AGENDA • Key messages, Organisation, Page 5 Hofs • Bridges, EX248, EX243, Aging, EX245 Hofs • Customer service, ITC Muresan • Operations Thickett • Procurement, EX120, EX109, EX247 Danciu/Monteil • Planning, EX245, EX134 Douchet • Engineering, Cost reduction, NPD Rus • Quality, EX135 Lefranc • EX123/125/135/Environment/Reach Thickett • Organization, EX252, EX253, Safety Legrand • Closing Comments Meyer

  2. Yves,Key Messages • 2009 • Restructuring drives 27% HCC reduction Q4 to Q4 • Sales down 24%, - 8.0M€ • OP trending Up despite Sales declined • 2.8 days better in DICC • Beat Inventory target by 280K€ • Improve Cash Flow by 3.0M€ • 2010 • Target 28M in Sales (+ 7.5%), aggressively to win projects • OP: 4.5% to 11.0% • OP + 6.5 Pts (Material 1.3Pts, Mfg Sal. 1.7 Pts, SGA Sal. 2.5 Pts, Others 1.0 Pt) • Focus on service to customer • 30 days better in DICC 2

  3. Amiens Organization September 14, 2009 Temps follow up: G. Chevalier (Finance) Y. Bouillot (Hourly) J. Crabot (Procurement) A. Pecourt (Maintenance) V. Pegard (Accounting)

  4. Europe, CIS & Baltics, FS Africa, Sales OrganizationOrganization to Review as Thierry Left at end of August Executive VP of Sales J. Peterson

  5. Page 5: Sales & Profit to Plan (September 2009 POR)When Sales are Dropping, we are improving the OP • Initial Sales forecast at 39.9M • Q1 Sales collapse • Q2, shut down one week • Q4 headcount reduction plan and holidays accrual. • Current plan 26.0M

  6. Bridge FY09 Exp. versus FY08 Actual

  7. Exhibit 248: FY09Improvement of 2.8 in DICC Despite Drop in Sales

  8. Ex 245: FY09 Inventory Turnover & Velocity (Euro)Inventory Decrease of 2.0M€ (37.1%) From Sept 2008 Beat the 3,700K Target

  9. EX 243: FY09 DSOSignificant Improvement in Past Dues We now are under 80 days

  10. Aging, Initial target was : Initial Target was to Reduce our Past dues from 2,000K to 750K.We Have Been ahead Target for 6 Months. We are under 300K, at 30 days + • Actions done: • - Clean up old claims • - Monthly meetings • - Use existing resource in Cluj • Access to accounting system from Cluj • Call and check before payment due date • Review documentation of projects • Review credit notes • Solve litigation with customers

  11. EX 247: FY09 DPOFavorable Impact of the New French Law (LME)

  12. Page 5: FY10 Sales & Profit to Plan • Initial Sales forecast at 39.9M • Q1 Sales collapse • Q2, shut down one week • Q4 headcount reduction plan and holidays accrual. • Current plan 26.0M

  13. Bridge FR10 Exp. versus FY09 Actual/Expected

  14. EX248: FY10 DICCImprovement of 30 Days

  15. Ex 245: FY10 Inventory Turnover & Velocity (Euro)From 3.8 Turns to 5.0 ITO improve by 31%

  16. EX 243: FY10 DSO: Save 9.6 Days

  17. EX 247: FY10 DPO – 2 Days(New French Law at 60 Days Max)

  18. Exhibit 261 – FY10 Quarterly Price Changes

  19. Sinziana,Customer Service • Organization structure • Major Customer Issues • Improve communication • Trade Compliance

  20. Action Plan to Improve Communication, Logisticsand Service to Customer • Improve fill rates and service given to the customer • Good information at the right moment is crucial to succeed • Action plan Customer Service to have all information it needs to serve the Client • Cooperation between Logistics and Customer Service Departments • STEP 1: • 3 main meetings to analyze the orders and to take decisions • Participation from production, customer service, logistics, forwarding • Shared summary file built • STEP 2: • Common production file to follow up all current manufacturing orders • Real Time Updates by the production / buying; • No more lost time on exchanging e-mails and searching for data • STEP 3: • Implementing an automated report to track all changes in Manufacturing Orders • Morning update sent to the Customer Service Dept • Thus, client is aware in time at all changing in the dispatch dates

  21. Customer Service ImprovementsActual and Future • Communication with the customer: answering the phone • If problems in ATX – meetings, holidays, schedule etc • phone transferred to Romania • Communication internally: improving service brought to the customer • Weekly updates on orders follow-up: each customer service will present a status with its orders, no matter the value or the destination – internal Europe or Export

  22. Sinziana, ITC Officer for Amiens and ClujInvolvement in Trade Compliance • Export Self Certification • ATX got the official certification • Congratulations to all the team for their help and involvement • ATX Self Assessment • Up to September the 30th all EMR divisions are bound to submit this • 246-question self assessment • Changes in the general division scorecard: quarterly grades and • very seriously followed-up

  23. Eric, Operations • Agenda • Danciu/Monteil • Procurement, EX120, EX109, EX247 • Douchet • Planning, EX245, EX134 • Rus • Engineering, Cost reduction, NPD • Lefranc • Quality, EX137 • Thickett • EX123/125/135/Environment/Reach

  24. Razvan,Procurement Agenda • FY10 Net Material Inflation (4.8%) favorable • Tactical support of Amiens shifts to Cluj • PPV Tracked and Reviewed monthly • EX247 Days Payable Outstanding improves 11% to 87 Days • 12 Suppliers eliminated 37 more targeted for FY10 • Supplier Delivery Performance – issues identified & being addressed • Supplier Transition Issues

  25. Procurement OrganizationAttempting to Balance Strategic Cost Reduction & Tactical Plant Support Sept 2009 March 2010 Razvan Danciu European Sourcing Mgr. Plastics & Rubber Razvan Danciu European Sourcing Mgr. Plastics & Rubber Strategic Catalina Bumb Casting & Stamping Catalina Bumb All Commodities Caroline de Bruyne Resigned June 2009 Plant support Jennie Crabot Temp leaves Oct’09l Dominique Nicolas retires Mar’10

  26. Exhibit 109: Inflation Model FY09 -1.7 % Negative Material Inflation for FY09 !

  27. Exhibit 120 FY09 Actual (Sept 09) Left from original cost reduction program FR 09 Additional programs FY09 Actual Cost reduction FY09

  28. Exhibit 109 – FY10

  29. Net Material Inflation – FY10

  30. Net P&L Impact of Savings Programs Hedged 50% • 11% OP plan already a stretch • 932K Euro hedged back to 466K Euro • FY09 experience indicates Supplier hard tooling move delays likely • Some risk of Commodity inflation beyond identified 173K Euro / 1.4%

  31. Supplier Consolidation Program FY08 – FY09

  32. 1 - Resourcing ATX Plastic parts (SIP, 2MP) to E. Europe Project Owner: Razvan Danciu OverallStatus G Tooling transfer from French vendor is Difficult!

  33. 2 – Machined parts resourcing Project Owner: Catalina Bumb OverallStatus G

  34. 3 – Consolidate Mopos to ZLKL (CZ Rep) Project Owner: Catalina Bumb OverallStatus G

  35. 4 – Gasket Rationalization Project Owner: Razvan Danciu OverallStatus G Quick win! - Save 14 K € using by rationalization of 2 components

  36. EX 247: FY09 DPOImpact of the New French Law as of Jan. 2009

  37. EX 247: FY10 DPO

  38. Jean-Francois,Supplier Issues: Manage Mould Transfer • French law says that after a long relation, even without any written agreement, Buyer should give the Vendor a compensation based on a loss of margin when terminating the relation. Margin is calculated on the 12 to 18 past month purchases. • On top of this, vendors want to clean up some issues regarding additional cost • Mecaplast (France) manufacturing polycarbonate covers (yearly spend of 500K) Based on material price increase and change in raw material, we will pay 34K as a compensation, to get back our moulds before Oct.31, 2009 Moving to IBV Hungary, we are expecting 17K of monthly savings. • NP Vosges (France) manufacturing GRS boxes for control stations (yearly spend of 200K) Based on inventory in excess and available at Vendor, we will buy the pieces for 44K to get back our moulds before Dec. 31, 2009. There is a risk of 10K to 20K of slow moving and obsolete. Moving to KunPlast (Hungary), we are expecting 5K of monthly savings • Alu Livry (France) manufacturing aluminium die casting (yearly spend of 52K) Based on mould modification not yet invoiced by Alu Livry and done during the last years, we refuse to pay 43K, as monthly savings when moving to Metaz (Czech Rep.) are at 2K. ATX refuses to buy the inventory. We will spend 9K at Metaz to manufacture some die casting parts We will buy from Superkino (India) some sand casting parts We will continue to buy the rest of the parts from Alu Livry

  39. Thomas, Logistics & Distribution

  40. Improve Service to CustomerFill Rate by Line: 87% Fill rate by Orders at 66%: Target 80% Fill rate by line VS Fill rate by order (July) Mean: 87 % Mean: 66 % This is why operations and marketing have different views of our delivery performance

  41. Daily MTO and MTS Fill rate by line August 2009 Performance Fill rates: Where we do need improvement? • Class A Product availability (too many part numbers missing) • On Time Delivery on specials ( Fill rate at 62.6%) • Non standard product specification • Supply delivery performance • Process flow

  42. Class A MTS Product Availability: Target 95%142 Part Numbers, 62% of T’l Sales, 13 non Available August 2009 Z00833 - 2 Bal mono + 1 mod 100/280 220/240            093108 - Boitier d pour disjoncteur                 094754 - Hublot incandescent IIC 200W                      094959 - BAES d Fluorescent 8W                    095046 - Projecteur zone 2 250 W Iodure       096540 - Fluo silo 2x36W 1m20                                   96555 - Fluo e 2x36W M25 220/240V              096844 - Socle e 63A 3P+T 380-415V               097426 - Socle GP 16A 2P+T                           097723 - Socle GP 32A 2P+T 200-250V                        097727 - Socle GP 32A 3P+T 380-415V                        097728 - Socle GP 32A 3P+N+T 380-415V        20E1FX5 - PE M20 câble armé sans joint Root causesWho? • Quality improvement Eng./Quality • Vendor bankruptcy Procurement • Mould transfer Procurement • Issue anticipation Planning • Safety parameters review Planning • Vendor delivery performance Procurement • Inventory accuracy Production • Process flow/Capacity Production

  43. On Time Delivery on Specials and Projects,Current Fill 62.6%, Target 75% August 2009 Target 75% Order Tracking tool Actions:Who? - Continue and improve the order review meetings: Production, Engineering and Customer Service - Optimize engineering product definition (Double check ?) Engineering - Analyze of the folder by the production before production Supervisors - Better management of the inventory (fastening, labeling, cable, …) Supervisors and Production - Internally marking of all labels Production/ Procurement - Daily tracking orders and components availability Supervisors and Planning

  44. Supplier Delivery PerformanceMetrics Implemented – Now we Drive Improvement Started monthly review with vendors • Action plan –OTD% Improvement • Communicate and review delivery performance with Top 40 Suppliers / Quarterly • Met face to face with Top 10 Suppliers to drive improvement • Intent is to link Supplier Performance to award / retention of Business

  45. Average Efficiency: Target 45-50% will Accelerate Flow and Improve Lead Time August 2009: Amiens Efficiency by product line • Current issues: • Product definition not complete • Missing information on drawings (diameter, length between 2 holes,…) • Components not prepared, need to get them from another workshop • Components missing on products (employees have to prepare themselves) • Forklift not available when changing the fixture • Quality data sheet missing or non accurate • Actions: Who? • Better prepare the orders on Friday (usually we are losing time on Mondays) Preparers/Supervisors • Product definition Engineering/Quality • Large SS Boxes machined at vendor Vendor • Management/Organization Supervisors

  46. Ex 245: FY09 Inventory Turnover & Velocity (Euro)Inventory Decrease of 2.0M€ (37.1%) From Sept 2008 Beat the 3,700K Target

  47. Finished Goods Programs Reductions 1,109 K€ YTD Raw Material reduction programs: Potential Realized 1. Projects not shipped 300K€ 300K€ 2. Lightings in excess 200K€ 200K€ 3. Safety stock reduction 0K€ 300K€ 4. Lot size 0K€ 300K€ Total 500k€ 1,109K€

  48. Raw Material ProgramsReductions 852 K€ YTD Raw Material reduction programs: Potential Realized 1. Reduction of lot size 208K€ 290K€ 2. Delayed orders 60K€ 50K€ 3. Revise Forecast 0K€ 342K€ 4. Safety stock reduction 48K€ 130K€ 5. Supplier resource 63K€ 40K€ Total 500k€ 852K€

  49. EX134, Slow Moving Inventory ManagementFY09: Reduce Obsoletes, from 604K to 299K