Advanced Supply Chain

Planning at USG Planning at USG

Amy David, Logistics Planning and
Process Development Manager
Ian Cole, Supply Planner
Agenda
USG Overview
Building the Case for ERP
ERP Implementation
Copyright 2008 USG
Benefits and Lessons Learned
Question & Answer
2
USG Overview
USG Corporation
NYSE listed since 1931; Ticker: USG
$4.6 billion in sales in 2008
Leader in its 3 core businesses
North American Gypsum
Copyright 2008 USG
North American Gypsum
Worldwide Ceilings
Building Products Distribution
12,800 employees
107 years old
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North American Gypsum
Largest network of
facilities
Fewest miles-to-market
Vertically integrated
gypsum quarries and
paper mills
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paper mills
Most comprehensive
product offering
Sheetrock
Durock
Fiberock
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Worldwide Ceilings
Strong market position
Full product line
Focused on innovative solutions
Copyright 2008 USG
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Building the Case for ERP
Origins of Supply Chain Management at USG
Plant operations historically managed on a local / regional
basis
Introduction of new high-speed plants starting in 1999-
2000 made cross-region shipments cost effective
Supply Chain Management
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Supply Chain Management
organization established in
2000 to coordinate plant
operations and distribution
across the network
Established S&OP and
forecasting processes
Rainier, OR
Bridgeport, AL
Aliquippa, PA
East Chicago, IN
Plaster City, CA
Plasterco, VA
Oakfield, NY
Gypsum, OH
Fort Dodge, IA
Monterrey, MX
Fremont, CA
Rainier, OR
Bridgeport, AL
Aliquippa, PA
East Chicago, IN
Plaster City, CA
Plasterco, VA
Oakfield, NY
Gypsum, OH
Fort Dodge, IA
Monterrey, MX
Fremont, CA
1999 - 2001
1999 - 2001
New facility opened
Old facility closed
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Supply Chain Complexity
Complexity increases as the supply chain model begins to
reflect our real businessintroducing real-world constraints
Not all plants make or stock all products
Some plants warehouse products made at other plants
Plants ship across Sales Areas
Some plants can ship into other plants markets
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Some plants can ship into other plants markets
Some plants can service markets more cost-effectively than other plants
CSC
Sales
Sales
Sales
Plant
Sales
Sales
Sales
Plant
Increasing
complexity leads
to more risk and
greater potential
for service
disruptions, higher
costs
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Supply Chain Opportunities
Improve quality and consistency of plant-level forecasting
activities.
Connect production scheduling processes to overall supply
chain planning.
Establish consistent business rules and performance
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Establish consistent business rules and performance
measurements.
Reduce manual effort and errors caused by multiple IT
systems.
Answer key customer question: When will my truck arrive?
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Expected Benefits
Build a competitive
advantage by becoming
the easiest company to
do business with
Drive a fundamental
shift to network-focused
processes, business
rules, and information
management
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Connect disparate
processes to create an
overall process that fully
drives supply chain
operations
Provide the systems
capabilities required to
link supply chain
planning to production
planning and scheduling
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ERP Implementation
Oracle ERP Implementation
Implemented advanced planning in parallel with plant ERP
Oracle Demand Planning (ODP)
Oracle Advanced Supply Chain Planning (ASCP)
Other modules included: Cost, Manufacturing, Inventory, MSCA,
Shipping, and Financials
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2 Locations 5 Locations 6 Locations 10 Locations 13 Locations 10 Locations 12 Locations 8 Locations
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Plan Validation Process
Goal: Validate the Manufacturing Plan for each plant before Go-Live
Plant, Logistics, and SCM site teams work together to transition plants
to the new LinX Manufacturing Planning process
Identify and resolve data issues that would impact the ability to manage the
plant using the new planning and scheduling processes
Bring the plants up and running on the Manufacturing Plan
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Help the plant transition to running and trusting the new LinX planning
philosophies and methodologies
Establish a strong working relationship between the plants and Logistics that
will continue after SCM teams move on
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Key Enablers
Highly-skilled plant rollout and
training teams
Positive relationships with strategic
partners
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Clear, well-communicated vision
Strong PMO and QA entities
Team rewards and after-work
socializing
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Benefits and Lessons Learned
Improved Information
B
e
f
o
r
e
Limited visibility into the
supplies and demands of
other plants
Planning only manageable
at the product category or
family level
A
f
t
e
r
Global plans show
dependent demand from
other plants
ASCP and ODP handle
millions of data points for
detailed planning
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B
e
f
o
r
e
family level
Rough conversions from
finished good forecasts to
raw material requirements
Minimum quantities or
fixed lot sizes known
anecdotally by planners
detailed planning
Bills of Material exploded
to the lowest level and
summarized by material
All item data stored in
central database and used
in planning production
Benefits
Cost savings
Finished goods and raw material inventory reduction
Execution of strategic optimization
Fewer cross-region shipments
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Improved customer service
Increased first-call resolution
More accurate order promise dates
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Lessons Learned
Pre-deployment visits
Communication of overall vision
Change management must be a constant focus
Optimization rules
Limited data collection
Examine trade-offs between features and performance
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Limited data collection
Forecast consumption settings
Planning Time Fence control
Large volume of configuration options allow for continuous improvement
Custom data validation
Copy restoration
Data integrity is critical to successful plan run
Questions?