SUPPLY CHAIN MANAGEMENT

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 SCM Why we need it? Company Value
supply
< Demand

Key messages :
 Supply chain processes are made to reduce the risk of
non delivering customer demand…
 .. Because deliveries create the value for the company
 To do that, the target is to balance supply and demand
 SCM How does it work?
Resources / Supply Inventory Actual Demand
Capacity Orders (to cover supply issues & Orders Forecast
forecast error)

Supply Demand

Strategic Business Planning

Forecast Customer Demand

Demand Management
Sales and Operations Planning
Supply Capacity S&OP

Master Production Scheduling

MPS

Material Requirement Planning

MRP Key messages :
 Demand is made of forecast and actual orders
 Supply is made of resources, supply orders and
Factory inventory
 Inventory is used to cover supply issues & forecast
error
 Balancing is done at the different time horizons
 MANAGE SUPPLY CHAIN – Aris processes

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 Manage the Customer Demand
Using external data (Extrinsic forecasting techniques) :

Key messages :
 Forecast is always wrong Different Demand Scenarios
 Forecast accuracy needs to be monitored at all time to
improve
 Agreement on the scenarios used should be taken
before any balancing activity

Using historical trend and seasonality (Intrinsic forecasting Forecasting Horizon

techniques) : Run forecast model

ADJUST FOR
NEW
PROGRAM

Using qualitative informations (market analysis, expert opinions) Demand Consensus Meeting
:
 Manage Supply Chain Capacity (Internal & External)
Key messages :
 Capacity is the highest sustainable output rate that can be achieved with current resources,
Understanding what is balancing : maintenance strategies, product specifications, etc…
 Capacity utilization rate is the ratio between actual capacity and the maximum capacity
 The objective of balancing is to maximize capacity utilization rate without reducing product
quality or work conditions
 Always consider internal and external capacities, unless you can miss the bottleneck
 There is a strong link between increasing the supply and Lean/six-sigma projects

How can we improve the capacity?

Internal & External Load capacity

Safran

Suppliers
 Build Strategic Business Plan
Key messages :
 The strategic plan looks at the long term horizon (typically 5 years) and is reviewed once a year TOP MANAGEMENT
 Its objective is to decide on the level of key ressources that need to be implemented : BUSINESS PLAN MEETING
investment, equipments, critical resources
 Its is based on a marketing and industrial strategy
 It is validated by top management team

MARKETING & INDUSTRIAL

STRATEGY EQUIPMENTS OEE

HUMAN RESOURCES MANUFACTURING SPACE

 S&OP Process
Key messages :
 The S&OP looks at the tactical horizon (12 to 18 months) and is reviewed
once a month
 Its objective is to balance demand and supply on a monthly basis to meet
the needs of the customer at the lowest cost

Example of decisions taken during S&OP

executive meeting :
 Product transfer between 2 sites
 Industrialization of a site for a given
product
 Decrease extra working hours
 Reduce inventory levels
…

Product Transfer to
another site / location
 MFP - SQY

Load/capacity forecast for MFP engines line at SQY engine maintenance site
Load versus capacity for CHP and CBP (high and low pressure modules) Analysis and hypothesis
Demande hypothesis reminder :
HPC mecanics Quantity to offload (HPC) 2018 : 100 HPC, 81 LPC
2019 :
HP: 26 Offload in 2019 • 151 HPC including 121 GE 90/115 for SQY
• 146 LPC (including subcontracting)

Scénarii :
SQY capacity for HPC is 111 in 2019. 26 HPC will
need to be offloaded.
SQY capacity for LPC is 77 in 2019. 69 LPC will
need to be offloaded.

LPC mecanics • Effective hours: 1160h in 2018 and 1157h in

Quantity to offload (LPC)
2019
BP: 69 Offload in 2019 • Balance load and capacity for mecanics by
developping LPC competencies on HPC
mecanics
• LPC : high off load rate strating mid-2019

Conclusion :
First semester : capacity loss on LPC mechanics
and inspectors => productivity impact
HPC/LPC inspectors

Expected decision
Request to open a 2nd source of offload
starting 2nd semester 2019

Safran Aircraft Engines / Confidentiel / 7 Décembre 2018 / Direction Maintenance Réparation & Révision
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Commitment Meeting
 Commit on the plan to be
produced in each time period
such as production, staffing,
inventory, etc..
 Identify bottlenecks and
critical resources needed
 Commit on a schedule of
what the company expects to
produce and purchase
MPS fully integrated into ERP
 For any incident associated with:
Data to be uploaded into ERP:
 Production plan
 New Capacity objectives
& Inventory targets
Master Production Scheduling
MPS meeting outputs:
 Material constraints
 Capacity constraints
 Engineering readiness
 Production lead time
 Time fence commitment
 Production lot sizes
 Finished goods (including after
sales) to be produced
Internal & External Supply Risk
o Individual supplier failures
o Internal supply issue
The outcomes result in the
inability to meet customer demand
Quick response should be taken Risk is Fixed
 Material Requirement Planning MRP
Purchase Work Inventory Customer
orders orders level orders
Data output

MRP
BOM

Purchasing item parameters

Suppliers Lead Time & Lot Size

Manufacturing Lead Time

Logistics policy
 Roles and responsibilities are defined
 ABC XYZ item classification are set
 Logistics and inventory parameters are set
and correctly calculated  Parts shortages list
 Robust process to set up, maintain and  Late work orders Ultimate target
control all parameters is clearly defined
(including RASCI matrix)  Late purchase orders
 Safety stocks, Suppliers lot sizes, are set and
reviewed systematically specially during ram-
up and ramp-down