Alina Dayvdova 0:00:06.2: 

Are we ready? Good afternoon. We are really excited, Magnus and myself, to be here on this stage and share the development in our S&OP journey together with Anaplan. But before we jump into the actual subject, I would like to explain who we are and why we are here - what brought us onto this stage. We're Danfoss, a leading technological partner in the industry. Our headquarters are in Denmark; we're around 40,000 people. We have around 100 production facilities all over the world in all the key continents. We are three segments, and I would like to give a bit more information about Danfoss's climate solution, where I belong, where I represent. The important thing that I would like to bring to your attention is that we are 35 factories, and even twice as more distributional centers. We have managed to create a distributional network where the factories delivering to [?DCs 0:00:15.3]. DCs are also selling between themselves in their … and the factories are also supplying each other with [?semi-finished 0:01:27.9] raw materials based on the needs. We are very complex and are also having a lot of people who are managing distribution centers, factories. When we are looking at that complexity, the picture that represents the users - the connections between the different parties - it's very, very clear that we were, at some point of need, in a big demand for a common planning approach for S&OP process that would enable the changes in any part of this network to be visible and to impact all the time within the proper structure in other locations.  

 

Alina Dayvdova 0:02:16.8: 

Because the worst thing that could happen is that, as a planner, I prepare my plans, I approve them, I do the checks; and, tomorrow, everything changes, because someone takes something. We have come, at some point, to understanding that we need a common playing approach with the robust tool that can help us do that. This is how Danfoss S&OP transformation started, from many parts into a common approach. In 2016, the journey began. By 2018, we were doing pilots, together with Anaplan. The real-life introduction in certain locations. Then there was the maturity - more and more product lines, more and more factories and DCs join, onboard. We had the maturity joining yearly assessment. Last year, we have introduced Anaplan 2.0 with better interface, better dashboard, more user-friendly. Now, we are 600 people actively using Anaplan as S&OP planning. Of course, more people, either giving information, giving more data and getting the impact on the day-to-day planning. This is here we are, and to give you the landscape, we are using Anaplan for S&OP - it's not finance, like previous speakers; but this is what we call SIOP: sales inventory and operations planning. We do it with I because inventory data matters, especially at the end of the year.  

 

Alina Dayvdova 0:04:00.6: 

What do we do? Let me explain before we go into the actual topic. We take, on a weekly basis, material matter and transactional data from our [?AOP 0:04:13.7] system… Then we do demand planning inventory planning and ops inside of Anaplan: we have lots of models, lots of logics, lots of formulas and dependencies inside of Anaplan. Then, at the end of the inventory cycle, we deploy safety stop to AOP back to S&OP. As the conclusion of our ops, with checks of capacity, with the balancingware needed, we are also deploying the forecast back to S&OP. While doing that - we can do it on different levels; we can deploy raw materials, finished goods, components - and you'll see, at the factory, that that's purely our decision. But the important thing is that everything is joined together, and every time we make the decision to increase or decrease demand plan, to increase safety stocks somewhere in the future to make the balance of the plan. All the participants of this process are aware of that, via Anaplan, and then with the actual deployment to AOP for purchasing and day-to-day planning.  

 

Alina Dayvdova 0:05:28.4: 

So that's the very overall picture, but of course, this consists of lots of elements; lots of important elements that need to work in synch to be integrated, to be connected. One of those elements that we're going to talk today is the footprint change. Magnus, help me out. You've been doing the planning in Anaplan S&OP for many years. We do have two years planning horizon; we know our material masters. We do have the monthly cycle and the people who know what to do at which point of the month. What about the changes which happen unexpectedly? In the modern world, we might be having some issue with the [?sales canal 0:06:14.3]. We might be having the theories where we have to quickly change our distribution and reveal our supply change design; and, of course, building a new factory and moving into a new modern environment. Is there anything that we can do to support those changes and secure the best route to the customer with the lowest inventory possible? 

 

Magnus Hoffritz 0:06:34.6: 

I might have something that can help you out, Alina. Let me just load something up for you. Here's a picture of your factory. All the yellow columns are representing the demand in weekly pockets. What would you like to do? 

 

Alina Dayvdova 0:06:58.9: 

Well, let's say I have the new factory there with more modern technology. What about we will move the demand in week 32? 

 

Magnus Hoffritz 0:07:12.0: 

Here, I'll try to look for week 32. It's about here, in the middle. How much of the demand would you like? All of it? 

 

Alina Dayvdova 0:07:22.8: 

Let's do it all. 

 

Magnus Hoffritz 0:07:23.6: 

All of it, okay. Then let's just do a hundred per cent. Yes, there you go. That's it. Anything else? 

 

Alina Dayvdova 0:07:35.1: 

So now, potentially, all the forecasts from week 32 will be allocated to the new factory. But, you know, it's very new, and, normally, I cannot start production the first day. I need to start it gradually, making sure that my operators are trained, the equipment is checked. Can we do it step by step? 

 

Magnus Hoffritz 0:07:56.6: 

Aha, okay. You want to wrap it up. Yes, let's try that. We will have an overlapping: so it's got to ramp up and ramp down. I'll stop the production a little bit later in the old factory, and start a little bit earlier in the new one. Something like this? 

 

Alina Dayvdova 0:08:10.8: 

Yes, like that. 

 

Magnus Hoffritz 0:08:16.7: 

Okay, great. 

 

Alina Dayvdova 0:08:17.9: 

Now it's better, but there are cases where I don't want to put all eggs in one basket. Since those factories are on different continents, I would like to keep half of my production in the old one and move only 50 per cent. 

 

Magnus Hoffritz 0:08:36.4: 

No problem. Let's do 50 per cent. So instead of the 100, let's do 50. I just change the 100 and it should be something like this. 

 

Alina Dayvdova 0:08:49.9: 

Yes. So we're capable of making these changes very fast and immediately deploying a result. 

 

Magnus Hoffritz 0:08:55.4: 

Absolutely. 

 

Alina Dayvdova 0:08:58.5: 

What are the changes temporary? What if I am making a renovation in my original factory and I just need to move it for a couple of months? 

 

Magnus Hoffritz 0:09:06.3: 

Like a temporary allocation, or something like that? No problem, let's do that. Towards the end of the year around - let's say week 48 - we put all demand back to the old factory. 

 

Alina Dayvdova 0:09:20.8: 

When I deploy to AOP, I will have it only for a few months in the new, and then it will come back? 

 

Magnus Hoffritz 0:09:27.3: 

All your future requirements will be aligned to these practices in both factories. 

 

Alina Dayvdova 0:09:34.9: 

Great, thank you, Magnus. I have one more question. Very often, when I'm moving certain production from one place to another, I'm using the same equipment. So I need to stop, cut off, in the old factory; pack it, deliver - installing the new one - so there will be times where I cannot produce; but I still want to sell. Is there a possibility to make the pre-build in the original factory, which I keep selling, while this equipment is being moved…? 

 

Magnus Hoffritz 0:10:05.2: 

Slow down. Let's start - you're going to stop production a bit earlier; let's do this first. Now we're going to stop the production in our old factory - we're going to do that on the 26th. Then we're going to start the new one week 32. That's about five weeks here, you will not have the ability to supply - and you want to do what? 

 

Alina Dayvdova 0:10:30.7: 

I want to do the stock build-up, to [unclear words 0:10:35.2] the inventory that I can be selling it. 

 

Magnus Hoffritz 0:10:38.3: 

You want to take that demand of those five weeks and move it…? Wait, let me get my phone. Just make sure I run one process… There you go. 

 

Alina Dayvdova 0:10:54.8: 

What do we see? 

 

Magnus Hoffritz 0:10:59.1: 

Well, basically, now, we took the math; took the forecast of the old factory, and we're going to pre-build those products in five area weeks, so you have the inventory. When you dismantle the production lines and move the equipment, you'll have a buffer stop to cover your customer deliveries. 

 

Alina Dayvdova 0:11:15.4: 

All right. We took the grey one, put it on top, produce, and keep selling there, while I'm moving the equipment. 

 

Magnus Hoffritz 0:11:27.9: 

That's it. 

 

Alina Dayvdova 0:00:06.2: 

That works for me, I think. 

 

Magnus Hoffritz 0:11:28.9: 

This was a bit of a role play but also gave an illustration of the conversation that me and Alina had six months ago. You've got an idea of what the tool looks like, in simple words. I would also like to explain a bit more about how that process works in real life, so you get more about how we actually did this. Basically, I'm going to go through these four main steps; how we went through a design process, built it, tested it and released this small functionality - this small honeycomb - in our big solution. The first step was, really, to go out and gather the requirements. To do this, I interviewed seven different S&OP managers and supply chain heads to try to get some real use cases - so loading all the used cases down, requirement gatherings, and trying to understand the business process. Once I did that, then I tried to document that in a standard document - so created an old-fashioned standard document explaining the business process, its practices, how to create a timeline around footprint changes, things like this. Once I had that, then I could think about what a tool should look like - so the system design. Basically, there were two options that I could think of: one was, basically, manipulating the connections in the supply chain network, saying, 'Okay, the demand is going to flow different.' 

 

Magnus Hoffritz 0:13:05.6: 

The alternative was to just direct the demand to the place where I wanted it to go. As you can see, or as you can read, there were some pros and cons: one, it required a lot of input from users; I had a high complexity for the user to set it up to the future network. Whereas the other one was more high complexity on the backend - that's why we had to do more upfront calculations - but on the flipside, it would be easier for the end user to interact with. I opted for option B, simply because I wanted a fair adaptation. I wanted users to be able to intuitively, immediately engage with the solution, so this was the system design that we went with. Then we've got the backend. There's a slide here with some kind of model map and architecture drawing, just to get an idea about how this design, how this functionality tied in to the overall design. This was the backend. Then, on the front-end side, we made one dedicated page for this - so very simple words. The user would create a project; they can input settings for that project - similar to what we were doing in our demo - a little bit more than that; there's a little bit more functionality to it than that - but input settings for the project, and then they would assign products - the products that they want to actually move. In one page they get to know all this, and it's immediately live. Once we had built the front-end, we did the UAT - quite standard; you have a standard test script that we went through with qualified users - had about 15 qualified users and a test channel. Alina, you're here? 

 

Alina Dayvdova 0:15:00.6: 

Yes. 

 

Magnus Hoffritz 0:15:00.7: 

It works for me, thank you - that's what you're saying? So just having a common place to write - communicate about all these questions, and install videos of demos and things like that. Once the UAT was done, then we can go live; we can release it; synchronize it through our productive system; announce in our internal community - to our user community - about this new functionality and update training material. This is how it was, for this small build. How has it been for you? What has been the feedback from the users? 

 

Alina Dayvdova 0:15:35.0: 

Our stage was released and delivered. We had a more detailed session with our S&OP managers. We then started using that; and we now have multiple projects. We are capable of moving the demand, even if material matter is not yet updated. Even if we change from one week to another on the quantity or the codes - we're already doing that - we're capable of realizing it before it even happens. 

 

Magnus Hoffritz 0:16:08.6: 

This was our small demo in our small development. We'd be happy to take any questions from you. 

 

[Applause] 

 

Audience 0:16:25.9: 

Just a question. Are you the only one in that team doing it? 

 

Magnus Hoffritz 0:16:27.8: 

No. As you saw, this was one honeycomb of a very big solution. We have around four and a half model builders and two architects. These are very, very big models. A few facts on this; we're dealing with about one million SKUs and about 500 Gigabytes - so this is quite a big; and this is one small functionality - but one exciting functionality that actually has an impact and very relevant, in these times; that is why we wanted to show you this. 

 

Alina Dayvdova 0:17:09.6: 

It's something that helps to replace multiple Excel and spreadsheets, and then you can do everything in one place; an inventory to focus deployments. 

 

Audience 0:17:25.5: 

Just a quick one, Magnus. Could you maybe talk a little bit about your decision-making process, when you first chose Anaplan - like why Anaplan versus other competition? 

 

Magnus Hoffritz 0:17:36.7: 

That's not what we were going to talk about today, [?Colin 0:17:42.4]; but if I go back to that - why we went on that journey, and why we chose Anaplan. There were different options. We were at the point of time where we wanted to replace 16 different S&OP systems into one. We were on a journey with S&OP, and therefore IDT was an obvious option, but there were other options that we looked at at the time. What we were looking for was something that we could customize to all the different types of businesses at Danfoss. There's a lot we are doing. In retail, we are selling B2B. There’s all these different businesses that sometimes we can plan per customer; sometimes per product, sometimes per region. We were looking for a tool that we could customize; that we could plan all these different ways. I think, at the end of the day, that's why we chose Anaplan - that we could build our own [unclear word 0:18:41.2]; customized for whatever part of the business, however they wanted to do the plan. No more? No more? Thank you very much 

 

[Applause]