Unknown Speaker 0:00:07.1: 

To now introduce Alina Davydova from Danfoss to you. Alina is heading up senior manager in the global SIOP team of Danfoss and will tell us about their Anaplan journey.  

Alina Davydova 0:00:22.1:  

Hello everyone. Um, I normally do a lot of trainings and sessions online, so I need to ask, can you hear me? Can you see my screen? Okay. Thank you very much. I'm really honored to be here today, even though it was a very fast call, but I'm happy that I managed and I'm going to take you through our SIOP journey, which we are taking together. We're doing together with Anaplan we've been doing for quite some years. I'll show you some examples where we started and where we are heading. And together with that, I'll I also try to highlight how we monitor our success, how we monitor our development, and how the process and tools and system integration into S&OP process helped us and our leaders to make better decisions. So let me get started. Why me? Yes, I'm a senior manager at Danfoss in SIOP, and here we are calling it SIOP with the focus on inventory. So it's sales, inventory, operations planning, SIOP excellence and MDM. Me and my team have been responsible and have been driving the development, describing and deployment of S&OP or as we say, SIOP processes and tools, into our environment. Supporting also the user training, supporting the improvement, development and so on and so forth. So who we are. I come from Danfoss. We are a global international engineering company with more than 40,000 employees, and we are three big segments Danfoss Drives, Danfoss Power Solutions, and Danfoss Climate Solutions. I am responsible for the climate solutions.  

Alina Davydova 0:02:14.2: 

So a bit more in details. What are we and why we have this big demand for an integrated business planning solution, because we are big. We are not like, there's a factory. For your suppliers your customers, right. We can send a few emails and everybody is happy, no. So the area I am responsible, and my team sits within the three billion turnover last year and we are also around 11,000 people 600 are active Anaplan users, meaning in demand planning, inventory planning, operations planning. They are doing something. They open the tool, and they press the button. So they need to know how to do that. Of course, we also have hundreds of people who either give the input on the sales side, on the inventory side, or they're working with the output. When we deploy everything into our ERP systems. That means that, well, I would say one-and-a-half, 2000 people are in different ways communicating within the SIOP process and we have 35 factories. I'm not even talking distribution centers, and they're all over the world. So again, we are in the environment where we cannot just send a few emails, have a phone call and agree, okay, bring me five pieces and I will deliver you 20. We are far from that. At some point of our development, and I will be giving you maybe some anecdotes and stories in the way where we started, but at some point, Danfoss realized that we need to have a common SIOP S&OP process end-to-end, coming from demand planners, planning, inventory planning, operations planning and deployment. We need to have a proper tool to do that. 

Alina Davydova 0:04:03.3:  

A few more things how this demand came in place. So I showed you the numbers. We are very complex, and we have a lot of people who are involved in the process. How complex we are, 35 factories and we have around 60, 70 distribution centers all over the world and we are selling and reselling. You can sometimes see from the factory it goes to, let's say, five locations before it reaches the customer. So we need to enable ourselves to collect data from Australia, Japan, Europe and bring it to the factory that may be in China, maybe in Europe. That's why this importance of the network was, and it still is for me, one of the big, big advantages that Anaplan brings. I'll tell you a story. I joined Danfoss in 2008, and in around 2015/16 I was the SIOP manager or supply chain manager, whatever you call it at that time. I had quite a small supply chain, three plants but every month I had this challenge, this nightmare. I had to call every planner in my three plants and beg them for that Excel file with their capacity. Then I needed to connect to the regions and ask them what about the sales. How much you're going to sell, and it was always a bit of this game. Will they send it on time will they not and then I need to make the big presentation and show it to the bosses and make certain decisions. Then the next day after the presentation is made, something else pops up. So this was, well, I came for some stress, right. Therefore, it's not just me. That's just my experience, but the need to have this integrated tool where I can see in one place, in one screen what is happening on the demand side. What are those sales guy doing, what were the agreements?  

Alina Davydova 0:06:11.1: 

What is my capacity in this factory? In that factory? Can I see it together? Can I see it on a cold number level? Yes, I can, and I don't need to call 20 people. Of course I will talk to them, but we already have the platform to talk to, and we already have somewhere to start this conversation. Moving on, we are complex, and we have a lot of sales in between the different countries and continents, and also in between our own factories. That is also something that we needed to cover back then, and this is something that Anaplan helps us to cover, because if I'm changing my capacity in location that fits, then the components from another one. I need to make sure that these are connected. I need to make sure that I don't put too much in here and then I cannot deliver them. So that's where we are, and multi-level capacity planning. I think I encountered certain location where we have six, seven boom levels. Meaning that it's not just that I take ten parts and assemble into valve, but I'm also producing the subcomponents, subcomponents, subcomponents and then I need to buy those raw materials and I need to secure that these raw materials up to the single label screw nuts, whatnot, that it's planned correctly and I give the very good forecast towards my supplier of this bottom level and sometimes my lead times. Again, with all that, my lead times can be up to six months. So I need to be flexible. I need to make sure that my plan fits my business strategy, but I also need to secure this down on many, many, many levels.  

Alina Davydova 0:07:57.6: 

With all that said, we embarked on a journey and that's how it started. So back in 1617, the small number, yet the group of experts sat down and decided, okay, what tool will we use, how the architect will work and that was more of an IT project but by the year 18, this is where I joined as a qualified user for my product line. We started the roll in or roll out and we did it step-by-step. So you can see it took two to three years to go into the entire business. We're currently 25 product lines with all that sales and factors, which I mentioned and twenty three-and-a-half of them are using SIOP process and Anaplan. So we still have a small portion to go, but we're working on that. So that took quite some year. I will tell you a bit more about our deployment cycle and where to pay attention, and where we paid attention, and where maybe we had some difficulties, but starting from 2020. So around Corona time, we were on our maturity journey. So technically we introduced the process, but we also needed to understand how to integrate it with sales forecasting. How to talk to finance, who are still using different tools, how to also enable all those people who are using to use it with a purpose, with understanding and helping them to learn and discover all the opportunities and possibilities that the process and the system does. So we were there and then we had a journey of Anaplan 2.0. That's how we call it. That's actually when we moved from models into the apps with all the beautiful development that happened on the way, it was another round of change management, another learning, but if previously it took us three years to go for a majority of the business, then 2.0, we I would say six months.  

Alina Davydova 0:10:06.8: 

That was the time from where we started onboarding the qualified user until the time when we actually said, okay, we switch this, button and we're live. So that's our journey. We are here now. We're using actively demand planning, inventory planning, ops planning and we deploy from Anaplan into [?SAP 0:10:31.4]. That is our ERP system, and we have a lot of new ideas what we can do, but I might talk about it a bit later. Now for the deployment journey. That's quite a standard deployment process cycle, whatever you call it. Any time when you start something new, you want it to be a success, and you need to prepare documentation and describe that process or new tool or whatever you want to introduce. Then you need to prepare people organization for that. You cannot deploy S&OP process even with the most fantastic tools. If you don't have people, if nobody is ready for that, so you prepare your organization, then you do the key performance indicators. You say, okay, if I'm doing that this year, the next year, this, this, this thing should be better. Otherwise how can I prove that this worked? Then you introduce, you might do a pilot, you introduce full scope and then it's continuous improvements and learnings and trainings and packages. Of course you always want to do better step-by-step. So I only have 15 minutes left, so I'm not going to talk about all of them. It's only two where I'm going to pay the attention because one of course is process and tool. The enablers of this better business decisions which I made on the way. Another is performance indicators because from the very start I told you that I'll show you a bit how we measure our success on our journey.  

Alina Davydova 0:12:06.9: 

So let's get started. Processes and tools. This is a classical monthly S&OP cycle. We we're doing it every month. We are doing it in all the regions, locations, product lines. We start with the demand planning, where the best technological knowledge of our demand planners and Anaplan come together with the insights into the business from the sales drivers and this is how we prepare consensus demand plan that goes into the supply planning and here we are hiding inventory and operations. So we plan our safety stocks. We plan our inventories 24 months in the future, and we do the same with the operations. We compare our demand, which comes from all over the world, to our capacity and all the locations and say, okay, yes, we can deliver or no, we cannot deliver, so let's figure something out to make it better. Then of course, we do the sign off. We do it on two levels factory level, exactly to acknowledge that everything is fine or potentially acknowledge the gap. Then we do it on the product line or division of business unit level saying that, yes, we compare demand with supply. We checked everything, and this is the plan. These are the numbers on the code level that we would like to put in SAP in order to do detailed capacity planning, shop floor planning and raw material purchase. So during this process, we need to make several important decisions. Let's have a look at the first one. Of course, the first one comes when we complete the discussion on the demand planning, and now we need to sign off this consensus demand plan. Of course, consensus is a myth. Somebody will always be less happy, somebody more happy but this is the most realistic scenario that we agreed to deliver towards our sales all over the world.  

Alina Davydova 0:14:14.3:  

So how using Anaplan enables us to make better decisions enables the business leaders to make business decisions during this particular meeting session, decision-making process. So first of all, with having everything in one place, we have a great visibility for all the regions, even if I'm talking about one product line, or even one product, or even one product group, whatever I want, I can see whatever is coming from all over. I can see, okay, what do I have in Asia Pacific? What do I have in Europe, what do I have in China and so on, making sure that nothing is lost in between and also being able to discuss it. What if something goes, I don't know, too high or too low? These are the outliers that I want to discuss. After doing that, that helps me to make better decisions. We are working very steadily on valuation. Of course, the planning is done is in pieces, but Anaplan gives us the platform to agree on the common valuation for all the businesses, which means that we can transform, convert pieces into money and again, speak the same language with the business. Of course, for me, coming from planning 1000 pieces is good enough but for sales to make this conclusion, they need to know how much in money it is. Of course, granularity and this will be not only for demand planning, but on all the levels. I can see the entire region. I can go with country, I can look in the group, I can look at the code number and I don't need to call 20 people asking them, okay, what is the sales in France or okay, what is my capacity in the factory in India, and so on and so forth. So I can be very fast with doing my checks and making these decisions. That is for demand but now I've, I've discussed that I signed off the consensus and I'm moving on to supply. What am I doing here? I'm doing inventory planning and operations planning. 

Alina Davydova 0:16:29.8:  

So how Anaplan helps me here first thing, which I already mentioned, that's the network, that's really golden because I'm able to see in my factory regardless where I sit. All the network demand coming from all over the world, and also my other factories, and that very much related to the story which I started with, that I don't need to connect to all my customers being internal or external. I see it all in one screen and I can see it. It also depends on material master, and data is the key that I have the correct flows, the correct lead times correct everything and that's also what my team is responsible for, to make sure that we know what needs to be maintained and with high quality. If I have all this, everything is connected by Anaplan, edge and engine and at the end in one screen I see okay, this is my external demand sales. This is what comes from my, from another factory from another region and this is my own production because I also need to spend capacity to produce certain semi-finished and so on, and I can slice and dice it in different dimensions. Sometimes I would like to see in pieces because the production line allows that. Sometimes I would like to see it in work center capacity in hours, because this is how I manage that particular line. So all this is available, and I can decide how I want to look at it, to make better decisions, to make the conclusion saying that yes, I can do it or yes, I can do it, but with certain things that I need to complete. These certain things are stock build up and stock build down 

Alina Davydova 0:18:13.8  

I don't know if a lot of you come from industry and production, I do. I've been working there all life and again, back in 2012, we were doing stock double down directly in SAP. I had several excels that I needed to combine, calculating there how much I would need to prebuild on every code number so that I would deploy two different versions of the forecast in SAP to secure that. One is the sales forecast, and another does the build-up, I did. I must admit, I felt like a hacker, like an IT person, because I needed to do all that using three different programs, and I did feel unique, but that's not what… It took so much time and it you could really do it twice per year, and then you don't touch it because you're afraid if you miss one comma, it's all going to be just down to drains. It will collapse. It will not work. So now it's very different. We have this functionality of stock build up, build down, which almost every site planner slash production planner can do nicely in Anaplan. Then it gets transferred into SAP. It goes through necessary rounds of approval, but you need to have a PhD in IT and science to make sure that you prepare the stock building for this area in the problematic time of the year. That is a huge benefit that we're widely using. Then a few more things that I wanted to mention is the inventory planning, that we do it long, long in the future so you can schedule your, you can prepare your safety stocks. Not right now, go and change it and say, oh, it's high season, let me put another thousand pieces. No, basically you can plan it already for August next year, making sure that in a certain distribution center you will have it higher and prepare for that, because it will go back through the network and your factory will see this increase.  

Alina Davydova 0:20:24.2: 

Same with the decrease. You can plan it in advance and lower down your capacity not to overstock and not to send people on vacation. You can plan it and that's exactly the beauty of it. Let me move on because I can talk about it forever, but let me be mindful of the time, the final decision making. So what we've done, we've decided on our consensus plan. We decided on what we do in the factory, and now we are deciding, is this plan overall good or bad? Can we send it to SAP, and we do it every month. So what are the beauties here and what things help. How Anaplan here helps us to make the decision. This is of course, this demand versus supply visibility. You want to do it on a code level, well, you will not do it in the management meeting, but you can check your product line. You can check particular groups. You can see overall in the division. Well, you can go and see on the company if you would like to, but here it helps to see the gaps. If they still remained before until that time and move forward. What I also really, really appreciate is this button that when you make the decision. So before we deploy any number to SAP, somebody needs to sign off and that's important. That also shows the accountability of the leadership team on whatever decisions are made.  

Alina Davydova 0:21:57.6: 

Now, I will speed up and another thing that Anaplan helps us with is to manage KPIs and I will go directly into them. So we all know what are the KPIs and why they need it and we're doing it in two different ways. One is yearly and that's maturity assessment. I'll show you how it looks. So this is a kind of a table of questions very, very, related to our business and our tools that we analyze ourselves and set the target for the next year, and then the next year, and then the next year. Another one is quite the standard KPI performance indicators, which we have specifically defined for S&OP process and some of them we even use Anaplan to monitor. So let's get there, maturity assessment. It's a homemade tool, okay this is Excel I give up, but this Excel will describe for us exactly what are the processes people, capabilities and tools and how to use them in a very detailed level. I can focus and decide myself, what is that I want to bring up and develop this year, right? For instance, this is a very old example, but still my demand planning and supply planning are okay. They're above 60. So I want to focus on my executive S&OP. I want to improve the tools. I want to train the people. I want to get the executive into the call. Maybe this will be my goal, but anyways, I do it. Once per year I focus on certain things and then I monitor it regularly by looking at my performance indicators. So we have three areas, demand planning, inventory planning and operations and we have five performance indicators which we are looking at. The first two forecast takers and buyers. They belong to demand planning, and we can monitor them in Anaplan. So by agreeing on the formula with your builders, with Anaplan experts, you can make whatever you want and that is how we can monitor it there but the PLs themselves are not unique. Most people are using them. Most companies are using them.  

Alina Davydova 0:24:12.9: 

Then we have for the inventory. Days of inventory is also quite common, but we have developed something else called Anaplan utilization because we want our people, our organization, to understand where they stand and urge them to use Anaplan more. So that one we also monitor it inside of the tool. The green line, the green sector. It means month-to-month. How much of the Anaplan calculated inventory we actually approve, safety stocks, and how much goes into the system, into ERP, into SAP. You can see that from October '23 until now, we are growing and in the future it's even more right. The less is manual, some customer agreements and so on and so forth but the majority, in this example, we are doing by Anaplan calculating and proposing and planners and inventory managers approving those proposals many months in the future. We are doing 6 to 12, but the system allows us to do 24 when we are ready. That was on the performance indicators. So back to deployment cycle process deployment. I only managed to talk about two, but I hope I showed you some of the benefits and some of the ideas, how we do that right and how else it can be done. Every time when we change something that is change management, and every time when we are onboarding into a new journey, we need to keep those things in mind and consider that it's not always easy. I'm quite sure that when all the things are tick mark and the homework is done, then any journey will be a success. Thinking about the future, I'm really looking forward to PlanIQ journey with Anaplan and also scenario planning. So hoping is going to be our next topic in the following years. Thank you very much and if you have any questions, I'm more than happy to answer them.