Sales and Operations Planning Sustaining Performance after Implementation

1. Sales and Operations PlanningSustaining Performance after Implementation Brad McCollum Sr. Manager, Materials Planning and Logistics Ned Finch SVP, Global Supply Chain & Lifoam Operations

2. Agenda • Introductions • A little about Jarden and Jarden Home Brands • The History of Our S&OP • Symptoms of a Degrading Process • Keys to Maintaining Quality • Questions

4. Jarden: The brands of everyday life

5. Jarden: The brands of everyday life

6. Jarden: The brands of everyday life

7. Functional Structure - 4 Business Units Casual Entertaining Fresh Preserving Firelogs Recreational Products 2009 2011 2010

8. OUR Success

9. Demand: Market Facing Families…

10. 2003-2007: Family Level Demand Max Mfg Capacity Normal Mfg Capacity

11. Probably Not Just another year… 2008 2nd Lowest JUN in 6 Yrs

12. The Results…

13. Significant Increase in Sales 2009 ES&OP Kick-Off

14. Reduced Cancellations due to Product Availability Before S&OP After S&OP ~ 50% Reduction with Significantly Higher Sales

15. Significant Cultural Benefits • Alignment of Human Energy • Elimination of the silos • Cross Functional Education • Dials are Connected • Tactical Execution of Strategic Plans • Risks Decisions are Made at Right Levels • Inclusive Business Management • S&OP Team Owned the Sales Forecast • S&OP Team Owned the Production Plan • S&OP Team Owned the Process and Deliverables to the Exec Team • Conflict Resolution • S&OP Requires Conflict, but also Provides a Forum and Process to Management it

16. The Challenge… Sustaining that Performance over time…

17. Where problems occurred… Exec S&OP Meeting Integration Supply Recommendations Demand Alignment Month End Data Gathering

18. Cracks in our Foundation • Data Conversion Issues • New Items improperly equalized • Items Missed/Not Maintained • Late Deliverables • Sliding Dates • Expanding Calendars (“I just need more time”) • Changes Occur without Confirmation • Tool Formats Change • Sources Change • Horizon Change • Quality Issues Creep into Process • Loss of Confidence in Supporting Data

19. The Solution • Continuous Quality Assurance • Deliverables should be checked every cycle prior to their entry into the process • Track Changes Cycle over Cycle • Corrective Actions have to be Immediate and with Priority • Remember that this Data supports business critical decisions • Drive Ways to Make this Process Bullet Proof • Eliminate sources of error • Maintain a Path for Confirming Process Change • Better and more efficient ways are expected as part of the process, but still need to be confirmed by the team • Keep up with Adjacent Changes • S&OP support needs to be part of adjacent systems design/change considerations

20. Where the problems occurred… Exec S&OP Meeting Integration Supply Response Demand Alignment Month End Data Alignment

21. The Fundamentals of Demand Alignment Demand Alignment Customer Market History Reconciliation of Opposing Views

22. Shortening Horizon 24 Months Time MIX VOLUME Volume/Marketing Call Consensus Demand Reconciliation Planning Time Fence Sales Call

23. Loss of Top Down Perspective THEORIES

24. Bias and Error BIAS

25. Other Symptoms • Demand Alignment Meetings become shorter and shorter • The Reconciliation of Opposing Perspectives requires debate • Demand Alignment Meetings Attendance Suffers • Key players begin to decline/no show • BIAS Becomes Apparent • Prolonged Bias Results and becomes difficult to address • Supply begins taking bias into consideration • Eventually Real Alignment isn’t really happening • Error Increases without the value of the discussions required to gain alignment • The value and importance of Alignment erodes • Demand Team Members disconnect from the process and if deliverable

26. The Solution • Never Loose the Three Legs • Retain Rigor around bottom up forecast within the Planning Time Fence • Top down is more art than science – It is the quantification of theories that are relevant to the category • Don’t let up on basis Meeting Management • Attendance • QA of Deliverables • Track and Monitor Bias and Error • Improvement should be the basis for comparison • Set and Pursue Continuous Improvement Goals

27. Exec S&OP Meeting Integration Supply Response Demand Alignment Month End Data Alignment

28. Reasonable Assumptions Change Product Groupings: Design Objectives: Market Facing Product Families Highest level possible based on agreed upon market drivers Reasonable Assumptions Proven Assumptions that allow demand to be applied to supply groupings Supply Grouping Grouped based on how capacities are constrained

29. Monitors Get Lost Run Charts for each Split

30. Capacities and Productivity Change Capacity Grouping WC1 WC2 WC3 WC4 WC4 WC5 WCN Rough-Cut Capacity Individual Capacities - Scheduled

31. The Solution • Rigor Around Supporting Monitors • Make Run Charts part of the regular Meeting (i.e. Assumption Models) • Pursue Ways to Bullet Proof and Automate Monitors • Educate New Players on the Key Behind the Scenes Controls • As your models Mature, these Monitors/Controls become more complicated and difficult to hand-off/transfer to other resources • Aggressively Pursue Outliers/Bias • These assumptions are fundamental to your results • Monitor Adjacent Projects Impacts to S&OP Assumptions • Acquisitions • Plant/Capacity Modifications and Improvements

32. The Results Exec S&OP Meeting Integration Supply Response Demand Alignment Month End Data Alignment

33. Upstream Issues Create… • Last Minute Iterations before Integration and Executive Meetings • Last Minute Errors Found • Financial Integration show something totally off • Integration Meeting Content gives way to Reconciliation and Error checking instead of Substantive Discussion • Integration Meeting Attendance Dwindles • Same people you had in Supply Meetings • People Unwilling/Unable to Defend Perspective • Inconsistent perspectives exist • Backroom Discussions/Decisions • Ultimately, ES&OP Meeting Attendance Dwindles • Benefits begin to un-ravel

34. Summary • Be vigilant with 1st Pass Quality with deliverables • Cracks in the Foundation damage the rest of the house • Don’t let the details fall to the way side… • RUN CHARTS to understand when change is occurring • Continuous Continuous Improvement • It really does take constant pressure • Survey Regularly • Flag for degrading processes • Everyone is responsible for pointing out the need for corrective actions • Watch and Track Attendance • When attendance dwindles...something is wrong • Don’t Expect New Team Members to Just “Get it” • Onboard S&OP Participants and New Executive Team Members to the Process is CRITICAL

35. S&OP is Never Ending Continuous Improvement

36. Questions?