Gaylord Texan Resort & Convention Center December 11-12, 2008

1. APICS / iBF Best of the Best S&OP Conference Executive S&OP How to Implement Successfully Gaylord Texan Resort & Convention Center December 11-12, 2008 Bob Stahl R.A. Stahl Company www.tfwallace.com Rick Hall Director of Operations UPG of Thomas & Betts Rick.Hall@tnb.com

2. Detailed Forecasting & Master Scheduling Super MS 24 Months Time S&OP / Rough Cut Plant Scheduling/Pull PTF MS Mix Volume The Evolution . . . Most Detail Aggregate Only Exac Config. . .Precise Mat’l. . .# People. . .Capital Equip . . .Factory Space • Lost in the woods- Detail • Engage Top Management? • Added Little Valueoutside the Planning Time Fence

3. S&OP Aggregate Only Quadrant An Imperative . . . PTF Suicide Quadrant Detail Horizon

4. Four Fundamentals Volume Demand Supply MIX

5. The Real Issue . . . Understanding Executive S&OP is simple. The hard part is . . .Organizational Behavioral Change Changing the way everyone does their jobs. Keys:- Full cross functional buy-in - Counter-experiential/intuitive - Comfort vs Change - Path of low risk

6. Successful Implementation . . . A- People B- Data C- Software

7. C - Software . . . • Data “warehouse” • ERP Operating System, Forecasting Software, etc. (transaction level data) • Data Cubes . . . • Excel (or equivalent) • Organizer • Presenter (tables & graphs) • More complex software – later/maybe

8. Rick Hall on software . . . • Change forecasting from detailed to families • Extract data from BPCS; organize in Excel • Develop appropriate MIX assumptions • “Control Tools” to build confidence in these assumptions (Excel based) • Be willing to put “the gator” on the table • No financial investment for software. This is not a software implementation; it is a knowledge application implementation!

9. B - Data . . . • Getting out of “Suicide Quadrant” • Forecasting in Families • Simplifying Data Assumptions • for Rough Cut Resource Planning • for financial conversion (units to $$$) • Single process - • tied together • one source for data • one agreed upon output

10. Rick Hall on data . . . Getting MORE with LESS • MORE clear picture of the business conditionLESS crunching of massive amounts of ultimately useless data • MORE understanding of where we want the business to beLESS confusion about where we are and where we are going • MORE participation and agreement in how we will get the business thereLESS conflict surrounding business initiatives • MORE accountability for the resultsLESS waste of human and financial resources

11. Rick Hall -- One Key to success . . . SimplifyingAssumptions

12. Assumption Sensitivity Validating Assumptions

13. Supply Assumptions . . .

14. Financial Assumptions . . .

15. Graphical Report

16. Simplifying Assumptionsallow Homac to . . . • Get out of the suicide quadrant • Keep noise level MIX issues from clouding VOLUME space picture • Maintain confidence in the process because the assumptions are monitored for validity • Build believable future state projections

17. Done Properly . . . Simpler (Not Easier) Better

18. A - People . . . • Top Management “centric” • The Leader of the business (CEO, President, GM, MD, etc.) must not only provide • Support • Funding • Commitment • Leadership • They must also be “hands-on” each and every month(Top Management must not only support it, they must be willing, ready, & able to do it!) • It’s not doing what you do better, it’s doing something different to be better! • Counter-experiencial & Counter-intuitive equals Discomfort & Risk

19. Engaging Top Management • In Change, there is no Comfort (In Comfort, there is no Change) Those who succeed withExecutive S&OPare willing the endure the discomfort that is required! Risk

20. Three Levels of Commitment . . . • Uninformed (before Go/No-go #1) Boss: “Okay, let’s do an Executive Briefing.” • Semi-informed (after Briefing: Go/No-go #1) Boss: “Okay, let’s do a Live Pilot” • Fully informed (after Pilot: Go/No-go #2) Boss: “Okay, let’s go to full cutover.” Low Risk

21. Homac Getting started . . . • President was convinced this was worth looking at by Demand, Supply, and Finance executives. • The Executive Briefing supplied all the necessary facts. The fact that it was a people based implementation was a strong selling point. After all, our people are our strength! • After some Co-Chair possibilities a staff level chair person was chosen (support from the top) for Design Team Leader

22. Homac Design Team Selections. . . • Chose the best people disregarding perceived workload constraints • To a person, the team members were enthusiastic to take on the task of developing and implementing this new tool • Initial progress was slow but progressed nicely as hurdles were overcome • Live pilot demo was very convincing with all design team members sharing in the presentation process • Implementation went forward on time and fully supported

23. Homac’s added plus . . . • ES&OP output provided clear supportable data for marketing our company • ES&OP process at our company is being modeled for all of the Utility Products Group within Thomas & Betts • ES&OP process is being used in tough market conditions to drive business performance • We are looking for new simplifying assumptions to help us broaden the proactive benefits of our ES&OP process (space requirements)

24. Phase III Financial Integration Phase II Expansion Phase I Preparation Implementation Path Executive Briefing Go/No-Go #1 Live Pilot Demonstration Go/No-Go #2 Kickoff Session Business Improvement Low Risk Low Cost High Impact 1 2 3 4 5 6 7 8 9 Months

25. Implementation Alternatives “Build it and they will come”Design it first, get the mechanics working, and then attempt to sell it to top management. =Low probability for success “Hold the high ground”Involve top management at the very outset of the implementation, and throughout. =High probability for success

26. Success Requires Design Team’s Job: • Defined set of practices (What, How, & Who) • Accurate, timely, & believed data • Valid, simplifying assumptions(Demand/Supply/Financial)(Getting out of ‘Suicide Quadrant’) Leadership’s Job: • High discipline clear accountability (process & results) • Constant improvement • Changed performance measures • Culture/Behavior change(Gator on table)

27. Thanks for Listening RStahlSr@aol.com 508-226-0477 www.tfwallace.com