Last revised: 12/12/97

Rohm and Haas Supply Chain Management Process

Class A Assessment Checklist
Version: January 1998
Assessment
The Class A checklist is used within Rohm and Haas to guide you in assessing whether the Supply Chain processes in your
business are at recognized Class A standards. The checklist is organized in 8 major sections. Within each section are
general statements in bold type that are high-level descriptions of Class A processes. Detailed descriptors follow each of the
general statements and supplement your understanding of Class A by listing some observable characteristics of the sub-
processes.
In the Class A assessment, a rating is developed for each of the general statements by reviewing the detailed statements.
Class A certification requires an average score of 3.5 or better for the 24 sub-headings contained in sections A through F.
Expected Class A performance levels are detailed in the Data Quality and the Performance Measurement sections. At least 3
months sustained performance at these levels are required prior to certification. Annual recertification following Class A
recognition is encouraged.
Resource Assistance
If you have questions about this checklist or need
assistance with Class A consultation and certification,
contact the Supply Chain Center (SCC) in Home Office.
Process templates are available from the SCC to help you
get started. The templates describe Class A processes in
sufficient detail to enable you to apply them directly to
your business.
ABCD Checklist
The majority of the Rohm and Haas checklist is taken
directly from the ABCD Checklist 3
rd
ed. by Oliver
Wight. Editorial changes were made to some of the
statements to improve the clarity and applicability to
Rohm and Haas; however the original intent remains
unchanged. Sections on Transportation and Warehouse
Planning, Internal Supply and Delivery Management were
added since these reflect important elements in our
Supply Chain.
The major changes in this revision vs. the one published
in May of 1997 are primarily in format and composition.
Additional detail is provided on the information that is
contained in LogsPlus, Mimi, and Prism and reflects our
continued learning of the processes. There is an
enhanced emphasis throughout the checklist on
performance measurements and accountability. A
change log located at the end of this document provides
more detail.
Revisions to this checklist will be made only with
concurrence of the Supply Chain Council, and are
expected no more frequently than semi-annually. A copy
of the current checklist is available on the Intranet at
http://web.ho.rohmhaas.com/supplychain.
MRP II Rating Definitions
Rating Definition
A All processes implemented,
business-wide
All metrics at Class A levels.
All functions involved
Substantial improvements in
business results
B All processes implemented
Some metrics at Class A - not all
Measurable improvements in
business results
C Some processes implemented
Few metrics at Class A, some not
implemented
Some improvements in business
results
D Few processes implemented, still
some parallel processes in place
Few measurements implemented
Software installed
< D Processes not implemented
Classes
Class A an average of 3.5 or higher
Class B an average of 2.5 - 3.5
Class C an average of 1.5 - 2.5
Class D an average below 1.5
Last revised: 12/12/97
Rohm and Haas Supply Chain Management Process
Class A Assessment Scorecard (Summary Level)
Business Unit: __________________________ Site: _________________________
A. General Management Processes
A1. Corporate Direction
A2. Management - Active Leadership
A3. Linkage to Strategic/Business Planning
A4. Linkage to Demand Creation Process
A5. Linkage to Development Process
A6. Employee Education and Involvement
A7. TQL Process - Continuous Improvement
B. Planning Processes
Sales & Operations Planning
B1. Sales & Operations Planning Process
Demand Management
B2. Forecasting and Demand Planning
B3. Network Design & Analysis
B4. Distribution Planning & Replenishment
B5. Turbo Replenishment Planning
Supply Management
B6. Master Production Scheduling
B7. Capacity Analysis
C. Materials & Services Supply Processes
C1. Planning of External Supply
C2. Planning of Internal Supply
C3. Transportation & Warehouse Planning
D. Order Management Processes
D1. Order Entry Processing
D2. Billing & Collecting
4321
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E. Production Processes
E1. Plant Scheduling
E2. MRP, Procurement and Paying
E3. Conversion
E4. Production and Quality Reporting
F. Delivery Processes
F1. Shipping/Delivery Management
G. Data Quality
G1. Single Set of Numbers
G2. Inventory Record Accuracy
G3. Bill of Material Accuracy
G4. Capacity Planning Parameter Accuracy
G5. Product Change Control Process
H. Performance Measurements
H1. Customer Service
A) External Customer - On Time Delivery
B) Distribution - On Time Delivery
C) Internal Auto Replenishment-On Time Delivery
H2. Sales Forecast Accuracy - Family Level
H3. Sales Forecast Accuracy - SKU Level
H4. Performance to Production Plan (Family)
H5. Performance to Master Production Schedule (SKU)
H6. Supplier Delivery to Scheduled Receipt
H7. Cycle Time Performance
H8. Quality Performance
H9. Financial Performance
4321
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>95%
>98%
>95%
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>95%
>95%
>95%
Measured
Measured
98%-102%
>95%
>95%
Measured
Measured
Measured
Click any BOLD text below to go
directly to that section of the document.
Last revised: 12/12/97
Overall Score: ______ Class:________ Class A = 3.5 4.0 Class B = 2.5 3.5 Class C = 1.5 2.5 Class D <1.5
Last revised: 12/12/97 Page i
Rohm and Haas Supply Chain Management Process
Class A Assessment Scorecard - Detail Level
General Management Processes....................................................................................1
A1. Corporate Direction............................................................................................................................... 1
A2. Management - Active Leadership .......................................................................................................... 1
A3. Linkage to Strategic/Business Planning................................................................................................... 1
A4. Linkage to Demand Creation Process..................................................................................................... 2
A5. Linkage to Development Process ........................................................................................................... 3
A6. Employee Education and Involvement..................................................................................................... 3
A7. TQL Process for Continuous Improvement............................................................................................. 4
Sales and Operations Planning Process........................................................................5
B1. Sales and Operations Planning Process................................................................................................... 5
Demand Planning Process...............................................................................................8
B2. Forecasting and Demand Planning.......................................................................................................... 8
B3. Network Design & Analysis .................................................................................................................. 9
B4. Distribution Planning & Replenishing ...................................................................................................... 9
B5. Turbo Replenishment Planning ............................................................................................................. 10
Supply Management Process ........................................................................................11
B6. Master Production Scheduling.............................................................................................................. 11
B7. Capacity Analysis................................................................................................................................ 12
Materials and Services Planning Process...................................................................13
C1. Planning of External Supply.................................................................................................................. 13
C2. Planning of Internal Supply................................................................................................................... 15
C3. Transportation and Warehouse Planning ............................................................................................... 16
Order Management Process..........................................................................................17
D1. Order Entry / Processing..................................................................................................................... 17
D2. Billing and Collecting........................................................................................................................... 17
Production Processes....................................................................................................18
E1. Plant Scheduling.................................................................................................................................. 18
E2. MRP, Procurement and Paying ............................................................................................................ 18
E3. Conversion.......................................................................................................................................... 20
Delivery Processes.........................................................................................................22
F1. Shipping/Delivery Management............................................................................................................. 22
Data Quality......................................................................................................................23
G1. Single Set of Numbers......................................................................................................................... 23
G2. Inventory Record Accuracy................................................................................................................. 23
G3. Bill of Material Accuracy..................................................................................................................... 23
G4. Capacity Parameter Accuracy............................................................................................................. 24
G5. Product Change Control Process.......................................................................................................... 24
Last revised: 12/12/97 Page ii
Performance Measurements..........................................................................................25
H1. Customer Service - On Time Delivery.................................................................................................. 25
H2. Sales Forecast Accuracy (Family)........................................................................................................ 25
H3. Sales Forecast Accuracy (SKU).......................................................................................................... 25
H4. Production Performance to Plan (Family) ............................................................................................. 26
H5. Performance to Master Production Schedule ........................................................................................ 26
H6. Supplier Delivery Performance ............................................................................................................ 26
H7. Cycle Time Performance..................................................................................................................... 26
H8. Quality Performance........................................................................................................................... 26
H9. Financial Performance......................................................................................................................... 26
Appendix A Additional Metrics to be Considered....................................................27
Appendix B Class A Auditing Process .......................................................................29
Change Log......................................................................................................................37
Last revised: 12/12/97 Page 1
General Management Processes
A1. Corporate Direction
4 3 2 1 0
o o o o o
A) Corporate leadership sets appropriate strategy/direction (e.g., portfolio plan,
acrylic chain strategy/capacity, common metrics/systems) to enable optimal
business unit supply chain management.
1. Acrylic monomer/polymer supply/demand is managed in a corporate S&OP
process.
2. Corporate IT systems enable efficient global management of supply chains within
business and across businesses.
3. Corporate goals and metrics guide and support supply chain performance
improvement efforts in the businesses.
A2. Management - Active Leadership
4 3 2 1 0
o o o o o
A) Management at all levels of the business is committed to and actively involved
in the use of integrated planning and control and continuous improvement
processes, considers the effective use of these processes essential for growth
and profitability, and uses the common supply chain tools to run the business.
1. The Rohm and Haas Supply Chain Management Process improvement effort is
an integral part of "running the business."
2. The Rohm and Haas Supply Chain Management Process is viewed as
strategically important, a source of competitive advantage.
3. Commitment is demonstrated through consistent messages and decisions on
resource allocations (money and time).
4. Management demonstrates commitment through hands-on involvement.
A3. Linkage to Strategic/Business Planning
4 3 2 1 0
o o o o o
A) Strategic Planning - an effective strategic planning process is used in the
Business.
1. A strategic planning process is used by the business team. This process:
establishes the organizational purpose and mission,
provides direction for future generations of products and services,
develops a competitive strategy that provides clear direction,
integrates all functional areas of the business,
includes a manufacturing strategy statement,
includes assumptions about internal factors (controllable!) and external
factors (uncontrollable) that significantly affect the business,
occurs annually,
clearly identifies critical operating action plans with clear accountability.
2. The strategic plan:
covers the time required (typically three to five years) to implement major
changes in strategy and in the market,
is reconciled with the Business Plan and the Sales & Operations plans.
Last revised: 12/12/97 Page 2
B) Business Planning - the annual Business Plan process is owned by the business
team. It aligns with the strategic plan, and generates the annual financial
performance commitment for the Business Team.
1. The annual business plan:
provides specific direction regarding market share, financial performance,
marketing and manufacturing strategies, new product development,
customer service levels, external supply plans and desired inventory levels,
is based on the sales and operations plan, representing one set of numbers
linked directly to the detailed demand and production plans contained in
LogsPlus.
documents underlying assumptions,
is reviewed quarterly and updated to reflect significant business changes,
serves as the target for monthly reviews of financial performance for all
functions,
is supported with critical operating action plans (or AIPs by function).
A4. Linkage to Demand Creation Process
4 3 2 1 0
(See also Section B2.) o o o o o
A) A formal sales planning process is in place with the sales force responsible and
accountable for developing and executing the resulting sales plan (account
strategies, new product/market strategies, etc.). Sales plans and forecasts are
aligned; differences are reconciled.
B) The sales force understands the impact of sales planning and forecasting on the
businesss ability to satisfy its customers.
C) Actual sales are measured against sales forecasts. Measurements are broken
down into sales responsibility areas.
1. The assumptions underlying the sales plan and forecast are documented.
Changes to the forecast are supported with updated assumptions and updated
sales plans.
2. Sales areas are provided with useful feedback regarding their performance
compared to plan at least monthly. Sales plans are stated so that they are
meaningful to the sales force yet translate into the sales and operations planning
process.
3. The sales planning process does not impose an administrative burden on the
sales force.
4. The sales compensation system does not inject bias (e.g., sandbagging) into the
forecast.
5. The sales force is actively pursuing customer linking (e.g., Turbo).
Last revised: 12/12/97 Page 3
A5. Linkage to Development Process
4 3 2 1 0
o o o o o
1. All phases of new product development are integrated with the MRPII planning
and control system.
2. A stage-gate process specifies project reviews with manufacturing, marketing,
purchasing and quality assurance at each critical step of each new development
project. A detailed development schedule with authorization and funding
supports each new product development project. The schedule is reviewed at the
S&OP meeting, and a formal system is used to communicate changes.
3. The product development staff encourages commonality of formulation
ingredients in new products with those in existing products, generic product
descriptions are used rather than Trade Marked materials.
4. Once a new product has been authorized, it is included in the S&OP, demand
planning, and master scheduling process.
5. Capacity needed for new products is evaluated systematically (e.g., by rough-cut
capacity planning or capacity requirements planning).
A6. Employee Education and Involvement
4 3 2 1 0
o o o o o
A) The business is committed to provide education and training to all employees,
enabling the effective operation of the business and management of change.
1. Employees clearly understand the relationship of Supply Chain Management to
the success of the business and the corporation. Each employee understands
the inter-relatedness of the Rohm and Haas Supply Chain Management Process
and where they, as an individual contribute to the overall execution. Each
employee understands how their work relates to the service of an external
customer.
2. A continuing education and training program for R&H Supply Chain Management
Processes is available to enable employees to continually meet the performance
requirements of their job. Newly hired employees as well as employees
assuming different/new responsibilities have formal educational plans to ensure
competency. Cross-training is in place.
3. Management is committed to providing sufficient training resources and provides
adequate time for employee education and training. Education and training are
viewed as necessary and worthwhile.
4. Education is designed to be participative, and is targeted at refining and
improving an employees contribution to the business.
5. The education program communicates business objectives. All training,
including software training, is provided in the context of the business process.
Training is focused on behavioral changes rather than the mere transfer of facts.
6. A development review plan exists to improve employees skills and to expand
their capabilities within and outside their current role. Participation in relevant
professional organizations is encouraged and supported. APICS CPM (Certified
Purchasing Manager ) CPIM and CIRM certification are encouraged.
Last revised: 12/12/97 Page 4
B) An active employee involvement program exists to improve business
operations using teamwork and the knowledge and experience of all
employees.
1. People working in the Supply Chain and business processes are empowered to
take direct action, make decisions and initiate changes within clearly defined
boundaries.
2. A culture exists in which work practices that are counter-productive or non-value
added are continually identified and removed using effective team processes
involving all stakeholders of the process.
3. Continuous improvement teams (e.g. quality teams, barrier removal teams,
redesign teams) are a regular part of the work. Important lessons/learnings from
these teams are documented and integrated into future operations. Improvement
efforts are formally celebrated.
4. An annual Class A assessment (audit) is conducted by employees to evaluate
the specific strengths and weaknesses within their own supply chain processes.
This assessment is used to develop an improvement program to focus on the
areas that will provide the most benefit to the business.
A7. TQL Process for Continuous Improvement
4 3 2 1 0
o o o o o
A) Business-wide commitment to continuous improvement stimulates the
elimination of non-value-adding activities by surfacing, prioritizing, and
resolving problems.
B) Management uses performance measurements to drive continuous
improvement. The performance measurements provide cross-functional
alignment, support common objectives, and teamwork.
C) The TQL process ensures that the business contribution of each functional area
including suppliers, meets or exceeds customer requirements and minimizes
process and product variation.
1. MRP II principles are understood to be the backbone of operational processes,
with TQL as the mechanism for continuously improving the process performance.
2. The Business Team uses time as a key metric to drive continuous improvement.
Last revised: 12/12/97 Page 5
Sales and Operations Planning Process
B1. Sales and Operations Planning Process
4 3 2 1 0
Corporate tools: LogsPlus, CustServ o o o o o
A) Sales and Operations Planning (S&OP) is the management process that ensures
that the operating plan is realistic and supports the Business Plan. The process
is ongoing, run by the business unit leader and utilizes a formal monthly
meeting of all senior functional managers to ensure that necessary decisions
are made in a disciplined manner. The S&OP plan covers a time horizon of at
least 18 months (longer as required for decisions on capacity, development,
etc.)
1. S&OP is truly a process and not just a meeting. A sequence of steps is laid out
and followed and a participant is assigned as a resource to facilitate the meeting.
2. There is a concise written sales and operations planning policy that covers the
purpose, process, accountability and participants in the process.
3. The meeting dates are set well ahead to avoid schedule conflicts. Members
unable to attend the meetings are represented by someone empowered to
commit for that function.
4. A formal agenda is published before the meeting, and minutes of the meeting are
circulated afterwards.
5. While the agenda includes a review of past performance, the primary focus is on
future plans for at least finance, sales, production, inventory, backlogs,
shipments, new products and company performance measurements.
6. All company performance measurements are reviewed. All root causes for
deviations are identified with corrective actions and accountability.
7. Strategies for controlling inventory and/or delivery lead times (backlog) are
reviewed.
8. A mechanism is in place to ensure that aggregate plans agree with detailed
plans. There is consensus from sales, marketing, and operations.
9. Time zones are established as guides for managing changes In the near term,
an effort is made to minimize large, expensive changes to gain the benefits of
stability. In the mid term, priority changes are expected and valid schedules are
maintained. In the long term, less precision is expected, but direction is
established.
10. A computer-based modeling process, which permits evaluation of various levels
of demand, supply, production, and inventory, supports S&OP.
11. All participants are prepared. Large or unanticipated changes are communicated
to all functions prior to the meeting to eliminate surprises.
12. Assumptions are reviewed and documented (internal & external). This enhances
understanding of the business and is the rationale for future planning.
13. S&OP is a decision-making process. Conflicts are resolved. Decisions are
made, documented, communicated, and implemented.
14. Marketing strategies that result in demand shifts (price increases, early take
programs, return programs) are reviewed to obtain alignment and support.
Last revised: 12/12/97 Page 6
15. Metrics and goals are established for S&OP. They are kept current.
Accountability is clear . Critique of the S&OP process and metrics for
improvement is ongoing.
16. New product introduction plans are agreed to and schedules approved at every
meeting.
17. Volume projections developed in the S&OP process are the basis of the
businesss annual profit plan and latest profit projections. When S&OP profit
projections differ from those contained in the profit plan, the differences are either
reconciled or the sales and operations plan and resultant profit projection is
updated.
18. Capital deployment and maintenance initiatives are aligned with the S&OP plans.
19. S&OP includes a periodic review of the market offering (e.g., customer priority,
SKU rationalization, channel assignments).
All customers and products are placed in clearly prioritized classifications.
Service levels for each category are defined, and performance is measured.
SKUs channel designation has been established and committed to based
on quadrant analysis, competition, customers requirements, etc.
B) Cross-functional Pre-S&OP processes ensure adequate preparation for the
formal S&OP meeting. The process works at the product family level,
developed directly from detailed demand and supply plans at the SKU level in
LogsPlus.
1. The pre-S&OP process includes all functions affected by the decisions made at
S&OP.
2. In pre-S&OP, the plans are reviewed at the SKU level as necessary, within
families, in the units of measure that communicate most effectively. LogsPlus
contains linked data for both the sales/marketing and the
operational/manufacturing views of the S&OP plan.
C) Where appropriate, the scope is global, and integrated with regional S&OP
processes. A global S&OP meeting is held monthly to reconcile regional plans
and decide global issues.
1. A formal procedure exists that links local and regional sales and operations
planning processes into a global network to permit planning of inter-regional
product movement, resource allocation, etc.
2. A single set of definitions, conventions, and practices (e.g., family definitions,
units) is used by all regions as the basis for global planning within a business.
D) Financial/operational integrationa single set of numbers is used by all
functions, with the operating systems providing the source data used for
financial planning, reporting and measurement. All financial systems (billing,
accts. payable, cost acctg., purchasing, receiving, etc.) are fully integrated with
all transaction systems.
1. The finance function uses the same data on sales, shipments, etc., to measure
performance as other functions use.
2. The finance function recognizes limits of traditional performance measurements,
particularly those related to overhead allocation, and understands why those
methods may produce misleading results.
3. Financial practices that impede improvements that would result from sound just-
in-time practices have been identified and are being eliminatedparticularly
those practices related to overhead allocation.
Last revised: 12/12/97 Page 7
4. Finance is proactive in simplifying the cost accounting system and eliminating
non-value adding activities.
5. Simulation tools are actively used to convert operating data into approximate
financial impacts quickly for decision making and contingency planning in the
S&OP process.
6. Accounts payable, purchasing, and receiving are integrated with material receipt
transactions. Non conformances are managed to <2% of transactions.
7. Material receipt transactions are recorded real time, accurately. Purchasing is
responsible for accurate pricing data for valuation purposes in Prism and general
ledger.
E) Generation of Product Costs
Executive and managers believe the accounting system generates valid product
costs at the package level, reflecting the true costs involved in producing and
delivering the Business Teams products. Activity - based costing as well as
other costing methodologies are understood, and the most suitable costing
method is used.
1. The cost system clearly distinguishes between value-added and non-value-added
costs.
2. Management recognizes what portion of its costs is direct labor, material, and
overhead. Its focus and systems support the major cost category.
3. The cost system can adequately support product costing, pricing, investments,
make-or-buy decisions, and cost-reduction activities.
Last revised: 12/12/97 Page 8
Demand Planning Process
B2. Forecasting and Demand Planning
4 3 2 1 0
(See also Section A4.) Corporate tool: LogsPlus o o o o o
A) A process exists for forecasting all anticipated demands, with sufficient detail
and adequate planning horizons to support Sales & Operations Planning and
Master Production Scheduling.
1. Accountability for developing and maintaining the forecast clearly rests with the
Sales organization. The Demand Planner is formally linked to the Sales
organization. The importance of the demand planning function is evident by its
position in the organization.
2. The accountable demand planner is highly experienced and understands the
business (product, customer base, marketplace, the SKU channels,
manufacturing system, etc.). The demand planner is adequately linked to the
product management and product development processes.
3. Sales and Marketing are responsible for communicating significant demand
changes and market intelligence promptly. There is a well documented process
for providing necessary sales input to the Forecasting Process.
4. Responsibility for evaluating and using market intelligence is clearly defined.
5. All demands are included in the forecast (e.g., internal use, interplant, inter-
regional).
6. Statistical forecasting capabilities in LogsPlus are used where applicable.
7. Forecasts are available in Logs Plus at the product/package/customer ship-to-
level. They are reconciled with aggregate forecasts and communicated to the
sales force. Forecast SKUs are correctly mapped to operational SKUs for use by
the production planner.
8. Forecast consumption and proration rules are set-up and managed in LogsPlus.
9. Assumptions underlying the forecasts are documented, reviewed, and updated
as conditions change.
10. Aggregate and detailed forecast measurements support continuous
improvement.
11. A process for continuously monitoring and managing abnormal one-time demand
is in place.
B) The forecasting process is designed to support the multi-channel business
model framework.
1. Mass market SKUs are forecast by major customer ship-tos individually, the
remainder are forecast aggregate.
2. Smaller, less predictable Special Order SKUs are grouped and forecast in
aggregate.
3. Turbo SKU demand is linked directly to the customers planning (mrp) systems.
C) Sales/Marketing understands the impact of sales planning and forecasting on
service levels to customers and RONA for the Business. Sales areas are
provided with feedback on sales forecast accuracy at least monthly following a
well-defined process. Sales areas have objectives for improving forecast
accuracy for SKU/customer ship-to combinations which have a direct impact
on Operations ability to reliably meet demand.
Last revised: 12/12/97 Page 9
B3. Network Design & Analysis
4 3 2 1 0
Corporate tool: LogsPlus DRP o o o o o
A) The order fill network (e.g., sourcing, warehouses, order fill points) is
reanalyzed periodically. This occurs when there are significant changes in
customer demand, transportation costs, etc. The analysis balances customer
service with the total delivered cost (including costs of production complexity,
and inventory, as well as direct costs such as freight, warehousing, and taxes).
The forecasting process is aligned with the current network design.
1. Mimi models are available for all major product supply networks, and they are
updated regularly (e.g., annually).
2. All applicable costs are available for the models.
3. LogsPlus always reflects the current order fill network (production and
distribution).
B4. Distribution Planning & Replenishing
4 3 2 1 0
Corporate tool: LogsPlus DRP o o o o o
A) Distribution Resource Planning (DRP) is used where applicable to manage and
automate the replenishment of warehouses or other nodes in the supply
network to minimize total cost.
1. A concise, written DRP policy defines purpose, process, participants,
responsibilities, rules, assumptions, goals, and metrics.
2. A well defined and documented decision and allocation process to handle
shortage situations is established and followed.
3. Where a distribution warehouse network is used, LogsPlus is used to handle
implementation of a businesss distribution policies. Approved replenishment
orders are sent automatically from LogsPlus to the appropriate order entry
system for execution. Lead times reflect actual performance.
4. Distribution requirements are considered and reconciled through S&OP and
master scheduling processes, and again between the distribution plan and the
production plan.
5. The distribution network includes all SKUs at each warehouse.
6. Forecasts are available and maintained for each SKU in each warehouse.
7. Time periods for distribution requirements planning are weeks or shorter.
8. DRP is run weekly or more frequently.
9. The distribution plan represents what actually is being shipped from all of the
supply sources.
10. DRP shipments are scheduled to meet due dates while minimizing costs and
balancing loading and shipping capacity.
11. Replenishment plans are shared with carriers in advance to reduce shipping
costs.
12. Mode and ship quantities are selected to minimize overall delivered cost.
13. The system provides information for transportation planning that meets the needs
of the sites and reduces transportation costs.
14. LogsPlus DRP lead times are matched to actuals and reviewed regularly to
identify opportunities for reduction.
Last revised: 12/12/97 Page 10
B5. Turbo Replenishment Planning
4 3 2 1 0
Corporate tool: LogsPlus DRP o o o o o
A) Partnerships are being developed with high-volume, repetitive-shipment,
strategic customers to improve the reliability and reduce the costs of supply.
LogsPlus functionality is used for replenishment to Turbo sites.
1. Turbo customer/product combinations are chosen for high strategic business
value, targeting cases where we can reduce the overall supply chain costs and
inventories. This is a joint decision among sales, marketing, and operations.
2. Total delivered cost is tracked, and the two companies work together to reduce
it.
3. Written goals and plans exist to evaluate the performance of each Turbo channel
offering.
4. Turbo replenishment customers share their production and consumption plans
with us to allow more predictable, automated replenishment planning. These
time-phased plans have adequate horizons to plan materials. Capacity is linked
to the planning process.
5. Requirements for each SKU at each location are updated weekly or more
frequently.
6. Performance for replenishment is measured and tracked.
7. Electronic commerce is utilized to minimize transaction costs.
Last revised: 12/12/97 Page 11
Supply Management Process
B6. Master Production Scheduling
4 3 2 1 0
(See also Section E1.) Corporate tool: LogsPlus, Mimi o o o o o
The master production schedule process is continually managed in order to
ensure a balance of stability and responsiveness. The master production schedule
is maintained in LogsPlus at the SKU level for each production unit. The sum of
these represents the family-level S&OP production plan.
1. Accountability for maintaining the Master Production Schedule is clear, and the
importance of this effort is reflected in the organization and reporting relationship
of the Master Production Scheduling function.
2. A written Master Production Scheduling policy is followed. The policy includes
authorities and policies for changing the MPS.
3. Master Production Schedulers are highly experienced individuals with a deep
understanding of the business, the manufacturing process, and the
manufacturing planning and control systems.
4. Master Production Schedulers identify issues and provide background
information for input to the S&OP process.
5. The Master Production Schedule is realistic over the entire S&OP horizon - i.e.,
it is capacity and materials feasible.
6. Master Production Schedulers react to feedback that identifies problems with
materials or capacity availability and initiate resolution.
7. Master Production Schedule changes are measured and reviewed for root cause.
8. Planning bills of material, where appropriate (e.g. for aggregated Make-To-Order
supply planning), are used and maintained by the Master Production Schedulers.
9. MPS stability is measured and improved. Goals for improvement are established
and achieved.
10. Formal policy with clear accountability governs the use safety stock to increase
responsiveness and compensate for variability in supply or demand.
11. The bill of material structure supports the forecasting and master scheduling
processes. All MPS levels on the BOM (e.g., scheduled intermediates) are
identified and planned.
12. The MPS is in weekly, daily, or smaller periods and is updated at least weekly
over the S&OP planning horizon.
13. The MPS horizon is firmed using time fences and firm planned orders.
Guidelines for the length of the horizon include: operational cost of changing the
schedule, cumulative lead time, current backlog, and the need for stability of
operations.
14. Forecast consumption processes in LogsPlus are used to maintain the forecast
between forecasting periods.
15. Rough-cut capacity planning, or its equivalent, is used to evaluate the impact on
critical resources of significant master schedule changes. Demonstrated
capacity is compared to required capacity.
16. A weekly Master Production Schedule communications meeting is attended by
all using functions.
Last revised: 12/12/97 Page 12
B7. Capacity Analysis
4 3 2 1 0
Corporate tool: LogsPlus, Mimi, Prism o o o o o
The capacity planning process is based on realistic demonstrated production rates
for each product in the MPS for a given production unit.. This is used to evaluate
the feasibility of master schedules and the S&OP. Maintenance and reliability
efforts are used to increase demonstrated capacity.
1. Planned capacity equals demonstrated plus planned (committed) improvements.
2. Manufacturing is accountable for maintaining capacity planning parameters in
Prism, Mimi, LogsPlus, and DCSs and for the validity of capacity plans.
3. Cycle times are measured and improved; when proven, these improvements are
reflected in the capacity plan.
4. Equipment uptime is improved through predictive maintenance. When proven,
these improvements are reflected in the capacity plan.
5. Accurate parameters (e.g., batch cycle times, transition times, sequence rules)
are built into Mimi scheduling models.
6. Plant layouts are revised to simplify and improve the physical flow through the
plant.
7. The business has considered the use of theory of constraints and/or cycle time
methodologies.
Last revised: 12/12/97 Page 13
Materials and Services Planning Process
C1. Planning of External Supply
4 3 2 1 0
(See also Section E2.) Corporate tools: LogsPlus, Prism Procurement o o o o o
A) A Supplier Strategy is in place for all acquisitions -- regardless of purchase
classification
1. Volume requirements are leveraged across sites and regions to minimize total
acquisition costs, and simplify sourcing plans and maximize supplier
performance.
2. Suppliers are categorized and potential tools identified for each category:
Strategic Alliance Long-term supply contracts with suppliers who are pre-
qualified, for sourcing larger volume key materials.
Relationship attributes:
Business plans, Supplier Long-Range Plans and Suppliers Schedules are
provided.
Asset management through use of supplier-owned, and supplier-managed
inventory programs, JIT delivery process, etc.
Incoming inspection and testing eliminated. Supplier certification is used
rather than COAs accompanying shipments.
Electronic transaction path (ERS, EDI, EFT) and electronic transmission of
documentation (Advanced Shipping Notification, etc.)
Suppliers run Class A-equivalent processes which can be integrated with our
plans and they reliably produce and deliver product to meet our plan in a safe
manner.
Partner - Contract suppliers who respond to purchase orders and planned
releases. Relationships are still leveraged and long-term in nature.
Relationship attributes:
Concentration on reducing cycle times and streamlining supply process
Testing and related quality is supplier responsibility, supplier certification
rather than COAs accompanying shipments.
Electronic transaction path (ERS, EDI, EFT) and electronic transmission of
documentation (Advanced Shipping Notification, etc.)
Suppliers reliably produce and deliver product to meet our requirements in a
safe manner.
Supplier Schedules and Supplier Long-range Plans are shared where
appropriate.
Approved Supplier Suppliers for unplanned or custom work, outside testing
or where less well- defined specifications for materials or service required exist.
One time purchases without established supplier contract.
Relationship attributes:
Co-development in nature, Toll contractor service, plant trials.
Quality control and testing is critical and is performed by R&H, during
development process.
Contracts/orders are highly specific containing clauses with regard to:
shared risk, safety, product liability and development goals and
measurements.
Last revised: 12/12/97 Page 14
B) A Supplier Planning and Scheduling process provides visibility for Key
Materials covering an adequate planning horizon. Supplier Schedules and
Supplier Long-range Plans from our MRPII system are shared
regularly/automatically with our key suppliers.
1. A Supplier selection and evaluation process exists and includes a Supplier
Certification Program.
2. Supplier Long-Range Plans that include projections of requirements out 18-
months or longer are shared with suppliers to guarantee adequate capacity to
support business requirements.
3. Future projections that extend beyond the suppliers quoted lead time are based
on Sales & Operations Plan and the long-term Business Plan.
4. Key materials are planned and scheduled considering facts, such as, long lead
time and criticality, minimum 13 week (rolling) materials requirements plan is
shared with designated suppliers via Supplier Schedules.
5. Key materials are evaluated by site and or region for such processes as:
SOI/Consignment supplier owns and manages inventory
SMI/VSP (Vendor Stocking program)
Integrated Supply - consolidated purchase of materials
Consortium buying, shared storage asset costs.
6. Suppliers agree to plan material and capacity to meet the requirements within
the specifications stated: OEM, manufacturers numbers, generic descriptions.
7. Appropriate storage environment and receiving techniques are planned for each
material involved.
C) Strong, beneficial partnership relationships are established up front and continue
over time with the world class suppliers, to facilitate improvements in quality, cost,
and overall responsiveness. Our purchase volumes are leveraged across sites and
regions to achieve improvements in cost, quality, and overall responsiveness.
1. Strategic Alliance and Partner suppliers have been educated in the Rohm and
Haas Supply Chain management process, MRP II, Maintenance Reliability,
SOI/SMI, JIT. They also understand the scheduling process using the R&H
production plan and scheduled shipments.
2. Suppliers understand the principal behind "silence is approval" and agree to
notify the Production and Maintenance Planner/Scheduler, in advance, if a due
date will be missed.
3. Methods and goals that determine accountability for supplier delivery
performance have been established; e.g., delivery fence, commitment zones, on-
time delivery.
4. The number of suppliers is reduced and rationalized; this is a stated business
objective.
5. Inbound transportation costs and reliability are managed and are being improved
wherever possible.
6. A Supplier Rating System is used to trigger improvements in overall supplier
performance. Metrics are agreed to between the supplier and R&H. Metrics are
linked to and promote best practices and continuous improvement in accordance
with Purchasing Policies and Practices. Site Procurement staff input non-
conformance issues to global/regional buyers: a formal feedback process
ensures that they receive corrective action responses from suppliers.
7. A supplier certification process allows reduction/elimination of incoming
inspection and count and weight verification.
Last revised: 12/12/97 Page 15
8. A clear policy statement defines the overall roles and responsibilities of the
Production and Maintenance Planner/Schedulers, as well as the
Buyers/Strategists and determines at which points each becomes involved in the
process. The policy covers all communications between the Supplier, the
business and the R&H Corporate Supply Chain organization. Site buyers support
the use of globally-leveraged or regionally-leveraged key suppliers.
9. Point of use delivery is maximized, avoiding centralized storage where possible.
D) Electronic Commerce is used to lower the cost of doing business with
suppliers.
C2. Planning of Internal Supply
4 3 2 1 0
Corporate tools: LogsPlus o o o o o
A) Time-phased requirements for monomers and other critical raw materials are
driven by the Master Production Schedule at the receiving site.
1. All internal suppliers are functioning in Turbo channel; planned demands on
internal suppliers are automatically communicated through LogsPlus and Prism,
and internal suppliers make and deliver based on the plan. There are no orders
and no manual work by consuming plants to communicate routine demand
figures.
2. Production and shipping schedules within the frozen time fence are generated
from LogsPlus.
B) Supplying and consuming business units jointly manage the supply chain for
best cost/performance; their roles and responsibilities are clear.
1. The supplier business/site owns and manages the availability of the supplied
material. The customer business/site trusts the supplier to meet their needs.
2. Both the internal supplier and user operate under the silence is approval
principle; both are responsible for providing feedback on schedule changes or
problems.
3. In-transit inventory is tracked (and considered in the replenishment plans) and
any delays are reported real-time into the system.
4. Lead times are established with all internal suppliers.
5. Accounting and other transaction processing activities are minimized.
6. A single set of quantity and quality are used and trusted by both the user and
internal supplier; no COAs are sent.
Last revised: 12/12/97 Page 16
C3. Transportation and Warehouse Planning
4 3 2 1 0
Corporate tools: Being defined/developed o o o o o
A) The same demand, supply, and inventory data used in the S&OP process is also
used to plan and contract transportation and warehousing services across the
order fill network.
1. Demand forecast data is available at key customer ship-to level to guide logistics
planning and contracting.
2. Our supplier rating system is used to align the carriers service and capabilities
with the requirements of our strategic customers.
3. Best practices are benchmarked against chemical and other industries.
B) The focus of logistics contracts is on partnering with preferred
transport/warehousing providers for best overall cost and performance.
1. Carrier and warehouse strategies are developed by Logistics staff in partnership
with all business teams so that we can leverage volumes across businesses.
2. The number of warehouses and carriers is continually reduced. Single sourcing
with Partner providers, where practical, is a stated strategy for achieving best
cost/performance.
3. Carrier selection is based on the total (short-term/longer-term) lane network
costs/services, rather than as the lowest rate for individual lanes.
4. Partner carriers participate with Rohm and Haas and our strategic customers in
the continuous improvement of the delivery/transportation process.
5. We work with our partners carriers to identify back-haul opportunities (including
possible coordination with inbound shipments of supplies and materials).
C) Information is shared (preferably electronically) with partner carriers to leverage
predictable shipments.
1. Our preferred carriers have access to planned shipments in advance
2. Carrier performance and responsiveness is tracked and continually improves.
Last revised: 12/12/97 Page 17
Order Management Process
D1. Order Entry / Processing
4 3 2 1 0
Corporate tools: OPIM, COM, Order Pad, Supply Line o o o o o
A) A multi-channel process facilitates reliable, efficient order processing
1. Customers have been categorized into priority classes, with defined service
policies. Sales and CSRs fully understand and implement these policies.
2. Demand for Turbo product-customer combinations is handled without need for
intervention by the CSR.
3. Orders for Mass Market (make to stock) SKUs are accepted without delay,
without the need for checking inventory.
4. Lead time policies and/or CSR schedule visibility enables reliable order
promising for special (Make to Order) products.
5. Lead times for MTS and MTO items are clearly defined, and are respected by
CSRs, sales, and customers.
B) Order entry and promising processes focus on customer satisfaction, and are
aligned with the master production scheduling system and inventory data.
1. Business policies regarding order processing (e.g., minimum order quantity and
lead-time policies) are documented and used.
2. Orders are processed on a timely basis.
3. Original customer requested delivery date/time and our promised delivery
date/time are recorded in the system and tracked.
4. Any potentially late shipments are tracked, and customers are notified in
advance.
5. Customer orders requested but not accepted are tracked as lost sales.
6. Individual customer orders are automatically assigned to the location defined in
the sourcing network.
D2. Billing and Collecting
4 3 2 1 0
o o o o o
1. Invoicing errors are less than 2%. Invoices are eliminated where possible.
2. Auto-faxing, consolidated billing, EDI, EFT, and automatic cash application are
used where appropriate to minimize transaction costs.
3. A process is in place to correct and improve timeliness of when invoices are sent
to customers.
4. Shipping transaction entries drive the updating of the billing system at the same
time as the inventory system.
5. Risk assessment and credit management process does not interfere with the
processing of orders or flow of material to strategic customers.
Last revised: 12/12/97 Page 18
Production Processes
E1. Plant Scheduling
4 3 2 1 0
(See also Section B6.) Corporate tools: Mimi Scheduling o o o o o
A) The detailed near-term plant schedule is managed as an integral part of the
overall Master Production Schedule Process. The process balances schedule
stability with responsiveness. The multi-channel framework is used to enable
greater stability.
1. LogsPlus master production schedule requirements are sequenced using Mimi
by the appropriate plant scheduler.
2. Changes to the detailed production schedule are quickly communicated to all
appropriate personnel.
3. Missed schedules are communicated daily in order to reschedule downstream
processes and meet Master Production Schedule due dates.
4. Time fences for frozen periods are respected.
5. If significant time delays are involved, Quality Control is scheduled as an
operation to support Master Production Schedule due dates.
B) Mimi is used to link the LogsPlus plans to Prism schedules and to optimize
shop floor schedules appropriately within the planning time fences.
1. Accountability for maintaining the detailed near-term production schedules is
clear, and the method of measurements and the goals have been agreed upon.
2. There are no off-line tools or parallel work processes in use. The actual shop
floor schedule is taken directly from Mimi scheduling.
3. The detailed production schedule accounts for all plant activity (e.g., preventive
maintenance, equipment cleanouts, etc.) as appropriate and represents a
realistic plan.
4. Predictive/preventive maintenance is coordinated with production schedules for
maximum asset utilization.
E2. MRP, Procurement and Paying
4 3 2 1 0
(See also Section C1.) Corporate tools: Prism Planning and Procurement o o o o o
A) A material requirements planning process derived from the production plans
and schedules generates production/procurement recommendations
automatically.
1. Material planners understand the product, the manufacturing process, and the
manufacturing planning and control system.
2. Everyone, including planners, production supervisors, and buyers, operates
under the silence is approval principle and each is responsible to provide
feedback on schedule problems that cannot be resolved.
3. Planners and Purchasing personnel are responsible for maintaining, periodically
reviewing, and analyzing the accuracy and validity of all appropriate planning
parameters, such as order quantities or lot sizes, lead times, and safety stocks,
and price breakpoints.
4. The firm planned order capability of the procurement system is used, only when
necessary to override the suggested plan.
5. Planning, production, logistics and purchasing hold formal review meetings.
6. Material requirements planning time periods are weekly or smaller to provide time
for appropriate resolution of priorities.
Last revised: 12/12/97 Page 19
7. Planners are trained in and use the following system capabilities:
using (at least) single-level pegging to identify the source of demand
effectively checking raw material / supplies availability to determine the
feasibility of releasing an order or schedule
altering the bill of material for an individual order in order to handle temporary
substitutions
using standard logic to generate action/exception messages including need
to release orders, need to reschedule orders, need to cancel orders, change
due dates, or release past due orders.
8. All action/exception messages are prioritized, and identified problems are acted
upon, when appropriate, before the next material requirements planning run.
9. A bottom up, re-planning process is used to reconcile problems and handle
exception messages.
B) Procurement processes at the site level are automated through Prism
Procurement, requiring minimal manual intervention.
1. Procurement parameters to support Prism Planning are accurate and single-
sourced in Prism, and are routinely audited for accuracy.
2. There is an ongoing effort to reduce the number of different raw materials (RM
standardization). Generic chemical names rather than Trade Marked names are
used in BOM. (moved here from previous section)
3. Prism Planning is run as often as necessary to maintain valid supplier
schedules. Time horizon should be longer than the longest lead time material.
Normally, weekly processing is adequate, but daily processing or an on-line
capability may be required.
4. Procurement releases are conveyed to suppliers automatically by Prism, without
manual intervention, whenever possible.
5. Supplier Scheduling processes are used where appropriate (see section below);
for items not on a supplier schedule, at least 95% of purchase orders are
released with full lead time.
6. Procurement cycle times (including lead times) are being shortened to reduce
inventory and enhance flexibility.\
7. All necessary items, such as materials, inspection procedures, and process
instructions, are managed through formal product change procedures.
8. Planning and control techniques are used to manage the phase-in and phase-out
of materials whose sourcing, quality, etc. are being changed.
9. An anticipated delay reporting process is used to maintain receipt due date
validity.
10. Manufacturing is accountable for real time, accurate receiving data input.
C) The Accounts Payable process for materials/services is automated and
streamlined.
1. Accounts payable, purchasing, and receiving are integrated to material receipt
transactions. Material receipt non conformances are managed to <2% of
transactions.
2. Material receipt transactions are recorded in the general ledger for inventory
valuation purposes.
3. There is an active goal to employ Electronic Commerce (Electronic Data
Interchange, Electronic Funds Transfer, Evaluated Receipts Settlement, etc.) to
minimize transaction costs for both parties.
Last revised: 12/12/97 Page 20
D) Procurement activities at the plant site are aligned with the supply strategy
defined in Section C1. For many items, Supplier Schedules provide near-term
visibility of future demand for key items directly to the supplier.
1. The Supplier Schedule displays scheduled receipts (e.g. releases) and planned
orders over the planning horizon for all materials that a Strategic Alliance and
Partner suppliers provide.
2. Time periods on Supplier Schedule are weeks or smaller for at least the first 13
weeks.
3. The supplier schedulers and buyers meet with planners as frequently as required
to maintain a valid material schedule.
4. Scheduled receipts cover the suppliers negotiated lead times and planned
orders beyond the lead time give the supplier visibility of future needs.
5. Commitment zones representing firm purchases, material reservations, and
capacity planning are established and clearly identified in the Supplier Schedule.
6. Supplier Schedules are communicated to suppliers at least weekly.
Communication is automatic and electronic wherever possible.
7. For requirements further out than the supplier schedule provides, supplier long-
range plans are used to provide suppliers with monthly requirements out through
the S&OP horizon.
8. Delivery or order quantities of purchased materials are managed by EOQ
techniques where appropriate, resulting in adequate inventories with minimum
total acquisition cost.
E) For multi-business plant sites, an active network of business (area) and
functional staff representatives is in place to drive continuous improvement
through excellent internal customer relationships.
1. Cross-functional teams/network are in place representing all involved areas and
meet on a regular basis.
2. Specific goals and objectives are understood and supported by all.
3. Roles and responsibilities are defined for all participants in the process.
4. A formal shared risk process is used to agree to put items into inventory, set
inventory levels, link to entities, set maximum/minimum levels, etc.
E3. Conversion
4 3 2 1 0
Corporate tool: Prism o o o o o
A) Performance against the scheduled output and production costs is tracked
continuously by all operating staff.
1. Production management is accountable to meet operation due dates.
2. Information from Prism on key cost drivers, by SKU, is used to help focus
improvement efforts.
3. Operating staff at all levels depend upon Prism as a source of performance and
cost measures.
4. Cost standards are aligned with S&OP plans and adjusted whenever significant
process changes are made.
B) Root causes of poor performance are captured on the shop floor and drive
active, focused TQL improvement. Process capabilities are tracked and
improved to ensure that product can be reliably supplied to the scheduled
demand.
Last revised: 12/12/97 Page 21
1. A preventive maintenance program is in place, and program compliance is
measured.
2. Asset utilization (AU and OAU) is measured and continuously improved.
3. Cycle times are measured and continuously improved as appropriate.
4. Employees at all levels and in all areas are involved in eliminating non-value-
added work.
5. A formal and active program exists to increase yield by reducing off-grade and
rework.
6. The time and effort required for product transitions are systematically reduced to
enable more flexibility and to shorten minimum production campaigns.
7. Good housekeeping (orderliness) is pursued as a high priority by everyone.
8. There is an active goal to simplify and reduce the number of required
transactions and reports.
C) Toll Conversion
All toll operations have been evaluated against standard criteria to decide how
each will be integrated into our manufacturing units. The level of integration of
toll operations is based on optimizing cost, information flow, and productivity.
The ultimate goal is to have toll operations that operate as fully integrated
manufacturing operations wherever applicable. In the toll selection process,
the ability to be integrated with Supply Chain processes is on an equal par with
quality and safety criteria.
E4. Production and Quality Reporting
4 3 2 1 0
Corporate tools: Prism, QCS, ER Labs o o o o o
A) Timeliness of data entry into the systems for both quantities and quality is
adequate so as not to delay meeting supply commitments.
1. Accountability and responsibility for the timeliness of data entry is clear.
B) Time for quality testing is minimized, and ultimately eliminated (SPC). There is
a single set of quantity and quality numbers within the system, used and trusted
by all functions within the plant.
1. Production retains responsibility for analysis-pending material until it is classified
ready for shipment.
2. Production takes responsibility for non-shippable stock; it does not occupy
needed storage space or interfere with shipping processes.
C) Specifications are clear, and there is no spec within a spec.
Last revised: 12/12/97 Page 22
Delivery Processes
F1. Shipping/Delivery Management
4 3 2 1 0
Corporate tools: OPIM, MCMS, others being defined/developed o o o o o
A) The loading/shipping process is streamlined and automated for optimum cost-
effectiveness. Shipping systems are linked appropriately to production,
purchasing, order processing, customers, and carriers, so everyone can plan.
1. The appropriate level of forecasts and schedules for operational, tactical and
strategic planning is shared with carriers and our shipping operations on a timely
basis to ensure adequate capacity and to maximize operational efficiencies. The
MCMS tool or EDI is used whenever possible to automate this sharing of
information.
2. The system confirms scheduled pick-up date and time with carriers.
3. Employees have ready access to the computers and systems they need.
4. Timeliness of shipment reporting is sufficient to meet supply commitments.
Accountability and responsibility for the timeliness of data entry is clear.
5. The following best-practice concepts and systems have been evaluated for their
benefit on local loading/shipping processes:
Carriers provide certified bulk trucks (and we dont re-inspect) whenever
practical.
Carriers provide in-transit tracking of all equipment.
Primary carriers arrange backups when they cant provide service.
Inventory is automatically assignedcorrectlyby the system at the time
chosen by the business.
Advanced shipping notices are sent automatically to customers if needed.
The system auto-faxes COAs to customers when required.
Computer systems manage railcar fleets and track returned containers as
needed.
Pallet recycling programs which include customers and suppliers, are being
exploited.
The new inventory locator tool and re-warehousing tools are used where
appropriate to plan efficient storage and movement of inventory.
The Queuing and Query system is used to print documents only when
needed for shipping.
The CGII Labeling system is used to print hazard and shipment labels,
including export marks and customer-specific label information.
Scanned bar codes are used where appropriate to provide real-time reporting
of new production, storage locations, and shipments.
Last revised: 12/12/97 Page 23
Data Quality
G1. Single Set of Numbers
4 3 2 1 0
o o o o o
Everyone in the business uses the numbers that are formally managed within the
Rohm and Haas MRPII systems for all levels of planning, execution, and reporting.
Responsibility and accountability for developing and maintaining accuracy of the
data in all the MRPII systems is clearly defined in a written policy.
G2. Inventory Record Accuracy
4 3 2 1 0
o o o o o
There is an inventory control process in place that provides accurate raw material,
intermediate, finished goods and packaging inventory data required in the
planning processes.
Inventory Record Accuracy =
# of inventory record accurate within tolerance
Total # inventory records counted
> 95%
The inventory record accuracy process and cycle counting are used to
identify and correct the root causes of inventory errors and measure
inventory accuracy. The cycle counting process has replaced the periodic
physical inventory.
Inventory accuracy must be measured for all locations of inventory including
distribution centers and SOI/SMI customer locations.
G3. Bill of Material Accuracy
4 3 2 1 0
o o o o o
The planning and control process is supported by a properly structured, accurate,
and integrated set of bills of material (formulas, recipes) and related data. Bill of
material accuracy is in the 98-100 percent range.
Bill of Material Accuracy =
# of correct single level bill of material records
Total #of single level bills of material auditied
> 98%
Prism is the single source for the BOM and allows for easy and accurate
business planning and production planning/execution.
There is a bill of material accuracy audit process in place to ensure
accuracy of the BOM vs. demonstrated usage and to ensure that the same
BOM resides in Prism, LogsPlus, Mimi, and DCSs.
Bills of material are properly structured, represent the way products are
manufactured, and support the planning and control processes. The bills are
reviewed to make them flatter.
The primary use of the bill of material is for planning material and reporting
consumption. Costing considerations do not interfere with materials
planning.
All functions that use the bills of materials participate in their structuring.
Last revised: 12/12/97 Page 24
G4. Capacity Parameter Accuracy
4 3 2 1 0
o o o o o
The capacity parameters must be accurate to the level of detail required for
planning and scheduling. Accuracy of capacity parameters should be >95%.
Capacity Parameters Accuracy =
# of correct capacity parameters
Total #of capacity parameters auditied
> 95%
Capacity parameters are accurate and single-sourced in Prism Production
Models, and are uploaded (preferably electronically) to MIMI and LogsPlus.
Capacity Parameters are routinely audited for accuracy.
The capacity parameters must reflect the realistic demonstrated production
rate for the product on the production unit.
G5. Product Change Control Process
4 3 2 1 0
o o o o o
A written product or process change policy is followed to ensure consistent and
timely product changes.
Last revised: 12/12/97 Page 25
Performance Measurements
Root cause analysis is performed in all areas below to identify and correct
deviations from planned performance. Performance measurements include goals
for improvements.
H1. Customer Service - On Time Delivery
4 3 2 1 0
o o o o o
A) External Customer Delivery: A business must have 95% min on time delivery
for customer orders.
On Time Delivery =
# of orders delivered within a promised delivery window
Total # of orders
> 95%
Promised delivery window is that which is agreed to by the customer
An objective for on-time delivery to customer request date exists and
performance against the objective is measured.
B) Distribution Delivery:
On Time Delivery =
# of committed shipments delivered within a delivery window
Total # of committed shipments
> 95%
C) Internal Auto-Replenishment:
On Time Delivery =
# of committed shipments delivered within a delivery window
Total # of committed shipments
> 95%
H2. Sales Forecast Accuracy (Family)
4 3 2 1 0
o o o o o
Forecast Accuracy (Family) =
Volume forecast - actual volume
Volume forecast
Forecast error at the regional family level should be within a defined target
level (Typically 5-10%).
Review monthly at S&OP along with cumulative error to detect bias
H3. Sales Forecast Accuracy (SKU)
4 3 2 1 0
o o o o o
Forecast Accuracy (SKU) =
Volume forecast - actual volume
Volume forecast
Computed for each actively managed forecast SKUs and communicated to
responsible Sales Representative for continuous improvement.
Reviewed monthly along with cumulative error to detect bias
Also computed and reviewed for a group of actively managed forecast SKUs
within a sales territory. For example a Sales Manager may target about
80% of the actively managed SKUs in each Sales Territory to be accurate to
within 20%.
Last revised: 12/12/97 Page 26
H4. Production Performance to Plan (Family)
4 3 2 1 0
o o o o o
Production Plan Performance =
Actual Monthly Volume
Planned Monthly Volume
= 98 102%
Performance above and below plan should be tracked to expose bias and
trends.
Reasons for approved plan adjustments must be documented and tracked
H5. Performance to Master Production Schedule
4 3 2 1 0
o o o o o
Weekly MPS Performance =
# SKUs completed within quantit y and timing tolerance
# SKUs planned within the frozen LogsPlus planning period
> 95%
The basis of the above calculation is made up of plans for MTS SKUs and
real orders for MTO SKUs.
Performance is measured weekly and summarized for the monthly S&OP
review.
Daily MPS Performance =
# SKUs completed within quantity and timing tolerance
# SKUs scheduled within the frozen Mimi schedule period
> 95%
MPS Stability = 1 -
# of changes in frozen period
# of scheduled or planned items
The business must measure the stability of both the daily schedule and the
weekly plan at the SKU level of detail as two separate metrics.
There is no fixed Class A performance goal for schedule stability. Changes
to the MPS are measured and continuously improved.
Reasons for approved weekly plan or daily schedule changes must be
documented and tracked.
H6. Supplier Delivery Performance
4 3 2 1 0
o o o o o
Supplier delivery to scheduled receipt =
# of shipments delivered in promised delivery window
total # of scheduled shipments
> 95%
H7. Cycle Time Performance
4 3 2 1 0
o o o o o
Cycle times for all supply chain processes are measured and continually improved.
H8. Quality Performance
4 3 2 1 0
o o o o o
Quality objectives are established, performance is measured, and goals are
achieved for production and supplier defects.
H9. Financial Performance
4 3 2 1 0
o o o o o
Financial performance (revenue, cost, and profit) vs. set objectives is measured
monthly and communicated broadly in the organization. The business team has
confidence in the validity of the financial data and uses it for business decisions
within S&OP.
Last revised: 12/12/97 Page 27
Appendix A Additional Metrics to be Considered
B1. Sales and Operations Planning Process
#SKUs added / #SKUs discontinued over time
% Customers classified in prioritized categories
% of SKUs , volume and inventory in make-to-stock and make-to-order
channels
Total Supply Chain cost/unit
B2. Forecasting and Demand Planning
sum of the absolute value of the deviations of individual SKU error / total
forecast
% of SKUs above or below a target accuracy level
B4. Distribution Planning & Replenishing
DRP network completeness: 98% of SKUs are sourced correctly
Bill of distributions > 98%
B5. Turbo Replenishment Planning
Inventory versus agreed target range
Actual consumption versus plan
% shipments pre-planned/expedited
Transactional costs removed
B6. Master Production Scheduling
B7. Capacity Analysis
C1. Planning of External Supply
Number of suppliers
Supplier performance ratings/improvement
C2. Planning of Internal Supply
Cost of premium shipments
C3. Transportation and Warehouse Planning
Last revised: 12/12/97 Page 28
D1. Order Entry/Processing
% Perfect Orders
% responses to customers in < x minutes
Order entry errors as % of orders
Pricing errors as % of orders
Number of orders awaiting processing
% reduction in manual processing of orders
Cycle time from order receipt to release to plant/warehouse
call to order ratio
% of orders received electronically
% of orders processed hands-free
# business policy exceptions granted
D2. Billing and Collecting
Fewer than 2% invoicing errors
% of invoices handled by automatic cash application
% of strategic customer orders referred to credit during order processing.
ratio of shipments made to invoices generated
% of invoices automatically released (system audited)
E1. Plant Scheduling
Orders (i.e., Prism schedules) are released with full material and capacity
availability at least 95% of the time
E2. MRP, Procurement and Paying
Number of action/exception messages for each planner
Volume/causes of rescheduled demands
% payments made electronically
E3. Conversion
Percent unplanned maintenance downtime
E4. Production and Quality Reporting
Slow moving and Off-Grade (SMOG) inventory reductions
F1. Shipping/Delivery Management
% of carriers linked to our order systems
% of carriers providing EDI delivery data
Last revised: 12/12/97 Page 29
Appendix B Class A Auditing Process
The MRP II Class A auditing process is valuable throughout the implementation process. The 3 different audit types
(Directional, Pre-Audit and Final) have many similarities. They differ mainly in degree of reviewing actual operational
processes vs. planned / under development processes. Directional audits look and feel more like education and
consulting than they feel like actual audits. Pre-audits feel more like audits and are primarily to gauge readiness
and timing for Class A. The final audit is a true audit (similar to an ISO audit).
The directional audit assumes some processes are in place, some are being developed and some are only planned.
The directional audit is designed to accommodate varying degrees of implementation. The pre-audit on the other
hand assumes that all the processes are in place and in addition to looking at these processes, there is additional
emphasis on the steps that need to be taken to get the critical metrics for the processes to Class A status. A
business should be very close to starting their three continuous months run for Class A status when the pre-audit is
performed. The final audit assumes the business has Class A processes achieving Class A performance.
Type Pre-Requisite Objective Timing Process
Directional MRP II
Implementation plan
in place
Some processes
implemented and
working
- Evaluate the project resources
and direction vs the Class A
implementation project goals
- Provide assistance, guidance to
remaining process
implementations
- Assess if already implemented
processes are Class A in
practice
During MRP II
Implementation. Once /
Quarter or as needed
Varies by Process
status (Types A, B,
C) to accommodate
varying degrees of
implementation
Pre-Audit All the processes
are in place and
working on Class A
metric performance
- Review issues, remaining Class
A gaps for each process.
- Identify the few steps that need
focus to achieve Class A metric
performance.
Business is close (2-3
months?) from Final
Audit
Assessment of
Process Operations
in the work place
(All Type A)
Final Audit Business has Class
A processes in
place and achieving
Class A metric
performance
- Assess and provide rating vs.
Class A
- Provide suggestions for
improvements, gaps to focus on
Initial audit and follow-up
audit after three
continuous months of
Class A status.
Assessment of
Process Operations
in the work place
(All Type A)
The general flow of all the audits is the same: The detailed process is outlined below.
1. A kick-off session for all the participants to explain what will be going on and to go over some rules and
assumptions,

2. Individual process reviews: The details vary based on the stage of implementation.
Stage A: Processes that are implemented: this would include a detailed review of the process and work
practices with the people who operate the process - in their work place. It would also examine process metrics
and action plans designed to move the process to Class A performance levels.
Stage B: Processes that are under development: review with the full process development team or team
leader to review progress, action plans, issues, and timetables. May include for major process components that
have been put in place a detailed review of the process and work practices with the people who operate the
process - in their work place.
Stage C: Process developments not started yet: review the timetable and plans and resource requirements.

3. A final review session with all the participants to review the results of the audit and to re-establish or re-commit
to the Class A target date.
Last revised: 12/12/97 Page 30

4. A close-out meeting with the local executive sponsor to review staffing, resources, commitment and timing

One person from the site (usually the Class A project manager), and one person from the Supply Chain support
team (Supply Chain Center or business support team) would normally attend all the sessions with the auditor to act
as silent observers. No more than 3 external people should participate in the audit.
Confidentiality is a key component of the individual process audits. Process operators need to be very open with the
auditor.
Last revised: 12/12/97 Page 31
DIRECTIONAL AUDIT
0) Preparation
Establish the audit schedule
Define and invite all will be affected, included in the audit
Preliminarily define expectations (time required, general process, outcomes). Full audit if all plant
processes typically would require 2 or more days.
For processes that are planned or under development (Stage B or C), distribute current project plans to
external participants
For processes that are implemented (Stage A), assemble and distribute prior the following documentation
packet:
Few paragraphs discussing how the process was implemented vs. the business template (what
local options were implemented, etc.)
Process definition documents (relevant ISO documents, procedures, flowcharts, etc.)
Responsibility Matrix (whos responsible for which tasks and who their back ups are)
Latest process metrics performance
1) Kick-off session
Who: External participants (MRP II consultant, Supply Chain support, other);
Local project team, all who will be talked to in the audit
Where: Appropriate meeting room
Objectives
Explain the process and what will be going on
Explain, discuss the expected outcomes
Set, review the work schedule
Discuss the rules:
Confidentiality: all participants need to be open and honest about how things really work and what
the issues. There will be no ramifications of the honesty
Process: Presentation and Q & A
2) Individual process reviews: The details vary based on the stage of implementation.
-Stage A: Processes that are implemented: Detailed review of the work practices with the people who operate
the process - in their work place/
Who: External participants (MRP II consultant, Supply Chain support, other);
Local site coordinator (optional), those who operate the process (to doers)
Where: in the workplace of those who operate the process
Objectives
Assess if work completed is truly Class A in practice
Provide assistance, guidance if there are gaps, issues etc. in the work
Process:
Answer questions about how they operate the process such as:
Tell me what you do
What are the inputs and outputs of your tasks in the process?
What do you do with these inputs?
What are the procedures the define what you do?
What are the metrics you track and use?
Who: MRP II Consultants to those who operate the process
Last revised: 12/12/97 Page 32
Review current process metrics and action plans designed to move the process to Class A performance
levels. Provide guidance, assistance where possible. Who: MRP II consultant, Supply Chain support
personnel
Assess work practice vs. the MRP II principles and the Class A checklist. Highlight any potential issues,
gaps in the project plans. Who: MRP II consultant, Supply Chain support personnel
-Stage B: Processes that are under development: This is a mixture of the Stage A and C process. Use
Stage A process with process components that are operating and in place. Use Stage C process for
components being implemented or yet to do.
-Stage C: Process developments not started yet: review the timetable and plans and resource requirements.
Who: External participants (MRP II consultant, Supply Chain support, other);
Local site coordinator, local process owner, others as desired
Where: Appropriate meeting room
Objectives
Review the timetable and plans and resource requirements
Assess if work completed is Class A in practice
Provide assistance, guidance to upcoming implementation tasks outcomes
Process:
Explain the project status and plans Who: Local process owner or site coordinator
Describe the process is that will be put in place. The level of detail should match that of the process
templates flowchart (A flowchart walk through could be used). Who: Local process owner
Check for understanding of the Class A checklist. Are there any questions, concerns, unclear items?
Who: All with the MRP II consultant
Highlight any potential issues, gaps in the project plans Who: MRP II consultant, Supply Chain support
personnel)
3) Final review session.
Who: External participants (MRP II consultant, Supply Chain support, other);
Local project team, other participants as desired
Where: Appropriate meeting room
Objectives
Review the results of the audit. There could be many gaps, issues highlighted during the assessment. Is
the implementation on track vs. the critical path milestones?
Re establish, re commit to the Class A target date
Agree on action items as needed
Process: Presentation and Q & A
4) Close-out meeting to review staffing, resources, commitment and timing
Who: External participants (MRP II consultant, Supply Chain support, other);
Local site coordinator, local executive sponsor
Where: Appropriate meeting room
Objectives
Review staffing, resources. Discuss adjusting if necessary.
Review commitment and timing. Discuss adjusting if necessary.
Agree on action items as needed
Process: Discussion and Q & A
Last revised: 12/12/97 Page 33
PRE-AUDIT
0) Preparation
Establish the audit schedule
Define and invite all will be affected, included in the audit
Preliminarily define expectations (time required, general process, outcomes) Full audit if all plant
processes typically would require ?? .
Assemble and distribute prior the following documentation packet:
Few paragraphs discussing how the process was implemented vs. the business template (what
local options were implemented, etc.)
Process definition documents (relevant ISO documents, procedures, flowcharts, etc.)
Responsibility Matrix (whos responsible for which tasks and who their back ups are)
Latest process metrics performance
1) Kick-off session
Who: External participants (MRP II consultant, Supply Chain support, other);
Local project team, all who will be talked to in the audit
Where: Appropriate meeting room
Objectives
Explain the process and what will be going on
Explain, discuss the expected outcomes
Set, review the work schedule
Discuss the rules:
Confidentiality: all participants need to be open and honest about how things really work and what
the issues. There will be no ramifications of the honesty
Process: Presentation and Q & A
2) Individual process reviews: Detailed review of the work practices with the people who operate the process - in
their work place.
Who: External participants (MRP II consultant, Supply Chain support, other);
Local site coordinator (optional), those who operate the process (to doers)
Where: in the workplace of those who operate the process
Objectives
Assess if work completed is truly Class A in practice
Provide assistance, guidance if there are gaps, issues etc. in the work
Process:
Answer questions about how they operate the process such as:
Tell me what you do
What are the inputs and outputs of your tasks in the process?
What do you do with these inputs?
What are the procedures the define what you do?
What are the metrics you track and use?
Who: MRP II Consultants to those who operate the process
Review current process metrics and action plans designed to move the process to Class A performance
levels. Provide guidance, assistance where possible. Who: MRP II consultant, Supply Chain support
personnel
Assess work practice vs. the MRP II principles and the Class A checklist. Highlight any potential issues,
gaps in the project plans. Who: MRP II consultant, Supply Chain support personnel
Review, discuss any checklist issues with concerns.
Last revised: 12/12/97 Page 34
3) Final review session.
Who: External participants (MRP II consultant, Supply Chain support, other);
Local project team, other participants as desired
Where: Appropriate meeting room
Objectives
Review the results of the audit. Show the summary page of the Class A checklist and review the ratings
given. There may be a few gaps but hopefully at this stage relatively few
Review readiness for Class A final audit. Is the implementation on track vs. the critical path milestones?
Commit to the Class A target date
Agree on action items as needed
Process: Presentation and Q & A
4) Close-out meeting to review staffing, resources, commitment and timing
Who: External participants (MRP II consultant, Supply Chain support, other);
Local site coordinator, local executive sponsor
Where: Appropriate meeting room
Objectives
Review staffing, resources, commitment and timing. Discuss adjusting if necessary.
Agree on action items as needed
Process: Discussion and Q & A
Last revised: 12/12/97 Page 35
FINAL AUDIT
0) Preparation
Establish the audit schedule
Define and invite all will be affected, included in the audit
Preliminarily define expectations (time required, general process, outcomes) Full audit if all plant
processes typically would require ??.
Assemble and distribute prior the following documentation packet:
Few paragraphs discussing how the process was implemented vs. the business template (what
local options were implemented, etc.)
Process definition documents (relevant ISO documents, procedures, flowcharts, etc.)
Responsibility Matrix (whos responsible for which tasks and who their back ups are)
Latest process metrics performance
1) Kick-off session
Who: External participants (MRP II consultant, Supply Chain support, other);
Local project team, all who will be talked to in the audit
Where: Appropriate meeting room
Objectives
Explain the process and what will be going on
Explain, discuss the expected outcomes
Set, review the work schedule
Discuss the rules:
Confidentiality: all participants need to be open and honest about how things really work and what
the issues. There will be no ramifications of the honesty
Process: Presentation and Q & A
2) Individual process reviews: Detailed review of the work practices with the people who operate the process - in
their work place.
Who: External participants (MRP II consultant, Supply Chain support, other);
Local site coordinator (optional), those who operate the process (to doers)
Where: in the workplace of those who operate the process
Objectives
Assess if work completed is truly Class A in practice
Provide assistance, guidance if there are gaps, issues etc. in the work
Process:
Answer questions about how they operate the process such as:
Tell me what you do
What are the inputs and outputs of your tasks in the process?
What do you do with these inputs?
What are the procedures the define what you do?
What are the metrics you track and use?
Who: MRP II Consultants to those who operate the process
Review current process metrics and action plans designed to move the process to Class A performance
levels. Provide guidance, assistance where possible. Who: MRP II consultant, Supply Chain support
personnel
Assess work practice vs. the MRP II principles and the Class A checklist. Highlight any potential issues,
gaps in the project plans.

Who: MRP II consultant, Supply Chain support personnel
Last revised: 12/12/97 Page 36
3) Final review session.
Who: External participants (MRP II consultant, Supply Chain support, other);
Local project team, local executive sponsor, other participants as desired
Where: Appropriate meeting room
Objectives
Review the results of the audit. Show the summary page of the Class A checklist and review the ratings
given.
Discuss suggestions for improvement or focus on remaining gaps.
Commit to the Class A 3 month review date if first FINAL AUDIT
Agree on action items as needed
Process: Presentation and Q & A
Last revised: 12/12/97 Page 37
Change Log
Revision Date: 12/12/97 New Version: January 1998 Previous Version: May 7, 1997
Section Details of Change
Re-format of the checklist to make it look neater and direct the scoring focus to the major
headings rather than the individual details.
Addition of a cover page to explain the checklist and the scoring definitions.
Placement of some best practices (e.g., some shipping vision elements, Theory of
Constraints, Cycle Time) in a must be evaluated for potential benefit category, to
lessen questions about whether we must do all best practices to be Class A.
More specific wording in some cases to reinforce specific rohm and Haas principles (e.g.,
S&OP plan horizon must be at least 18 mos) or R&H systems/ procedures which need to
be common (e.g., specifying Logs+ as the source of S&OP and BP demand/supply plans).
Clarification of metrics by moving all required metrics to sections G & H, with generic
formulas and some detailed descriptors, and removing all optional metrics to a separate
list in Appendix A.
An added description of the directional audit/pre-assessment/final assessment
processes, in Appendix B.
A3 BP Stress BP owned by S&OP Team and volumes are in Logs+
A4 Demand
Creation
Explain expected content of sales plans
B1 S&OP Specify S&OP focused on the future, horizon at least 18 mos,
Specify demand/supply data are in Logs+
Insert new section on product costs
B2 Demand
Forecasting
Clarify forecasting process
Specify fcst data in Logs+ at product/package/customer shipto
Specify accuracy feedback to Sales, with improvement targets
B4 DRP Stress Logs+ automation of warehouse replenishment
B5 Turbo Specify Logs+ for replenishment of turbo sites
B6 MPS Minor changes for clarity
B7 Capacity Stress buildup of capacity from individual realistic rates for items in MPS for a given unit
C1 External
Supply
Update terminology to fit current Purchasing Team wording
Stress Supplier Scheduling
C2 Internal
Supply
Stress that MPS drives auto-replenishment
C3 Transptn.
Planning
Use detailed Demand Fcst data to plan transportation
Some cleanup/simplification
D1, D2 Orders Specify sourcing table to map demand to supply source
Some cleanup
E1 Plant
Scheduling
Simplify, remove original channel specifics
Some cleanup
E2 mrp, Plant
Procurement
Move Data Quality to G so it is not lost in E2
Some cleanup
E3 Conversn Cleanup; moved Tolls here, better wording
F1 Shipping Clarify Shipping best practices have been evaluated
G, H Metrics Required metrics only, generic formulas, some descriptors
H1 OTD Separated metrics for Customer, DRP whses, Internal autoreplen
H2, H3 Fcst Metrics framework like latest Demand Management template
H4, H5 MPS Metrics framework like latest MPS template