Introduction 0:00:00.7:
Welcome everyone. We are in Supply Chain session right now and I'm very pleased to welcome to the stage, so Sam Brill is going to be talking about the Molex's transformation and IBP journey and then we're going to have Bob Honer join him from Anaplan to chat about that. So gentlemen, take it away.
Bob Honer: 0:00:22.0:
My special guest, Sam, with Molex, is going to be talking about it's one thing to see academically about IBP and the benefits and what it takes to be successful, but it's something else to talk to someone and get the wisdom of someone who has lived it, done it and maybe gone ahead of you in that path. So I'm excited about that. Sam, would you like to just say a little bit about you?
Sam Brill: 0:00:48.8:
Yes, so the wisdom part might be questionable though. So I've been working for AirBorn, now Molex, for about 17 years and I'm the director of - my title keeps changing, but now it's global sales and operations planning. We'll have fun and I appreciate you guys picking the better of the three sessions today!
Bob Honer 0:01:12.0:
Love it, I think this is going to be a good one too. We will see that we keep the titles updated as best we can, but just to level set, does anyone in the audience now know what IBP is? We used to call this S&OP back in the day, but I like to think that the technology, the capability, finally lives up to the hype, lives up to the expectation. That's not a knock, when Ollie White came up with the idea of connecting demand planning, supply planning, all of these functions, we didn't have the level of capability that we had today. In fact, the Apple IIe was still the pinnacle of computing technology, so we've come a long way since then. The questions that IBP is attempting to solve have stayed the same, it's all about knocking down these siloes and acknowledging the fact that supply chain decisions don't take place in a vacuum. In fact, all supply chain decisions ultimately end up being financial decisions, it all comes back to finance, doesn't it? So while the challenges have stayed the same, the technology, the capability and I would even say the expectation hasn't. I mean, Sam, can you imagine when Ollie White was talking about a monthly IBP cadence, can you imagine if we waited until once-a-month to match demand with supply?
Sam Brill 0:02:44.5:
I mean that's a little out of order on what we planned, but just to introduce it. So we started our IBP journey about 11 years ago, right? Oliver White was our consultant originally when we set it up, right? Just going a little bit on our journey and then we'll get back on the program. So maybe it's about three-and-a-half years ago when we went to Anaplan, right? Basically, we were prior to Anaplan - we were doing our IBP process on a combination of Excel spreadsheets and a very old Oliver White database program, right? Basically, that program wasn't brand new in 2014, when we first had it, right? So it basically wasn't going to be supported anymore and it certainly wasn't meeting our needs, so that's when we started looking for a different platform. We'll get into this a little bit later, but Oliver White, one of their big pitches was it's not about the tool, it's about the process, right?
Sam Brill 0:03:55.4:
You don't know until you really get in there and once you have the tool, it really opens things up, and we can get into some of that a little bit later, Bob.
Bob Honer 0:04:03.3:
I love that point and Ollie White has always been methodology-focused and tool agnostic and, yes, to the point that you made, that tool was not a 2000 tool, that tool goes back to the '90s. So absolutely a little bit of mileage on that. Want to get into all of that, but could you just take the audience back a step and just to those who don't know Molex as a company, could you just give us a little bit of foundational info about the company and what they do?
Sam Brill 0:04:32.9:
Sure, Molex is a global electronics manufacturer, their big products would be connectors, cable harness, sensors. They service a lot of different industries. Automative, consumer, I'm supposed to have a fun fact, I learned that this morning. So if you have an iPhone the connector for your charger, this is a Molex connector inside there. So data comms, pretty much every industry you could think of. The one industry that they had very little bit of a footprint was aerospace and defense, and we'll talk a little bit about that in a minute.
Bob Honer 0:05:11.9:
Well, that's an excellent segue into things now, I know who to talk to about the fact that my USB-C connection is not functioning, but that could be my fault a little bit. Yes, so you mentioned what Molex does, but then you also mentioned something quite exciting, the defense space. So you came to Molex via an acquisition, can you tell us a little bit about that?
Sam Brill 0:05:37.5:
Sure, so prior to the acquisition we were AirBorn, right? We were very much a mid-market company, with sales, call it about $250 million, and Molex is a $14 billion company, which is part of whatever $200 billion conglomerate, right? We were a 100 per cent employee-owned company too, so it was a big change for us, but we, again, prior to the acquisition we had Anaplan in place.
Bob Honer 0:06:09.2:
Fantastic, and I've laid out some of the segments in which you compete in and this doesn't look like just connections and those types of things, this looks like some heavy-duty stuff.
Sam Brill 0:06:21.7:
Correct. So again, AirBorn primarily played in what we would call aerospace and defense, right? So our products are probably different from a lot of - we're not consumer and we're not retail, right? So heavily military program driven or satellites or even it could be like Airbus or Boeing, where they're doing very large annual buys. So definitely a different demand stream then probably a lot of you guys are used to. Different than Molex, frankly, most of all.
Bob Honer 0:06:58.9:
Absolutely, and you began talked about defense and the logistics that go into that, we'd moved well away of like iPhones and CPG type goods and the things that we typically think of with supply chain. Can you tell us a little bit about the unique challenges in that space and also maybe tie that into IBP? What was the need that IBP was solving within that defense space specifically?
Sam Brill 0:07:24.7:
Sure, so of course, we're mission critical, right? So even you talk very recently, so there was a war in the Middle East, right? In terms of interceptors to hit all of the missiles that were coming into Israel and to the US ships too, off of the coast of Yemen, right? So we were running out of interceptors, right? So it's very mission critical, hey, we need to deliver quite a few products that go into these interceptors, right? Again, we have to be on time, right? On-time delivery, quality obviously we very important, but lives depend on us, that's always been our AirBorn tagline. So that's very important to us.
Bob Honer 0:08:13.1:
Boy, I mean as people in the supply chain space, it gives us a whole new way of looking at just - I mean we've always thought supply chain was a key capability, but it's one thing if I don't have my Tide on the shelf, it's something else if people in the field don't have the missiles and the capabilities that they need to be successful on the battlefield. I mean this gives a whole new way of looking at how impactful this is.
Sam Brill 0:08:41.3:
Sure, and, of course, we're a for-profit corporation, right? So not only is it that, right? Like any other corporation, your financial metrics are really important, right? Your profit and loss, your EBITDA, everything else very critical. So we're managing that too and that's also what we were trying to solve through IBP.
Bob Honer 0:09:07.1:
I'd like to put you on the spot a little bit, and you can tell me you don't have one, that's fine too, do you have any examples, any tales of the field of how something within Anaplan and within the IBP planning cycle was able to get you out of a jam? Just help in some way in planning?
Sam Brill 0:09:29.7:
Again, I mean we were taught really, this is from Oliver White, a boring process is a good process, right? We want to actually not have a lot of - we don't want to have a lot of excitement in our IBP process, right? I think we're really successful because my kids tell me I have the most boring job in the world. It's like anything else, there are events that occur, right? Mainly conflicts in the world, right? That definitely change the way we're going to plan, right? One thing that we are so much better at than even really over the last, say, three-and-a-half years since we had Anaplan, is giving the supply chain good visibility on what's coming in that - I'm going to call it the 4 to 12-month time window, right? So we've gotten better so that we can have the resources in place, so we can, again, improve our on-time delivery, improve what our customers are seeing and grow the company.
Bob Honer 0:10:37.7:
I love that and I love the kids think that you've got the most mundane job. The longest time my kids thought I might have been a pilot because I was on flights so often and, do you know what? I didn't do anything to dispel that, I just went with that one, but now they know that I'm a lot less cool than a pilot. When we talk about IBP and you began the discussion today a little bit about this, I think it would be meaningful to people and insightful to people, can you tell us a little bit about how you began down that path and some of the steps that you took along the way?
Sam Brill 0:11:14.0:
Sure. So again, in terms of IBP and, again, Oliver White came in here, consultants, and we had a mature process and it went on for, again, about we call it seven years prior to Anaplan, right? Then, like I said, we needed a different solution and that's when we originally looked at the Gardner whatever you call it diagram and Anaplan was one of the top three solutions and we ended up picking Anaplan, right? We were probably a lot different and I'll probably get in trouble for saying this, right? We were a mid-market company at the time, right? We were not a big company, right? So we did not use a partner, we did it ourselves, right? So we implemented ourselves. We had demand and supply planning up in two months, and that includes learning how to do all the coding. So we were able to deploy very quickly in there. So part of it, you know what you know when you start, right? Having no experience within Anaplan, and it's different to what I know today, right? Maybe I didn't have the vision of how it was going to expand because, again, we started off with what would be demand planning and supply planning on that honeycomb, right?
Sam Brill 0:12:37.0:
Once you have this tool people are not hesitant, the stakeholders are not hesitant to ask for more, okay? [?Pernati 0:12:45.4], who's here, right, just is a good example. So last MBR, right, our VP of finance said, 'Hey, can you trend the P&L out? Can you do an application inside of Anaplan for that?' We were like, 'Yes,' and Pernati had it done the next day, all right? So that's like how we've grown, right? People ask for something and we deliver it out there. So yes.
Bob Honer 0:13:16.9:
Fantastic, so much within those comments that you've just made. Even as a technology company like Anaplan, we often talk about the legs of an IBP stool and we usually put the methodology as the top, the people as the next, the ones to enable the methodology, and then the tool last to make it all possible. You make a good point, that the tool, as well, is a key component within that.
Sam Brill 0:13:42.2:
So here's what we learned, right? So again, you know what you know, right? So Oliver White, again, they said, 'Hey, it's not about the tool, it's about the process.' When you have a tool, right, that tells a story, right, it makes it much clearer for all the stakeholders. They understand here's what our problems are, here's what strategies we need to develop, right? The other thing that Anaplan allowed us to do is have connected planning, right? So now when we talk about the supply planning, each one of our site directors goes in there and changes all their assumptions, so it'll change the RCCP, resource whatever constraint plan, whatever it's called, each cycle based on how the demand plan changes, right? So having that connected planning works really well for us. The other thing that Anaplan really helped us do, okay, is - and I don't know how it works for you guys, right? IBP is supposed to be whatever, a 4 to 24-month process, right? That's, again, if you go back to the Oliver White thing. Well, to be honest, for the first seven years the big focus was on months one through three, okay? The senior management, how are we going to do this month?
Sam Brill 0:15:06.2:
AirBorn very much cashflow, very critically, probably almost the most critical, right? Are we going to be able to pay our bills this year or this month? Are we going to be able to make payroll? Okay? So they were almost very, very focused on that one through three, right? Well, we were able to, within Anaplan, develop a separate process that we call revenue sync. That revenue sync is just months one through three, it's separate inside of Anaplan, it's total connected planning from all the different operations and we have currently nine manufacturing sites, right? We go through that every week, once a week we go through that and that keeps the focus on one through three in that conversation. Then when we do our regular IBP we're able to look at four plus months, right? That's something that I learned really in the last three-and-a-half years, that really has taken our process up a significant level. Again, something that we wouldn't have been able to implement without Anaplan.
Bob Honer 0:16:04.6:
You said something awfully insightful and I wanted to see that it didn't get lost. You talked about Anaplan not just on the data and quantifying the data, but on being able to use the data to tell a tale, to tell a message, and I think that's so impactful. I saw someone else say something about data without intelligence is noise and I think you just encapsulated that exactly.
Sam Brill 0:16:28.0:
Yes, it's kind of like you take an example, right? So if you're the site director over a given site, right, and everybody's pounding you on your costs, right? The forecasts are saying in six months you're going to need to increase by 20 per cent, so you're going to need to start buying equipment and hiring people now so that in six months you're ready. Sure Sam, right? My boss is beating me up. Then when they see it, right? They see the data in front of them. Oh, I better get going, right? Then I'll give Pernati another plug, right? So [?MEYP 0:17:04.8], right? We didn't really have a good way to do MEYP, especially at the levels that we do now. So now inside of Anaplan we track our MEYP, right? We're at the six-month mark where it's six per cent, so we're crazy accuracy, crazy, crazy accurate. So we've built this incredible credibility, right? From all the stakeholders. That, hey, if they're saying there's an upturn, we believe them, we're going to react now.
Bob Honer 0:17:31.1:
Boy, so much good stuff. I want to make one last point and then we'll move on. You've given a couple of shoutouts today to [unclear word 0:17:37.7]…
Sam Brill 0:17:37.7:
Pernati.
Bob Honer 0:17:37.7:
…and to you I wanted to mention, as well, Anaplan always talks about business owned, but what you've laid out, what you two have been able to do, and the team, by…
Sam Brill 0:17:51.0:
The team's two, by the way.
Bob Honer 0:17:52.8:
The team of two. I'm using the collective team. What you two have been able to do goes well beyond any sales pitch that we can give, well beyond any…
Sam Brill 0:18:02.3:
We're getting paid zero, by the way.
Bob Honer 0:18:04.7:
I did get you a coffee, I mean it was…
Sam Brill 0:18:08.3:
He bought me lunch!
Bob Honer 0:18:12.9:
What a testament to just the fact that it's not just sales speak, it's not just something that's intangible. I think that's a testament to both the commitment and skill that both of you had, but also the technology, as well. With that said, you've got a lot of specifics to this business and I know we can't get into all of them, but a lot of nuances. In the past I was, I'll say, lucky enough to deal with the DLA, the Defense Logistics Agency. So I know a little bit about those long lead times and about all of the things that go into that business model. Can you give us a feel of some of those complexities and what that was like to deal in that specific business?
Sam Brill 0:19:02.3:
Yes, I mean it's a different demand stream. At one point, I was the demand manager, right? So I just focused on the forecasting and I went to conferences about how to - learning how to plan demand. Again, it was very retail, consumer-focused. Well, if the weather is hotter, you need to bring in your summer clothes earlier, right? That's just not our business, right? So when we start a quarter, we have about 80 per cent of our backlog for that quarter in place. If I look out two quarters, I have about 40 per cent of a backlog in place. So when we do our forecasting, our backlog analysis is compared to prior periods and prior years, looking down the line at different products. It's a key factor in determining what our forecast is and we do that, of course, all inside of Anaplan. Again, that tells a great story to make our case believable when we're either forecasting up or forecasting down. The sales guys, right, so inside of Anaplan every month they put in what their expected booking forecast is, new orders, not when they're going to ship, but when they're going to book it, right?
Sam Brill 0:20:14.6:
So that's important data to us, right? Also in there, okay? Then the trends are important, right? Okay, if we see a product trending up or trending down there's other external factors, there's pricing and there's lead time and things like that in the industry. So we're looking at all three of those factors primarily to drive our forecast. Well, again, a little bit different and just a little bit more this is actually - I was just in supply chain at the time, right? We had put in something called Demand Solutions, right? To calculate the forecast, right? It was a horrible flop, right? It could never do it as accurately, even as we could with the Oliver White tool, back in the day.
Bob Honer 0:20:57.4:
So just to those who don't know, Demand Solutions is a company, it's owned by Logility, it's the Excel-based tool that they have to do supply chain planning, I guess I would say. So yes, with those long lead times, long buying cycles, what is the timeline that you've been doing IBP? It's got to be at least - how long out do you go within those IBP cycles?
Sam Brill 0:21:27.6:
Well, that's a good question too. So it varies, right? I would say at the longest period, to be honest, we're looking at about 18 months, probably the shortest is 12 months, maybe at the end of the year. So I'd say generally we're looking at 12 to 18 months. Now inside of Anaplan we also do five-year forecasting, as well, so we do that and the executives are making some decisions based on that five-year forecasting, right? In terms of capital and stuff like that. In terms of really running supply chain and ordering material and staff in, that's really in the 12 to 18-month window.
Bob Honer 0:22:07.1:
Okay. So just to align the audience, we began talking a little bit about IBP as a function, we then talked about the company and a little bit about that. We just dove into some of the unique complexities within the defense spending business. I just want to go back to the acquisition a little bit and you can tell me no, but my question is was Anaplan able to facilitate that acquisition? What I mean by that is the data, the connected data that Anaplan was able to supply, was that able to help within that?
Sam Brill 0:22:43.2:
There was definitely data that we pulled out of Anaplan to help support the acquisition, right? So particularly in the five-year planning, okay? So I wrote the acronym, but I don't remember what it's called anymore, but it's something called a CIM, right? I thought I'd remember it. Anyway, you have to put this thing called a CIM together, right? I guess it's like a prospective to potential people who want to buy your company, right? One section of that is a five-year plan, right? So CEO comes to me and says, 'Hey, we need to get the data out of Anaplan for a five-year plan.' We put it in there, and then during the acquisition process the potential companies who are buying you often want different data or they want to see it in different ways, sliced up differently. Particularly, it was the five-year data, they want to say, 'Okay, we want to see it by business segment.' So as it turns out, we were acquired by Molex mainly for what would be aerospace and defense, right? We did have some other segments, we did have a little bit of industrial and a little bit of medical, but they wanted to really see it broken out. Because, as it turns out, they were interested in the aerospace and defense portion.
Sam Brill 0:23:57.7:
So that was one way we were able to go into Anaplan and re-slice that five-year data, by business segment, right? Which is what they wanted to look at. They wanted to look at it some other ways, but that was the primary way that we used Anaplan to help sell the company.
Bob Honer 0:24:14.6:
So building on that, since the acquisition how has planning evolved and has Anaplan been able to give you some agility in that evolution?
Sam Brill 0:24:26.0:
Yes. So like I mentioned earlier, right? So AirBorn, as financial people they care about everything, right? Cash was king, right? That was the primary, probably, thing we were solving for, right? Making sure that as a 100 per cent employee-owned company, people retire, you have to pay them out their shares of stock and our stock had gone up over the years, right? So making sure we had enough cash at the end of the year to pay everybody who was leaving and make payroll. That was almost the primary thing that we were solving for, right? Molex's world is completely different, right? Their primary focus was profitability, okay? I'm going to give her another plug. So Pernati, one thing that she did right is build in the honeycomb the financial - there's two like financial blocks there, right? So basically inside of Anaplan we have the ability now to go by customer, by product, by manufacturing site, to manufacturing line, and look at the different profitability metrics inside of Anaplan for all that. So for example, now, a site, before it was like ship everything in the sink at the end of the month, right? Work overtime, do whatever you do to maximize revenue, okay?
Sam Brill 0:25:47.0:
Where now it's like, well, how profitable is that? I don't really want to work overtime for something I'm not making much money on, okay? I'm going to focus on if I need to drive profit I'm going to focus on these business segments. As a company, right, which, again, is very different. We are or have exited certain customers since the acquisition, we would never have done that as AirBorn, right? As long as it was making a penny we would have kept it, right? That's not - Molex is much more, hey, we would rather exit that customer and leave that capacity for more profitable business, so that helps drive that. That's done all in Anaplan. Probably did I miss something or did I forget? All right, guys.
Bob Honer 0:26:34.3:
Awesome. I think that goes back to what we said at the beginning, all supply chain decisions ultimately end up being financial decisions and it sounds like with Molex that's exactly where you've been working.
Sam Brill 0:26:45.3:
Sure, yes.
Bob Honer 0:26:47.6:
It's not done, the acquisition is done, but it continues to evolve. What next steps?
Sam Brill 0:26:54.4:
Well, that's a great question, right? So about one week ago we announced the acquisition of Smiths Interconnect. So Smiths Interconnect will be - is bigger than AirBorn, about one-and-a-half times bigger than AirBorn. It's coming into our division and we're going to run it, right? So year one, we're acquired and we're moving over. Year two, we're going to grow by 1.5 times. So let's say we're $300 million now, we're going to be very shortly a $1 billion division, okay? Very, very quickly, right? So that's number one, right? Then other exciting thing for us, so we'll have to see, right, is there's a buzz about Anaplan. In terms of Molex, right, we're the only division with it, but we have a much better sales and operation planning process, or IBP process, than the rest of Molex, okay? So there's a lot of interest in IBP or Anaplan and what we're doing for the rest of Molex. I didn't even tell you guys this, but just my boss told me, hey, coke is now interested too. So who knows? It's going to be an exciting year anyway for us and where we go down the roadmap.
Sam Brill 0:28:23.6:
We don't have Polaris at this moment in time, right? Again, we were going with a very low-cost model of implementing and using Anaplan, but I think if we're growing that much we're probably going to have to move that way, we'll see, that's next.
Bob Honer 0:28:39.1:
How exciting and what good publicity to have and I like when you talk about digesting these acquisitions, flexibility and scalability will be foundational to those things.
Sam Brill 0:28:52.0:
Yes, I don't have much hair left though.
Bob Honer 0:28:54.3:
That's not Anaplan's fault, let's not confuse. So this has been awesome, I've enjoyed the discussion, so much valuable info about the company and about what you faced. I'd like to now make it tangible to the audience. We don't often get to go back and do things a second time. If you got to go back and do things again, what advice would you give? I know we most likely don't have enough time to do it.
Sam Brill 0:29:21.3:
You only know what you know, right? When you start. So you can be self-critical and, again, it's a big elephant, right? So I think you said boil the ocean or something this morning, say how do you eat the elephant, right? One bite at a time. So I think that's it, how do you eat the elephant? Do what you do. We've learned a lot, right, in terms of Anaplan, right? There's things that there's no way I would have done, I wouldn't have done it the same way, right? So we didn't have a separate data hub, right? We just had - I call it like sprawl, right? So we just had this one model with our data and sprawl and sprawl and sprawl until it got to 130 and then, okay, we need to move into another. We need to have another one, right? Now I'm asking Pernati, okay, let's redo things and do it right, but you still have to run your business, right? So I've asked her to build that data hub and move some of those honeycombs into separate models right now.
Sam Brill 0:30:21.7:
So I mean, again, definitely wouldn't have done it the same way and did we do things perfectly? Probably not, right? Just this is way back in my career, prior to working for AirBorn I worked for another company and we had some consultants who came in from Japan, I forget what the process is called. Almost if you would picture this older Japanese guru guy, he came in there and he didn't speak any English, right? His one thing, and it stuck with me for my career, was, 'Just do it.' Before Nike, probably, right? Just do it, right? That would be the advice, just get in there and do it.
Bob Honer 0:31:06.8:
Yes, I think that's valuable. Sometimes we get so caught up on having just the cleanest data, having all the data, having all the pieces in place. You know what? If we wait on those things we won't do anything. So I like that idea of just do it, I think that might have some legs to it. Something you and I talked about, too, that I just want the audience to know because I think this is insightful too. You mentioned how out of the gate it's easy to focus on just the execution window and focusing on balancing demand and supply within that window. You've got to engage beyond that, you've got to be looking beyond that execution window, and I think that's something that we see a lot of, as well. People talk S&OP, they talk IBP, but they actually often just get hung up on demand and supply balancing, they don't get to that full level of IBP. I know we still want to get to Q&A, but I want to ask you the tough question now and you can be totally honest, even though this is an Anaplan event and I did buy you a beautiful lunch. A lunch, and buy I'm using subjectively. What advice would you give to people implementing Anaplan? What takeaways do you have on that side of things?
Sam Brill 0:32:26.8:
I mean it probably depends on your situation and how big you are, right? So I mean that's kind of a loaded question there, right? I would say it would vary, right? I think there's a solution whether you're a small company or a big company, right? I mean we heard from Chase today, right? They're probably not going to implement it the same way as a smaller company would, but I guess I would say is there's a solution for all of you. If you're a smaller company I don't think you need to be that afraid to do it yourself, right? To be honest. I don't think it's so hard, okay? There's probably a couple consultants in here that are shooting at me. Anyways, so I guess that would answer - I guess that's my answer to the question and that's not an easy question to answer.
Bob Honer 0:33:15.2:
Yes, it's not one size fits all, no doubt, but so insightful. Thank you giving us this insight today, I've enjoyed the discussion and I've enjoyed the discussions we've had leading up to today. One thing that's maybe changed since Sam has done this is we now have the IBP app and the application is also built on the Ollie White methodology that you talked about. So to people doing this today you could begin with a cookie cut type model, and the idea being nobody follows Ollie White exactly, as good as it is. We always make adaptations and changes based on the specific business needs. Being able to have the five key components of IBP planning available out of the box and then being able to just fine-tune those to the business I think could also be valuable to people beginning down this path today.
Sam Brill 0:34:16.6:
I'm going to help you out a little bit after saying that. So if we are expanding to the rest of Molex I'm probably going to move to the app way, because I think it's too much to - and our customization is probably going to be different than the other divisions inside of Molex, right? So probably going to push. If we implement to the rest of Molex we'll probably go to apps. To be honest, if the apps were available and were cost effective, right, at the time, I would have gone that way.
Bob Honer 0:34:50.8:
Makes sense, no need to invent the wheel. [Applause].