How can you make process improvements easier to realise?
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The document outlines Sony Europe's process improvement journey, highlighting the need for legal entity restructuring, standardization, and outsourcing to enhance efficiency and reduce costs. Key steps include defining standardized processes, improving communication across teams, and implementing strict change control measures. It concludes with a reflection on the challenges faced, achievements thus far, and ongoing initiatives to further develop their processes and cost structures.
How can you make process improvements easier to realise?
- 1. How can you make process improvements easier to realise? Jan Fonfara Sony Europe
- 2. Agenda a. Sony & Sony Europe b. Baseline c. Target d. Solution e. Challenges f. Journey g. Achievement h. What If i. Still to Do j. Q&A
- 3. Sony & Sony Europe Sony • app 65 Bill. EUR sales worldwide • app. 165k employees • Founded in 1946 by Masaru Ibuka & Akio Morita Sony Europe: • Distribution of Consumer and Professional Electronics across Europe (7.5 Bill EUR external sales) • Development and manufacturing of Professional Electronic products • Covering every European country through 27 branch offices • app 5k employees
- 4. Baseline As Sony Europe was Legal Entity Restructuring • 26 legal entities across Europe SNORD 1 S/CIS • Independent local finance functions with SNORD S/CIS regional headquarter coordinating 1 1 4 SUK SBNL SPOL 1 SUK SBNL 2 2 SDL SDL SPOL 1 S/UA SCZE 1 SCZE S/UA 1 SLVK 1 SCH SLVK • 570 Finance employees (estimated..) SFR SCH SOA SHUN SOA SFR 1 1 SITA 1 1 SHUN SOEM SITA SPOR 1 1 SPO SOCE 1 SESP R SESP 1 STURK S/TURK SHEL STURK S/TURK 1 1 • No outsourcing SHEL 1 1 2010 TODAY TOMORROW Sony Europe Electronics • Overlapping functions (local, regional, • Main Co in UK 42 SAP company= 26 different legal entities codes sub-regional) • Countries as branches of the Main Co • S/CIS, S/TUR not in scope • Limited process standardisation • Lack of transparency, difficult to compare entities • Unsustainable cost structure accelerated by unfavourable market environment
- 5. Baseline The Impacts • “Controllers controlling the controllers” • Long budgeting process (bottom-up – top-down etc.) lasting 3 months • Re-budgeting process half yearly • Discussion about intra-SEU transfer prices • High effort for governance (e.g. SOX) • Lack of actual control • Relying on the middle (e.g. FD of local organisation) • (partially) meaningless KPI’s • Inwards focus • Finance not seen as part of the business
- 6. Target Sony Europe Vision Customer focus / Our Purpose Competitive cost structure Finance to deliver value Flexible Organisation Through Simplification Standardisation
- 7. Target The Solution Legal Entity Restructuring 1 legal entity 1 standardised branch per country SNORD 1 S/CIS SNORD S/CIS 1 1 1 SAP Company Code for 4Europe SBNL 1 SUK SUK SBNL SPOL 2 2 SDL SDL SPOL 1 S/UA SCZE 1 SCZE S/UA SFR SCH 1 SLVK 1 SCH SLVK SOA SHUN SFR SOA 1 1 SITA 1 1 SHUN SOEM SITA 1 Standard Process used (unless TLS) 1 SPOR 1 SESP 1 SPO R SOCE SESP 1 STURK S/TURK SHEL STURK S/TURK 1 SHEL 1 1 1 Centralised process ownership TODAY 2011 TOMORROW Outsource all processing (PTP, OTC, RTR) Sony Europe Electronics = • Main Co in UK • Countries as branches of the Main Co 26 different legal entities • S/CIS, S/TUR not in scope
- 8. Challenges Transformation of process, systems and ways of working in short period of time Simultaneous standardisation and outsourcing of processes Moving from local to central decision making and responsibility Cost savings already required in first year (2011) and fully to be realised in 2012 (Finance costs -30% vs. base) Massive challenges and very short timelines required a new and systematic approach
- 9. Journey Key steps 1. Define standard processes fast and log them in a flexible, easy to understand system 2. Preventing the spread of outdated off-line process maps (Visio, PowerPoint etc.) 3. Enable communication between central, local and outsourced teams / see and talk about the common truth across all 26 Sony locations and 2 outsource locations (Pune and Bucharest) 4. Ensure changes to processes are controlled 5. Define targets (KPI’s) and start monitoring Decision to go with Nimbus as a tool and Nimbus as a partner for helping us create our process documentation
- 10. Journey Step 1 • Define standard processes fast and log them in a flexible, easy to understand system • Process experts, SAP solution architect and future Process Owner in workshops to define processes. Facilitated by Nimbus Process Author • Build Sony Europe process framework (connecting the processes) • Decide which parts are to be outsourced
- 11. Journey Step 2 • Preventing the spread of outdated off-line process maps (Visio, PowerPoint etc.) • Project to include previous process documentation (e.g. SOX) in Nimbus • Declaring Nimbus as mandatory • Roll-out of Core Process Map (Nimbus) across key stakeholders • Integrating of existing training material (e.g. System task guides, work instructions) Process / Risk / Control “Commitment to the Basics” • Single Global Process Owner for every Ownership process • Standardised process across Sony Electronics Simplicity • All processes documented in a single tool Transparency (Nimbus) • Any change or local variation must go through a strictly governed change control process Control • Using the standard process is mandatory 2011 Sony Corporation
- 12. Journey Step 3 • Enable communication between central, local and outsourced teams / see and talk about the common truth across all 26 Sony locations and 2 outsource locations (Pune and Bucharest) • Create Sony me@work incl. landing page and defined process areas • Roll-out across Sony Europe Finance community including outsourcer • me@work is the only accepted documentation to be used as reference for outsourced tasks
- 13. Journey Step 4 • Ensure changes to processes are controlled • Implement a Change Request process including workflow, review procedure, decision making body and escalation • Include different stakeholders (e.g. IS, Compliance) as changes might need their support • Enforce the standard process (if something is incorrect CR route still needs to be followed) European Requester CAFÉ Approval Implementation Process Owner
- 14. Journey Step 5 1. Define targets (KPI’s), start monitoring and improving • Developing the KPI structure and ensure they reflect clear process responsibilities (e.g. Outsourcer – Sony) • Daily reports for driving process execution • Monthly report for KPI and SLA reporting in order to drive further efficiency 7000 6341 6090 5908 5908 5908 5974 5968 5592 6000 5000 4000 3000 2000 1000 0 29 01 02 03 04 05 06 07 Untouched To be deleted SONY APW Items WNS APW items Return to vendor APW items Manual approval required by Sony Manually approved, to be posted by WNS SONY AP2 Items (old SAP Workflow) Closing Balance
- 15. Achievement So far.... • Processes are truly standardised and fully outsourced AP Headcount 2010 2011 • A new operating model is Sony 69 3 established Outsourced 0 59 • Business has not been disrupted AR and Credit Control • Central process and delivery HC ownership 2010 2011 2012 Sony 95 43 35 • Local finance teams being Outsourced 0 53 60 transformed and focus on credit risk and business vs. 2010 2011 2012 partnering Finance cost -15% -30% • Organisation is flexible and Sony Finance HC -32% -52% focussed
- 16. What if.. ..we would not have done it? • Market environment has changed significantly, decline in most European CE markets / “LCD hangover” • Margins and profitability are under even higher pressure • Significant disruptions due to natural disasters (Fukushima, Thailand flooding) • Significant decline in European CE markets • Sony Consumer Products (global) -19% (LC) Dec YTD
- 17. Still to do We are just getting started.. • Using the KPI’s for our improvement projects • Moving me@work (Nimbus) usage to a new level • Integrating KPI reporting • Integrating further SOX evidence and testing documentation • Acknowledged best practice across Sony – Utilising this advantage • ...
- 18. Q&A