s&op a better way to run your business- eyeon solutions
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1 © 2014 Steelwedge Software, Inc. Confidential.
Single Line of Sight: Plan, Perform, Profit
S&OP: A Better Way to Run Your Business Best Practice S&OP Aligns People, Process and Technology
2 © 2014 Steelwedge Software, Inc. Confidential.
Speakers
Danny Smith, VP Industries
Steelwedge Software
Jan Veerman, Managing Partner
EyeOn Solutions
3 © 2014 Steelwedge Software, Inc. Confidential.
Agenda
• S&OP: Current State and Challenges
• Realizing the Business Value from S&OP
• A Call to Action
4 © 2014 Steelwedge Software, Inc. Confidential.
A Brief History & Review of S&OP
• S&OP: “a better way to run your business”
• Evolved out of early work in Material and Production Planning in the 1970s (by thoughts leaders like Oliver Wight, TF Wallace, others)
• Expanded to include Sales, other groups in 1980s
• Continually evolving - latest version rebranded as “Integrated Business Planning” (IBP) in 2000s
• Integrates Finance, R&D • Executive value (i.e. risk mitigation; “what if” simulations) • Extended to external processes
5 © 2014 Steelwedge Software, Inc. Confidential.
Great Results when Executives are Fully Engaged “How involved is your executive team?”
Closing the Gaps in S&OP Study 2013: CSCO Insights
6 © 2014 Steelwedge Software, Inc. Confidential.
S&OP Accelerates Performance “What kind of benefits is S&OP delivering?”
0% 10% 20% 30% 40% 50%
Forecast Accuracy Customer Satisfaction
Asset Utilization Inventory Value Order Fill Rate
Revenue Working Capital
Perfect Order Return on Assets
Gross Margin Inventory Turns
Substantial Overwelming Sales and Operations Planning Research Study 2006: Ventana Research
Most are NOT getting good results – why?
7 © 2014 Steelwedge Software, Inc. Confidential.
Reality: Most Execs Not Fully Engaged in S&OP Process “Does your executive team own the S&OP process?”
Closing the Gaps in S&OP Study 2013: CSCO Insights
Why aren’t executives
owning the S&OP process?
8 © 2014 Steelwedge Software, Inc. Confidential.
Most Efforts Not Supporting Executive Needs “Rate your S&OP capabilities”
16.7%
25.4%
29.4%
35.1%
45.0%
57.4%
55.7%
57.3%
54.2%
46.1%
25.9%
18.9%
13.4%
10.7%
8.9%
Integrated Supply/Demand
Integrated Financial Plans
Strategy Deployment
Strategic Initiatives
Scenario Planning
Low Medium High Still operations focused vs. an enabler for executive
decision making Closing the Gaps in S&OP Study 2013: CSCO Insights
9 © 2014 Steelwedge Software, Inc. Confidential.
Missing Big Opportunities “Rate your S&OP approach”
12.5% 70.8% 16.7% Focus
Backward Results In-Between Forward Planning
29.5% 65.2% 5.3% Strategic Perspective
Short Term Problem Solving In-Between Exploiting Opportunities
18.9% 67.8% 13.3% Approach to Results
Passive In-Between Actionable
Closing the Gaps in S&OP Study 2013: CSCO Insights Not delivering on
true potential
10 © 2014 Steelwedge Software, Inc. Confidential.
34.2%
25.7% 28.4%
46.7% 44.4%
50.2%
Hit Financial Targets Synch Operating Strategies Ensure Execution of Strategies
Current Benefits Future Desired
Executives Want More “Rate your current vs. desired capabilities”
Reality still a long way from the potential
Closing the Gaps in S&OP Study 2013: CSCO Insights
11 © 2014 Steelwedge Software, Inc. Confidential.
Gap between Best Practices & Current Situation “Rate your S&OP process” (maturity)
Closing the Gaps in S&OP Study 2013: CSCO Insights
32.2%
14.7%
8.4%
1.7%
Below Average
Only Adequate
Excellent
World Class
After 30+ years of S&OP only 10% rate themselves as Excellent or World-Class
12 © 2014 Steelwedge Software, Inc. Confidential.
Agenda
• S&OP: Current State and Challenges
• Realizing the Business Value from S&OP
• A Call to Action
13 © 2014 Steelwedge Software, Inc. Confidential.
Key for Delivering Results: Addressing All S&OP Critical Success Factors
People (Collaborate)
Process (Automate/Monitor)
Technology/Data (Manage)
14 © 2014 Steelwedge Software, Inc. Confidential.
Blocking S&OP Results: Gaps with Existing Systems “How satisfied are you with your current systems capabilities?”
Source: Executive Sales & Operations Planning: Process & Technology Strategies. Survey of 380 companies. Aberdeen Group 2007+
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Demand Supply Matching
What if Analysis
S&OP Plan Quality & Metrics
Role Based
Alerts & Exceptions
Fully Meets Needs Doesn't Fully Meet Needs
15 © 2014 Steelwedge Software, Inc. Confidential.
Best Practice S&OP Aligns People, Process & Systems
“We continue to look at S&OP as an aspect of business that needs terrific improvement…It’s hard to argue that this shouldn’t be a central piece of management software”
–Rob Kugel, Ventana Research
16 © 2014 Steelwedge Software, Inc. Confidential.
Gap between Best Practices & Current Situation “What tools do you use for S&OP?”
Closing the Gaps in S&OP Study 2013: CSCO Insights
83% still using spreadsheets or
limited functional-silo tools
17 © 2014 Steelwedge Software, Inc. Confidential.
Industry Data
S&OP
Ground Reality: the Difficulties of Supporting the Process
Marketing
Operations
Finance
Consolidation Review, Overrides Consensus Process
Pre-ES&OP
Sales
Manual
Complex
Security Risk
Not Scalable
Does this Give Executives an Agile Decision Making Process?
18 © 2014 Steelwedge Software, Inc. Confidential.
People, Process & Systems Together Enable and Sustain S&OP Adoption & Values
Time
L1
L2
L3
L4
“Companies can have a hard time getting past basic levels of S&OP without technologies like Steelwedge to support the process” - Tim Payne, Gartner VP of Supply Chain Analysis
Q1 Q2 Q3
SW Powered S&OP
Q4
Valu
e
Accelerated Time to Value
Step Change Maturity & Performance
Avoid Process Failure
19 © 2014 Steelwedge Software, Inc. Confidential.
Agenda
• S&OP: Current State and Challenges
• Realizing the Business Value from S&OP
• A Call to Action
20 © 2014 Steelwedge Software, Inc. Confidential.
Next Steps
• Understand your goals for S&OP • Translation mechanism between strategic objectives and operations • Enforcement mechanism to deliver results • Unifying mechanism to have all functions “march in the same direction”
• Assess your maturity • People • Process
• Assess your technology support • Cross functional platform for collaboration • Inclusiveness: easy adoption
21 © 2014 Steelwedge Software, Inc. Confidential.
Crawl – Walk – Run Approach
• Identify gaps in people, process and systems
• Develop plans to close them
• Key to success is incremental value
• Start with quick win as phase 1 & foundation
• Expand the roll-out adding value as you go
22 © 2014 Steelwedge Software, Inc. Confidential.
Who are we?
40 Specialists in realizing forecasting and planning improvements
• Focus on design and implementation
• System independent
• Line management experience and university educated
• Cross functional & hands-on mentality
• Proven track records in interim management
• Industry focus; industrial companies, its
suppliers and customers
• Network facilitator
• Deliver concrete projects with a short throughput time (max. 100 days) and clear deliverables.
23 © 2014 Steelwedge Software, Inc. Confidential.
EyeOn offering
Research & Publications
Consulting
Expert Sessions / Idea Labs
Benchmarks
Teaching Interim
…
Outsourcing
Industry Networks
4 5
6
e 1
2 3
24 © 2014 Steelwedge Software, Inc. Confidential.
Selection of customers
High Tech Food / FMCG Process Life Science Zorg
Other
25 © 2014 Steelwedge Software, Inc. Confidential.
Mythe: It is not about predicting the future..
• “I think there is a world-market for about five computers” (Thomas J. Watson (IBM Chairman), 1943)
• “The worldwide demand for automotives will not surpass 1 million, due to the lack of
qualified chauffeurs” (Gottlieb Daimler, 1901)
• “If I had asked people what they have wanted, they would have said faster horses” (Henri Ford, 1913)
• There are two sort of forecasts: Lucky or Wrong (Freek Aertsen, 1995)
26 © 2014 Steelwedge Software, Inc. Confidential.
The objective is to enable high quality decision making!!!
27 © 2014 Steelwedge Software, Inc. Confidential.
S&OP the cure for all diseases?
GDP$growth$S&OP$publica5ons$
28 © 2014 Steelwedge Software, Inc. Confidential.
Most Companies Not Doing “Best Practices” S&OP
Percent of respondents running S&OP process without input from the following departments
Percent of respondents conducting periodic S&OP process without the following steps
Source: “Recession Survival Kit; cross-industry survey conducted for Supply Chain Management Review, on behalf of Oracle and IBM, by Reed Business Information; February, 2009. Response to question: “Which factors will enable your organization to achieve your primary business goal?” n = 537 responses.
36%
47%
48%
Sales
Finance
Manufacturing
44%
45%
47%
66%
66%
Demand Planning
Inventory Planning
Supply Planning
Supply / Demand Match
Performance Review
29 © 2014 Steelwedge Software, Inc. Confidential.
Benefits to be expected from S&OP
30%
32%
32%
34%
36%
38%
42%
50%
57%
59%
Improvements in the perfect order
Transporta=on and warehouse management
Capital planning and asset management
Improving new product launch
Determining procurement requirements
Determining outsourced manufacturing
Improving asset u=liza=on
Reduc=on of inventory
Improving forecast accuracy
Increasing revenue
Source: Supply Chain Insights
30 © 2014 Steelwedge Software, Inc. Confidential.
DEMAND SUPPLY
Stock
Stock Levels
Forecast Accuracy
Factory Performance (CLIP / RLIP / LAP)
Service Level (On Time In Full)
1 2
3
4
4 most important performance indicators S&OP process
31 © 2014 Steelwedge Software, Inc. Confidential.
Trends and movements in planning: Technology driven
32 © 2014 Steelwedge Software, Inc. Confidential.
Large variety in Planning tools
• Traditional ERP vendors • Operational focus • Rigid
• Software as a Service (Saas) solutions • Specific solutions • Agile
• S&OP solutions
33 © 2014 Steelwedge Software, Inc. Confidential.
Key Learnings S&OP Implementations
• Old school ERP implementations do not fit business requirements
• Environment is changing fast à S&OP process + platform need to be agile
• Think big, act small
• Short implementation cycles (25 – 50 days)
• SaaS Planning tools able to support S&OP process
• Master data management / data quality
• Involve business as soon as possible
• Maintenance of tool by business, not IT
34 © 2014 Steelwedge Software, Inc. Confidential.
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