best of the best s&op conference

www.tfwallace.comTom Wallace & Bob Stahl

Best of the BestBest of the BestS&OP ConferenceS&OP ConferenceBest of the BestBest of the Best

S&OP ConferenceS&OP Conference

First General Session

SALES & OPERATIONS PLANNING: STRUCTURE, PROCESS, BENEFITS

Panelists: Amy Mansfield Joe Shedlawski Terry Finnegan

Presenter/Moderator: Tom Wallace

Amy MansfieldV&M STAR

Production Planning Manager

V&M STARVallourec & Mannesmann Tubes

•North America's leading producer of seamless casing•Annual Capacity 500,000 metric tons finished product

•1st Executive S&OP Meeting, January 2006

Certifications: API 5CT, API 5L, OSHAS 18001, ISO 9001, ISO 14001

Products and Customers

•Oil Country Tubular Goods, Line and Standard Pipe, Coupling Stock and Mechanical Tube

•100% Make-to-Order

•Sales Channels: 100% Distribution

•Key End Users: Devon, Exxonmobil, Chesapeake, Applied Drilling, El Paso

Joe Shedlawski, CPIMJoe Shedlawski, CPIM

n Wyeth Consumer Healthcare

n Principal, Commercial Operations

n Past President of APICS (2007)

Wyeth Consumer HealthcareWyeth Consumer Healthcare

•Headquartered in Madison, NJ

•Global marketer and manufacturer of over-the-counter health care products-analgesics, nutritionals, respiratory, topicals

•$2.7 Billion global sales

•First Sales and Operations Planning implementation-1992-Lederle Consumer Healthcare-led by Joe Shedlawski

•One of the world’s top 5 consumer healthcare companies with several top market share brands

Products and CustomersProducts and Customers

•Major Products: Advil, Alavert, Caltrate, Centrum, Chapstick, Dimetapp, Robitussin

•70% Make-to-Stock

•30% Promotional Pack or Custom Display

•Key Customers: Wal-mart, Walgreens,CVS, Costco, Target, Rite Aid, Kroger

(Sales Channel: Distribution Centers

Terry FinneganImagePoint

Senior Business Manager

•Largest provider of retail exterior image products and services

•Headquarters in Knoxville, TN

•Production facilities in Florence, KY and Columbia, SC

•$200M in annual sales

•Started ES&OP May 2007

ImagePoint

•Products: signs, lettersets, electronic message centers, building elements, fascia systems, menuboards

•Services: surveys, installation, maintenance, project management, conceptual art, and engineering

•100% Make-to-Order

•Key customers: McDonalds, GM, Honda, Nissan, Ford, Chrysler, Lexus, Chase, Wachovia, Wells Fargo, Rite Aid, Fed. Express, Sunoco

•Sales channels: direct to Corporate clients

Products and Customers


The Four FundamentalsThe Four FundamentalsThe Four FundamentalsThe Four Fundamentals

Demand Supply

Volume

Mix

•How Much?•Rates•The Big Picture•Product Families•Strategy/Policy/Risk•Monthly/18 Months+•Top Management

•Which Ones?•Timing/Sequence•The Details•Individual Products, SKUS, Customer Orders•Tactics/Execution•Weekly/Daily 1-3 Mos•Middle Management


The Old TerminologyThe Old TerminologyThe Old TerminologyThe Old Terminology

Demand Supply

Volume

Mix

Demand Planning/Forecasting

Supply (Capacity) Planning

Sales & Operations Planning

bodell

I think the key thing to hit is "what is Executive S&OP"? Should we have some bullet points somewhere that give some basic description? And can we link this back to some key points:?1) This is about Executive" Decision Making"2) This is about" Business Performance" (not just demand/supply balancing)3) This is not "detailed execution review"


Sales & Operations PlanningSales & Operations PlanningSales & Operations PlanningSales & Operations Planning

Demand Supply

Volume

Mix

Master SchedulingSupplier and Plant Scheduling

Distribution Scheduling




““Morphed” TerminologyMorphed” Terminology

bodell



Sales & Operations PlanningSales & Operations PlanningSales & Operations PlanningSales & Operations Planning

Demand Supply

Volume

Mix






bodell



Sales & Operations PlanningNew Terminology

Sales & Operations PlanningNew Terminology

Demand Supply

Volume

Mix





????????

bodell



Sales & Operations PlanningSales & Operations PlanningNew TerminologyNew Terminology

Sales & Operations PlanningSales & Operations PlanningNew TerminologyNew Terminology

Demand Supply

Volume

Mix

Executive S&OP





bodell



The 5-Step Executive S&OP ProcessThe 5-Step Executive S&OP Process

Decisions &Updated

Game Plan

Step 1Data

Gathering

Step 2DemandPlanning

Step 3Supply

Planning

Step 4Pre-

Meeting

Step 5Exec

Meeting


Conference PointerConference PointerConference PointerConference Pointer

The Five-Step Process

Dean Smetana, VP, Sanford/Sharpie

Bill Zimmerman, Manager, Sanford/Sharpie

10:00 Thursday – Level I



Step 1Data

GatheringActual

Demand, Supply, Inventory, & Backlog +Statistical Forecasts

and Worksheets

Management Forecast1st-pass spreadsheets

Step 2DemandPlanning



Forecasting and

Demand Planning

Scott Harrison, VP, Valor Brands




The Demand Management Game

Robert Burrows, Principal, On-Point Group

9:45 Friday– Level I

(double session)



Step 1Data

GatheringActual

Demand, Supply, Inventory, & Backlog +Statistical Forecasts

and Worksheets


Resource Requirements PlanCapacity Constraints

2nd-pass spreadsheetsStep 2

DemandPlanning

Step 3Supply

Planning


Conference PointerPointerConference PointerPointer

Supply Planning

Joe Shedlawski, Principal, Wyeth




Decisions &Updated

Game Plan

Decisions, Recommendations,

Scenarios, & Agenda for Exec Meeting

Step 1Data

Gathering

End of Month

Actual Demand, Supply,

Inventory, & Backlog +Statistical Forecasts

and Worksheets




DemandPlanning

Step 3Supply

Planning

Step 4Pre-

Meeting

Step 5Exec

Meeting



How to Conduct the

Pre-Meeting and Exec Meeting

Brian Harlan, Director

Johnsonville Sausage




Obtaining Top Management

Commitment and Participation

Terry Finnegan, Senior Business Manager

ImagePoint

10:00 Thursday – Level II



Resolving Conflict and

Building Consensus

John Gallucci, Director, Gerber




Decisions &Updated

Game Plan

Decisions, Recommendations,

Scenarios, & Agenda for Exec Meeting

Step 1Data

Gathering

End of Month

Actual Demand, Supply,

Inventory, & Backlog +Statistical Forecasts

and Worksheets




DemandPlanning

Step 3Supply

Planning

Step 4Pre-

Meeting

Step 5Exec

Meeting


Question for PanelistsQuestion for Panelists

Your Process:

Same?

Different?

Hardest Part?


Executive S&OP . . .Executive S&OP . . .Executive S&OP . . .Executive S&OP . . .

• Is an executive decision-making process

• Balances demand and supply

• Deals with volume in both units and $$$

• Ties operational plans to financial plans: one set of numbers



Working with One Set of Numbers

Amy Mansfield, Manager, V&M Star

Melissa Takas, Financial Analyst, V&M Star



Executive S&OP . . .Executive S&OP . . .Executive S&OP . . .Executive S&OP . . .

• Is an executive decision-making process

• Balances demand and supply

• Deals with volume in both units and $$$

• Ties operational plans to financial plans: one set of numbers

• Is the forum for setting relevant strategy and policy regarding demand and supply



What role does Top Management play in this process at your company?


Hard BenefitsHard BenefitsHard BenefitsHard Benefits

• Customer Service UP• Plant Productivity UP• Inventory DOWN• Obsolescence DOWN• Freight Costs DOWN• Order Lead Times DOWN• Supplier Lead Times DOWN• Time to Launch New Products DOWN



S&OP Support for

New Product Launch

Craig Faulkner, S&OP, W. L. Gore

9:45 Friday – Level II


Soft BenefitsSoft Benefits

• Enhanced Teamwork• Structured Communications • Better Decisions with Less Effort and Time• Better $$$ Plans with Less Effort and Time• Greater Accountability• Greater Control • Window into the Future

Top Management’s Handle on the Business



Biggest Benefits: Hard

Soft



Implementation:

How Long?

Costs?

Toughest Part?



How to Implement S&OP Successfully

Rick Hall, VP, Homac/Thomas & Betts

Bob Stahl, President, R.A. Stahl & Co

8:30 Friday– Level I


The Global ChallengeThe Global Challenge

“We are a series of organizations doing business locally, with intense global coordination.” –Percy Barnevik

Former CEOABB

Executive S&OP should support these dual objectives.



S&OP in a Global Business

Alan L. Milliken, Manager, BASF

8:30 Friday– Level II


The Future of Executive S&OP: The Future of Executive S&OP: Growth FactorsGrowth Factors


• Success breeds success


Adoption of New ProcessesAdoption of New ProcessesAdoption of New ProcessesAdoption of New Processes

There is a 15-25 year lag between the development of a new process and its widespread adoption.

Examples: MRPII/ERP, TQM/6SIGMA, JIT/LEAN

Executive S&OP Today

“The word gets around.”




• Success breeds success• Lean Manufacturing and S&OP


Toyota: Toyota: The Lean “Poster Child”The Lean “Poster Child”

Toyota: Toyota: The Lean “Poster Child”The Lean “Poster Child”

At Toyota, production is

pushed into Fin Goods Inv

(~ $2-3 Billion)

In many companies, production is

pulled by Customer Demand

In balancing demand and supply,many companies have a tougher job

than Toyota. Their solution: Executive S&OP.



S&OP and Lean Manufacturing

Jeff Greer, VP, KVH Industries





• Success breeds success• Lean Manufacturing and S&OP• Globalization• New users outside traditional manufacturing• S&OP specific software



Technology as an S&OP Enabler

Larry Lapide, Director, MIT

10:55 Friday– Level II




• Success breeds success• Lean Manufacturing and S&OP• Globalization• New users outside traditional manufacturing• S&OP specific software• Greater financial integration, power and utility• A highly visible presence

in the executive suite


My PredictionMy PredictionMy PredictionMy Prediction

“Over the next 10 years, Executive S&OP will emerge as a primary tool in the Top Management tool kit.

“It will be widely viewed as indispensable for organizations needing to balance demand and supply in a complex, rapidly changing environment.”

Tom Wallace Chicago June 19, 2008


Thanks for ListeningThanks for Listening

To get copies of slides:

www.tfwallace.com/resources

will be up by Monday morning