does your s&op deliver agility?

1 © 2013 Steelwedge Software, Inc. Confidential.

November 19, 2013 With Lora Cecere and Ed Lewis

Does Your S&OP Deliver Agility?

Improving Agility through S&OP

Process


• Revenue Management

• Sales and Operations Planning

• Supplier Management

• Corporate Social Responsibility

Agility and Alignment Improvement

through Horizontal Processes


Supply Chain Insights


Definition of “Agility”


Agility


Those with More Mature S&OP Goals Report

Greater Supply Chain Agility


Extremely agile

Agile

Neutral

Not agile

Not very/at all agile

Quick Poll: How Agile

Is Your Supply Chain?


Agility


At each stage of S&OP Maturity, ask the question:

1. What is the goal?

2. What should we measure?

3. What defines success?

Evolution


S&OP Process Existence, Goals & Processes


Common Practice Market-driven Focus

S Ask sales Focus on market drivers:

How do we best shape demand?

& Direct integration to supply

Design of the value chain to optimize

trade-offs, minimize risk, balance

cycles, and orchestrate demand

OP Manufacturing plan Trade-offs between make, source and

deliver

Getting to Letter Perfect

14


S&OP Evolution

Manufacturing- Driven

Deliver a Feasible Plan for Operations

Match Demand with Supply

Sales Driven

Match Demand with Supply

Business- planning Driven

Maximize Profitability

Demand Driven

Maximize Opportunity Sense and

Shape Demand

Market Driven

Maximize Opportunity and

Mitigate Risk. Orchestrate

Demand Market to Market

Greater Benefit

• Growth

• Resilience

• Efficiency


Technology Evolution


S&OP Balance


Form of Inventory Function of Inventory

Raw Cycle Stock

Semi-finished Goods Safety Stock

Finished Goods In-transit Inventories

Returned Inventories Seasonal Builds

Slow and obsolete Promotional Inventories

Risk Hedging

New Product Launch Builds

Form & Function of Inventory


Ease of Getting Total Supply Chain

Costs

___________________________________________________________

Source: Supply Chain Insights LLC, Transportation (Aug-Oct 2012)

Base: Transportation Users (Manufacturers, Retailers and Distributors) (n=34)

Q18. How easy is it for your company to get total supply chain costs for your operations?

12% 12% 24% 24% 29% Users

USERS: Ease of Getting Total Supply Chain Costs

Extremely/very easy 5 Neutral 3 Extremely/very difficult

24% EASY 53% DIFFICULT


Quick Poll: How easy is it for your

company to get total supply chain costs?

Extremely/very easy

Easy

Neutral

Difficult

Extremely/very difficult


Mature Sales and Operations Planning


Cost

Volume

Growth

CEO

Chief Customer Officer

Chief Marketing Officer

Sales

Account Teams

COO

VP of Supply Chain

Customer Service

Procurement Logistics

CFO

CIO

VP of Manufacturing

Quality

Typical Organization


Alignment


Finance


Information Technology


S&OP Maturity Improves Alignment


S&OP Process Plan Execution


Current Focus


• “I wish that we could talk about forecast error without having to feel like we need an apology…”

• “We need a balanced scorecard not an encyclopedia of metrics…”

• “The metrics need to align around value…like I was trained in my Bonsai class, let the tree show you the way…”

• “Every industry has their own iron triangle that defines supply chain potential. Customer service is always in the middle…”

Quotes from Recent Interviews


• Revenue

• Profitability

• Inventory (DOI or Inventory turns)

• Customer Service (case fill or perfect order)

• Forecast Accuracy

Metrics: Focus on Balance


Benefits Received

Source: Supply Chain Insights, 2012

What benefits have you received from your work with S&OP processes?

59%

57%

50%

42%

38%

36%

34%

32%

32%

30%

Increasing revenue

Improving forecast accuracy

Reduction of inventory

Improving asset utilization

Determining outsourced manufacturing

Determining procurement requirements

Improving new product launch

Transportation and warehouse management

Capital planning and asset management

Improvements in the perfect order

▲ 2%

▲ 5-7%

▲ 3-7%

▲ 3-6%

▲ 3-6%

▼ 10-15%

▼ 2-8%


Functions of Center of Excellence


Center of Excellence


Value Network Strategy

Supply chain strategy

Business Strategy What are the right things to do to increase company value?

Value-network Supply Chain Strategy What are the right ways to support the business strategy?

What are the right trade-offs between value drivers for each value network?

Right product

platforms

Design the

supply

response

Build

organizational

systems and

manage talent

Align supply

relationships

Align demand

relationships

Effective Supply

Networks

Execution of buy-

side strategies

Continuous

Improvement

Capabilities Required

Supply Chain

Network Design

Design Networks

Innovation

Methodologies

Demand Networks

Joint Value Creation

Strategies

Business Process How do I do the right things right?

Source: Supply Chain Insights, LLC


• S&OP has grown in importance.

• The trade-offs of the supply chain cannot be effectively modeled using a spreadsheet.

• Each stage must be built with the goal in mind.

• Focus on continuous improvement and serving the business.

Wrap-up


Save the Date!

Supply Chain Insights Global Summit 2014 September 10-11, 2014

The Phoenician – Scottsdale, AZ USA


Who is Lora?

• Founder of Supply Chain Insights

• Partner at Altimeter Group (leader in open

research)

• 7 years of Management Experience leading

Analyst Teams at Gartner and AMR Research

• 8 years Experience in Marketing and Selling

Supply Chain Software at Descartes Systems

Group and Manugistics (now JDA)

• 15 Years Leading teams in Manufacturing and

Distribution operations for Clorox, Kraft/General

Foods, Nestle/Dreyers Grand Ice Cream and

Procter & Gamble.


Where Do You Find Lora?

Contact Information:

[email protected]

Blog: www.supplychainshaman.com

(4000 pageviews/month)

Twitter: lcecere 4640 followers.

LinkedIn: linkedin.com/pub/lora-

cecere/0/196/573 (5600 in the network)

© 2013 Steelwedge Software, Inc. Confidential. 46 Outline

Single Line of Sight: Plan, Perform, Profit

Steelwedge Agility Webinar Series

Lora Cecere - Does your S&OP Drive Agility?

November 20, 2013

Outline

Steelwedge Drives Agility

Alignment - Cross functional planning between

Sales, Marketing, Operations and Finance

Action Readiness - Low planning latency due

to data collection or application silos

Alternatives - Scenario analysis and margin

optimization

Assessment - Balancing supply and demand.

Assessing trade-offs.

Outline

Cross-functional Collaboration

From a single cloud based solution.

Account and Sales

Managers

Supply Planning

Production Planning

Finance

Executive

Sales and Marketing Executive

Supply Chain Executive

Product Managers

Demand Planning Marketing


S&OP Sales

Statistical Forecast

Demand Planning

Revenue Planning

Pipeline Management

Sales Collaboration

Attach Rate Planning

Lifecycle Management

Consensus Demand

S&OP Operations

Demand Sourcing

Supply Plan

Procurement Plan

Rough Cut Capacity

Inventory Planning

Master Planning

Inventory Investment

Allocations

S&OP Collaborate

Customer Collaboration Supplier Collaboration

Executive S&OP

Strategic Planning Integrated Business Planning Profit & Loss Risk Management S&OP Insight

Mobile

Excel Pivots

S&OP Apps

App Library

Customer Developed

Steelwedge NAPA

Cloud Studio Cloud Integration Portal Cloud Services Portal

Planning Engine Analytics Engine

S&OP Platform

Outline

Planning data from

across the systems landscape

Business Intelligence

SCP

ERP

Financial Systems

CRM

Data Warehouse

Outline

Customer Improvements

Planning Cycle Time - 50-70% reduction in via integration and process automation

Forecast Accuracy - 15-30% improvement

in forecast accuracy through collaboration and

advanced statistical forecasting

Excess Inventory - 10-20% reduction in

excess inventory via improved forecast

accuracy

Stock-outs - 25% reduction, raising

customer service

Revenue and margin - 5% lift through

reduced stock-outs and better cost management

Outline

The sales force knows customer demand - what and when they will buy.

But often, the opportunity pipeline is not considered in demand planning.

Valuable capital gets tied up in excess inventory when forecasts are too high.

Inaccurate forecasts result in shortages, expediting, and lost sales when the forecast is too low.

Is Your Sales Pipeline Connected to Your Demand Plan?

Outline

Sales Pipeline Bridge Demand Visibility and the Sales Pipeline

Dynamic, competitive markets have changed the game

• Statistical projections alone are insufficient.

• CRM sales opportunities: Best reflection of customer demand.

• Opportunities + Stat Forecast = Forecast Accuracy improvement.

Steelwedge Sales Pipeline Bridge

• Intelligent opportunity filtering and translation

• Recognizes and transforms CRM and SFA

data

• Correlates to ERP and SCM data

• Dramatic forecast improvement and

enterprise alignment.

Steelwedge Bridges the Planning Gap between CRM & ERP

ERP

Outline

Insert SPB screenshots here

Link to ESOP

Opportunity Pipeline via Sales Pipeline Bridge

on

Opportunity Pipeline for S&OP Planning

Outline

Confirmed S&OP Sales Plan

Outline

Steelwedge Sales Pipeline Bridge enables you to extract, understand and operationally act on the critical information in your sales funnel

Connect Your Sales Pipeline to Your Demand Plan With Sales Pipeline Bridge


Executive S&OP

Supply Plans

Finance Plans

Demand Plan (Unconstrained)

Supply Plan (Constrained)

Finance Plans

Pre-meeting

Executive S&OP

Compass Inputs

and Outputs

Supply & Demand

Scenarios

Inputs

Business Unit

Supply Plans

Sales, Backlog,

Opportunities, Inv.,

POs, Budget

& Master Data

Business Unit

Finance Plans

Balancing & Scenario

Planning

Scenario Review

& Issue

Resolution

Planning Processes

Consensus Demand

Forecasts

Executive S&OP

Nightly

Transaction

Files

Insight

S&OP Apps

Performance

Current Plan

Finance

Waterfall

KPI Dashboard

Collaboration

4.05 Pre Meeting Series_6615_Exec_S&OP_Multi.xlsx

4.90 Exec S&OP - S.xlsx

4.93 Profit and Loss.xlsx


4.90 Exec S&OP - S


Dashboard

does your s&op deliver agility?

Technology

value chain

supply business planning

shape demand market

operations match demand

profitability demand

sop evolution manufacturing

mature sop goals

sop process existence