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Sales and Operations Planning
Sustaining Performance after Implementation
Brad McCollumSr. Manager, Materials Planning and Logistics
Ned FinchSVP, Global Supply Chain & Lifoam Operations
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Agenda
• Introductions
• A little about Jarden and Jarden Home Brands
• The History of Our S&OP
• Symptoms of a Degrading Process
• Keys to Maintaining Quality
• Questions
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Jarden: The brands of everyday life
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Jarden: The brands of everyday life
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Jarden: The brands of everyday life
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Functional Structure - 4 Business Units
Fresh PreservingFresh Preserving
Casual EntertainingCasual Entertaining
FirelogsFirelogs
Recreational Recreational ProductsProducts2009 2010 2011
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OUR Success
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Demand: Market Facing Families…
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2003-2007: Family Level Demand
Normal Mfg
Capacity
Max Mfg Capacity
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Probably Not
2008
2nd Lowest JUN in 6
Yrs
Just another year…
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The Results…
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Significant Increase in Sales
2009
ES&OP Kick-Off
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Reduced Cancellations due to Product Availability
~ 50% Reduction with
Significantly Higher Sales
Before S&OP After S&OP
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Significant Cultural Benefits
Alignment of Human Energy• Elimination of the silos• Cross Functional Education
Dials are Connected• Tactical Execution of Strategic Plans• Risks Decisions are Made at Right Levels
Inclusive Business Management• S&OP Team Owned the Sales Forecast• S&OP Team Owned the Production Plan• S&OP Team Owned the Process and Deliverables to the Exec Team
Conflict Resolution• S&OP Requires Conflict, but also Provides a Forum and Process to Management it
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The Challenge…
Sustaining that Performance over time…
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Where problems occurred…
Month End Data
Gathering
Demand Alignment
Supply Recommend
ations
Integration
Exec S&OPMeeting
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Cracks in our Foundation
Data Conversion Issues• New Items improperly equalized• Items Missed/Not Maintained
Late Deliverables• Sliding Dates• Expanding Calendars (“I just need more time”)
Changes Occur without Confirmation• Tool Formats Change• Sources Change• Horizon Change
Quality Issues Creep into Process• Loss of Confidence in Supporting Data
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The Solution
Continuous Quality Assurance• Deliverables should be checked every cycle prior to their entry into the
process• Track Changes Cycle over Cycle
Corrective Actions have to be Immediate and with Priority• Remember that this Data supports business critical decisions
Drive Ways to Make this Process Bullet Proof • Eliminate sources of error
Maintain a Path for Confirming Process Change• Better and more efficient ways are expected as part of the process, but still
need to be confirmed by the team
Keep up with Adjacent Changes• S&OP support needs to be part of adjacent systems design/change
considerations
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Month End Data
Alignment
Demand Alignment
Supply Response
Integration
Exec S&OPMeeting
Where the problems occurred…
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The Fundamentals of Demand Alignment
Demand Alignment
Mar
ket
Cust
om
er
Histo
ry
Reconciliation of Opposing Views
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Shortening Horizon
24MonthsTime
MIX VOLUME
Sales CallSales Call
Volume/Marketing CallVolume/Marketing Call
Planning Time FenceReconciliationConsensus Demand
Consensus Demand
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Loss of Top Down Perspective
THEORIES
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Bias and Error
BIAS
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Other Symptoms
Demand Alignment Meetings become shorter and shorter• The Reconciliation of Opposing Perspectives requires debate
Demand Alignment Meetings Attendance Suffers• Key players begin to decline/no show
BIAS Becomes Apparent• Prolonged Bias Results and becomes difficult to address• Supply begins taking bias into consideration
Eventually Real Alignment isn’t really happening• Error Increases without the value of the discussions required to gain alignment• The value and importance of Alignment erodes• Demand Team Members disconnect from the process and if deliverable
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The Solution
Never Loose the Three Legs• Retain Rigor around bottom up forecast within the Planning Time Fence• Top down is more art than science – It is the quantification of theories that are
relevant to the category
Don’t let up on basis Meeting Management• Attendance• QA of Deliverables
Track and Monitor Bias and Error• Improvement should be the basis for comparison
Set and Pursue ContinuousImprovement Goals
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Month End Data
Alignment
Demand Alignment
Supply Response
Integration
Exec S&OPMeeting
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Design Objectives:
Highest level possible based on agreed upon market drivers
Grouped based on how capacities are constrained
Proven Assumptions that allow demand to be applied to supply
groupings
Market Facing Product Families
Market Facing Product Families
Supply GroupingSupply Grouping
Reasonable AssumptionsReasonable
Assumptions
Product Groupings:
Reasonable Assumptions Change
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Monitors Get LostR
un Charts for each S
plit
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Capacities and Productivity Change
WC1WC1 WC2WC2 WC3WC3
WC4WC4 WC5WC5 WCNWCN
Individual Capacities - Scheduled
Capacity GroupingCapacity Grouping
Rough-Cut Capacity
WC4WC4
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The Solution
Rigor Around Supporting Monitors• Make Run Charts part of the regular Meeting (i.e. Assumption Models)• Pursue Ways to Bullet Proof and Automate Monitors
Educate New Players on the Key Behind the Scenes Controls• As your models Mature, these Monitors/Controls become more complicated
and difficult to hand-off/transfer to other resources
Aggressively Pursue Outliers/Bias• These assumptions are fundamental to your results
Monitor Adjacent Projects Impacts to S&OP Assumptions• Acquisitions• Plant/Capacity Modifications and Improvements
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Month End Data
Alignment
Demand Alignment
Supply Response
Integration
Exec S&OPMeeting
The Results
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Upstream Issues Create…
Last Minute Iterations before Integration and Executive Meetings• Last Minute Errors Found• Financial Integration show something totally off
Integration Meeting Content gives way to Reconciliation and Error checking instead of Substantive Discussion
Integration Meeting Attendance Dwindles• Same people you had in Supply Meetings
People Unwilling/Unable to Defend Perspective• Inconsistent perspectives exist• Backroom Discussions/Decisions
Ultimately, ES&OP Meeting Attendance Dwindles• Benefits begin to un-ravel
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Summary
Be vigilant with 1st Pass Quality with deliverables• Cracks in the Foundation damage the rest of the house• Don’t let the details fall to the way side…
• RUN CHARTS to understand when change is occurring
Continuous Continuous Improvement• It really does take constant pressure
Survey Regularly• Flag for degrading processes• Everyone is responsible for pointing out the need for corrective actions
Watch and Track Attendance• When attendance dwindles...something is wrong
Don’t Expect New Team Members to Just “Get it”• Onboard S&OP Participants and New Executive Team Members to the Process is
CRITICAL
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S&OP is Never Ending Continuous Improvement
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Questions?