S&OP A Better Way to Run Your Business- Eyeon Solutions

transcript

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

Speakers

Danny Smith, VP Industries

Steelwedge Software

Jan Veerman, Managing Partner

EyeOn Solutions

Agenda

•  S&OP: Current State and Challenges

•  Realizing the Business Value from S&OP

•  A Call to Action

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

Great Results when Executives are Fully Engaged “How involved is your executive team?”

Closing the Gaps in S&OP Study 2013: CSCO Insights

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?

Reality: Most Execs Not Fully Engaged in S&OP Process “Does your executive team own the S&OP process?”

Why aren’t executives

owning the S&OP process?

Most Efforts Not Supporting Executive Needs “Rate your S&OP capabilities”

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

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

25.7% 28.4%

46.7% 44.4%

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

Gap between Best Practices & Current Situation “Rate your S&OP process” (maturity)

Below Average

Only Adequate

Excellent

World Class

After 30+ years of S&OP only 10% rate themselves as Excellent or World-Class

Agenda

Key for Delivering Results: Addressing All S&OP Critical Success Factors

People (Collaborate)

Process (Automate/Monitor)

Technology/Data (Manage)

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

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

Gap between Best Practices & Current Situation “What tools do you use for S&OP?”

83% still using spreadsheets or

limited functional-silo tools

Industry Data

Ground Reality: the Difficulties of Supporting the Process

Marketing

Operations

Finance

Consolidation Review, Overrides Consensus Process

Pre-ES&OP

Manual

Complex

Security Risk

Not Scalable

Does this Give Executives an Agile Decision Making Process?

People, Process & Systems Together Enable and Sustain S&OP Adoption & Values

“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

Accelerated Time to Value

Step Change Maturity & Performance

Avoid Process Failure

Agenda

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

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

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.

EyeOn offering

Research & Publications

Consulting

Expert Sessions / Idea Labs

Benchmarks

Teaching Interim

Outsourcing

Industry Networks

Selection of customers

High Tech Food / FMCG Process Life Science Zorg

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)

The objective is to enable high quality decision making!!!

S&OP the cure for all diseases?

GDP$growth$S&OP$publica5ons$

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.

Finance

Manufacturing

Demand Planning

Inventory Planning

Supply Planning

Supply / Demand Match

Performance Review

Benefits to be expected from S&OP

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

DEMAND SUPPLY

Stock Levels

Forecast Accuracy

Factory Performance (CLIP / RLIP / LAP)

Service Level (On Time In Full)

4 most important performance indicators S&OP process

Trends and movements in planning: Technology driven

Large variety in Planning tools

•  Traditional ERP vendors •  Operational focus •  Rigid

•  Software as a Service (Saas) solutions •  Specific solutions •  Agile

•  S&OP solutions

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

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