A Practitioner’s Guide to Successful S&OP and Demand Management

1 © 2014 Steelwedge Software, Inc. Confidential.

Single Line of Sight: Plan, Perform, Profit

A Practitioner’s Guide to Successful S&OP and Demand Management

Seema Phull, NorthFind Partners

Karon Evanoff


• Global partnership of practitioners

• Passion for turning insights into action.

• Enabling value-chain transparency,

synchronicity and goal alignment.

Today’s Presenter

Seema Phull, Partner


Today’s Presenter

• With over 20 years in Supply Chain, she has

extensive knowledge and experience

working within the S&OP process.

• Early in her career, she cut her teeth as a

buyer. As she rose through the ranks on a

fast track she always found herself at the

forefront of change.

• She has been responsible for building a

Supply Chain teams and processes from

ground zero in startup VC funded

environments as well as revamping existing

teams and processes within the supply

chain discipline.

Karon Evanoff


Why Do Most S&OP Initiatives Fail?

How to get started with S&OP and how to sustain success?

What’s the power of proven S&OP processes and technology?

What works and What doesn’t

Questions for Practitioners


Why do most S&OP initiatives fail?


• Project vs. Journey

• Functional vs. Enterprise

• Sound bites vs. Data and actions

Why do most S&OP initiatives fail?


Journey

“… a traveling from one place to another, usually taking a rather long time;

passage or progress from one stage to another” 2

Quantified Mission

Project

“… a temporary endeavor with a defined beginning and end… typically constrained by

dates or funding” 1

1. Chatfield, Carl. "A short course in project management".

2. Dictionary.com Unabridged, Based on the Random House Dictionary, © Random House, Inc. 2009.

Effective approach to S&OP… • A comprehensive, multi-year endeavor

• A permanent change to how we do business planning

• An enabler to long-range strategic planning initiatives

Manage S&OP as a Journey

http://office.microsoft.com/en-us/project/HA102354821033.aspx


• Define the goals – year-by-year, quarter-by-quarter

• Understand the risk areas – people, processes, data

• Links to other initiatives – is S&OP a driver or enabler?

• Track progress diligently – make sure we cover the hard and soft sides

Constructing the Roadmap…

Long

Range Multi-Year

Medium

Range This Year!

Monthly &

Quarterly Tracking to Goals

Clearly Chart the Journey

Connect the process to the desk level in order to get the results


Ideal State

Succeeding

Improving

Beginning

• Demonstrate Success every 30 days

• Make it a Standard

• Establish Point of Diminishing Returns

• Non-statistical forecast

• Low S&OP knowledge

• Disconnected plans

• Formal process in place

• Demand-supply alignment

• Organization roles clear

• Customer & market data

• Finance involvement

• Standard work, clear R&R’s

• Product lifecycle planning

• Constraint Planning

• Optimization Scenarios

• Disparate data sources

• Non-standard reporting

• Fewer data sources

• Stabilized month-to-month

• Standard reporting

• Alignment alerts, control limits

• Forecasting software

• Receipts-to-cash data linkage

• One S&OP Reporting Tool

• Scenario comparisons

• ‘Real-Time’ reporting

Ideal State Succeeding Improving Beginning

Process Maturity

Sys & Data Maturity

Strong relationship between Process and Data maturity

2013

Call To Action:

Do S&OP!

2014

Expand &

Standardize

Q4 2014 2014

Set Policy &

Deliver Tools

A Framework for Success

Q1 2015

Enables Executive Mgmt Sponsorship


• 3 easy steps

Turn Data into Action

Put all your SKUs on the table

Isolate SKUs that

matter

Create plan for

every SKU


• Key Components

• People, Process, and Technology

• Vision: connect manufacturing floor to CEO

• Tactical results every 30 days!

• Transparency

• The right context from your data

• A Common vocabulary

• Deal with the demons

• Air them quickly

• Implement reactive and proactive solutions

Transparency…Translation…Trust…Transformation

Data Brings Transformative Change


How to get started with S&OP and how to sustain

success?


• Large manufacturing companies with revenues between $500M

up to $10B, Simple to complex supply chain

• Global Manufacturing, Distribution, Supply Networks covering the

globe

• Consumer, Services, Industrial, and Commercial products

• Problem: S&OP “Food Fight”

• Missing delivery + growing inventory

• 2 to 3 turns against industry average of >5 and 7

• Manufacturing costs exceeding budgets

• Sporadic S&OP

Case Studies


• Step 1: Data Driven Diagnostic

• Demand, Supply, Operations, and Mgmt. team

• Process, Technology, and Organizational talent

• Findings:

• Bad demand forecast driving unchecked manufacturing

• Safety stock built without understanding uncertainty risk

• No formal metrics.

• Blind adherence to a ‘system’ no one owned

• Lack of formal training on planning

• Procurement completely out of the loop

Methodology for Resolution


• Step 2: Data Driven Action Plan

• Part Segmentation defines plan for every part

• Isolate root cause…

– 5K of 25K parts drove company’s profitability

– 1/3 of active parts had no activity in 12 months

– Customer signal 30% more inaccurate than statistical forecast

– Top 25% suppliers impacted majority of revenue

– Safety stock not needed on 20% of the part numbers

– Some parts have excess of 6 mos of supply on hand



• Step 3: Get Off the Bench

• Started with one product family

• 3 month pilot: connected whole organization

• Exposed root causes and implemented corrective actions

• Focused the organization on data driven metrics

• Put in place 30 day ‘true S&OP process’

• MADE DECISIONS; Delivered RESULTS



Ready to launch to entire business!!!

• 20% less safety stock

• $13 million less inventory

• Monthly executive S&OP meeting

driving decisions

• Right forecasting methodology

• Right purchasing plan

• Right constraints evaluation

• Right supply plan constraints

• Working capital driven

customer-driven products

3 to 5 cycles later…

All was not perfect but it was proactive!


• Conduct a diagnostic that is built real business practices

• Focus on Change Management aspects

• Develop a Plan for Every Part

• Model impact on key metrics such as customer service and inventory

• Create one ‘well of truth’

• Centralized analytics with context and consensus

• Establish a culture of accountability

• By enabling effective metrics and performance mgmt.

Summary of what enables success


What’s the power of proven S&OP processes and

technology?


• Technology helps to mature and sustain a good S&OP process

• Technology replaces spreadsheet ‘islands’ with integrated

planning platform

• Demand, supply, inventory plan transparency enables better financial

alignment

• Connect to all execution processes including customers and

suppliers so that organization is able see leading indicators that

could negatively impact performance

• Enables internal collaboration and escalation of issues in real time

Power of proven S&OP processes and technology




Keys to S&OP Planning Success

Effective Metrics and Performance Management

Executive Involvement and Leadership

Dedicated S&OP Manager

Monthly Process Cadence

Both Tactical and Strategic

Collaboration

Common Language and Data

Financial Integration

Fast and Accurate Demand Plan


• 60% effort should be in changing the culture

• What changes the culture?

• Making the change personal… make the mission THEIR mission not yours

• Establish beach heads and connect shop floor to CEO

• Use technology for insights and robust diagnostics

• Expose ‘ugly babies’ to leadership

• Conduct Root Cause Corrective Action immediately

• Create 2 parallel paths:

• Execution action to drive benefits

• Process development and maturation journey

• Deliver RESULTS every 30 to 60 days


Get the change in the DNA of the organization


• Beware of executive ‘lip service’

• Endless process mapping

• Lack of thought leadership on process or change mgmt.

• Lack of technology and process integration

• Careful with technology

• Transactional systems vs. Best of Breed?

• Does it enable true collaboration

• Does it enable proactive perspective

What doesn’t work


“ Steelwedge has grown into

the market's leading S&OP

solution in the cloud. ”

Rating: Positive

Global market share leader

Offices: USA, Europe, Japan & India

Founded in 2000, 50%+ year over year growth

Global organization focused on global delivery

Cloud Based Integrated Business planning platform

100% cloud-based for rapid deployment & value realization

Steelwedge: The S&OP Company


• Steelwedge drives organization alignment

Visibility across systems landscape

Make better decisions, quickly

• Flexible, Scalable and Easy to Use

• Accelerated Time to Value

• Leverages Existing Systems Investment

Steelwedge S&OP Platform


Q&A Contact Us

Email: [email protected]

Telephone: North America +1 (855) 980.8800

United Kingdom +44 (0)121.232.4668

Netherlands +31 (0)70.7999.288

Japan +813-6277-8521


Date post:	01-Dec-2014
Category:	Technology
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