Drive better returns from S&OPPractical steps to improve ROI from your S&OP investment

Agenda: Drive better returns from S&OP

o Introduction

o The promise of S&OP

o Alignment drives better performance

o Practical steps to improve alignment

o Case Study

o S&OP ROI Check-list

S&OP Vital Signs Blog Series

Anaplan-Valizant

2017 S&OP PractitionerWebinar Series

Practical steps to realize more S&OP value

Visit the booth in the Expo Hall

The promise of S&OP

Sales & Operations Planning –Best Practices (2006)

John Dougherty and Christopher Gray

“Inside the walls” of 13 companies with outstanding S&OP programs.

On-time delivery

7-13% improvement

Inventory investment

10-20% reduction

Distribution and transportation

5-15%reduction

Manufacturing downtime

5-26% reduction

Benefit multiplier

1.3x - 2xconcurrent initiatives

AGFA US HealthCare

AmcorFlexibles Packaging

Group

Cast-Fab Technologies

Coca-Cola Midi

DanfossCommercial Compressors

Eclipse

Eli-Lilly & Co. Engineered

Materials Solutions

InterbakeFoods

Div. Weston Foods

Norse Dairy Systems

Div. Weston Foods

PYOSAColors Division

The Scotts Company

Agenda: Drive better returns from S&OP

o Introduction

o The promise of S&OP

o Alignment drives better performance

o Practical steps to improve alignment

o Case Study

o S&OP ROI Checklist

Execution

Operational

Tactical – Intermediate Functional Plans

Strategic

MonthsQuartersYears

Budget / Annual Operating Plan

Planning Altitude

Strategic Plan

Marshal and determine actions to support the mission, goals, and objectives. Explicit mission, goals, objectives and actions.

Tactical Plans

Functional plans (e.g., production plan, sales plan, marketing plan) synchronizing activities across functions for achieving the intermediate goals and objectives to support the strategic plan.

Operational Plans

The set of short-range plans and schedules detailing specific actions.

Supply Chain Execution

Execution-oriented for procurement and supply across a supply chain. Manufacturing, warehouse, and transportation execution and visibility across the supply chain.

Sales and Operations Planning (S&OP)

Process to develop tactical plans providing management ability to strategically direct and achieve advantage by integrating customer-focused plans with the supply chain.

Sales & Operations Planning (S&OP)

American Production and Inventory Control Society Dictionary, 14th Edition (2013)

1 2 3 6 9 12

1 2 3 4 1 2 3 4

1 2 3 4 5

Aligned plans—not just integrated

Operational planning

Material

Rough-cut capacity planning

Allocate production capacity

Material and key component planning

Component requirements

Distribution and inventory planning

Set inventory targets

Demand planning and sales forecasting

Estimate demand

Demand

1 2 3 6 9 121 2 3 4 1 2 3 4

1 2 3 4 5

MonthsQuartersYears

Distribution

RCCP

SKU mixLevel of Detail

Typical Lead Time

Finance

New product Promotions

Sourcing

Sourceplanning

Material spend and savings

Financialplanning

Finance forecast

Trade promotions management

Product promotion

Newproducts

New product introduction

Execution

ERP: System of record for transactions and master data

• Sales orders• Fulfillment orders• Transfer orders• Inventory• Purchase orders

Execution

Tactical Planning

Product family volume

Rough-cut capacity planning

Demand planning Inventory planning

Key component planning

Source planning

New product planning Trade promotions planning

Financial planning

S&OP, tactical, and operational plans

Beyond lead time planning, tactical planning is required to:o Ensure resources and capacity are aligned to strategy… while the

best options are still possible.

o Integrate and align financial, sales, marketing, and product development plans.

o Set volume plans to guide SKU mix.

Operational planning

Material

Rough-cut capacity planning

Allocate production capacity

Material and key component planning

Component requirements

Distribution and inventory planning

Set inventory targets

Demand planning and sales forecasting

Estimate demand

Demand

1 2 3 6 9 121 2 3 4 1 2 3 4

1 2 3 4 5

MonthsQuartersYears

Distribution

RCCP

SKU mixLevel of Detail

Typical Lead Time

Finance

New Product Promotions

Sourcing

Sourceplanning

Material spend and savings

Financialplanning

Finance forecast

Trade promotions management

Product promotion

Newproducts

New production introduction

Execution

Tactical Planning

Product family volume

Sales & operations planning

Executive S&OP

Executive S&OPArbitrate use of resourcesInputDemand planInventory planRough-cut capacity planKey component constraints

OutputFinal planOperational finance plan

Tactical planning

Rough-cut capacity planning

Demand planning Inventory planning

Key component planning

Source planning

New product planning Trade promotions planning

Financial planning

Execution

ERP: System of record for transactions and master data

• Sales orders• Fulfillment orders• Transfer orders• Inventory• Purchase orders

S&OP, tactical, and operational plans

Agenda: Drive better returns from S&OP

o Introduction

o The promise of S&OP

o Alignment drives better performance

o Practical steps to improve alignment

o Case Study

o S&OP ROI Checklist

Operational Planning

New Product Planning

Promotions Planning

Sales Forecast

Distribution/ Inventory Planning

RCCP

Material Planning

Source Planning

Finance Forecast

Demand Planning

Product Marketing Sales Operations Finance

S&OP vital signsExecutive support and participationCross-functional scopeConstructive issue resolutionEnabling technology

Executive S&OP

Sales and operations planning

Executive team

Tacticalplanning

New product planning

Promotions planning Sales forecast

Distribution/ inventory planning

RCCP

Material & key

components

Source planning

Finance forecast

Demand planning

Product Marketing Sales Operations Finance

Fundamental planning alignmentDemand signal planningFG inventory planningRough-cut capacity planningMaterial and Key Component Planning

Advanced alignmentSource planningPromotions planning

Intermediate alignmentNew product planningFinance forecast

Increase ROI: eliminate misalignment

End to end alignmentPlan CompletenessInterlocking Terms and HorizonPlanning Cadence

Executive S&OP

Sales and operations planning

Executive team

Tacticalplanning

New product planning

Promotions planning

Sales forecast

Distribution/ inventory planning

RCCP

Material & key

components

Source planning

Finance forecast

Demand planning

Product Marketing Sales Operations Finance

Current Technology

Excel Paradox - Siloed FlexibilityResult

Misalignment caused by incompatible planning termsPlanning and decision-making is complex, slow and disconnected. Decisions are often based on approximations due to Excel’s limited computational ability

Point SolutionsPros

Feature rich applications for function/sub-function

ConsOverly complex design with “coded” software features.Modifications expensive and time consuming

ResultForced-fit solution reflecting “coded” featuresUnwanted process change jeopardizes performance and adoption

+ Point

Solutions

Executive S&OP

Sales and operations planning

Executive team

Tacticalplanning

New product planning

Promotions planning Sales forecast

Distribution/ inventory planning

RCCP

Material & key

components

Source planning

Finance forecast

Demand planning

Product Marketing Sales Operations Finance

New technology drives alignment

Enabling TechnologyEasy to tailor to functional requirements

Best of two approaches

Utilize advanced supply chain planning techniques

Adapt to company-specific requirements

Underlying data easily accessed

Business user administered – self-service

Share data seamlessly other platform applications

Massive computational power scales with enterprise requirements

Secure, enterprise grade platform

Supply Chain Planning on the Anaplan platform

Deep Supply Chain Planning

World’s most powerful modeling

engine.

Analysis Time

50% faster planning with

composite dashboards

ConnectedNative connection

enables free flow of data between

models.

Performance

True cloud solution. 1 billion cells

recalculated in less than a second.

What-if ScenariosWhole Plan

scenarios using any/all plan levers.

UpgradesSeamless upgrade process enables no

cost upgrade to latest Anaplan

version.

AdaptabilityEase of change

enables adaptation to preferred

process.

Self-serveThe power to build,

connect, and manage your own

models. No Change Orders required.

MaintainabilityConfiguration

managed from live system. Changes

immediately reflected.

No Shelf-ware6-8 week

implementation ensures purchases

implementedand used.

Agenda: Drive better returns from S&OP

o Introduction

o The promise of S&OP

o Alignment drives better performance

o Practical steps to improve alignment

o Case Study

o S&OP ROI Checklist

Executive S&OP

Sales and operations planning

Executive team

Tacticalplanning

New product planning

Promotions planning

Sales forecast

Distribution/ inventory planning

RCCP

Material & key

components

Source planning

Finance forecast

Demand planning

Product Marketing Sales Operations Finance

Sonos Case Study

Supply demand balancing provides reliable channel commit

ChallengesMultiple plans compromised plan confidence

Difficult and time consuming to “assemble” data from multiple sources

Weekly C-Meeting report preparation disruptive to operations

Scenario planning outdated before completion

SolutionSupply demand balancing solution with constraint based planning

Planned capacity, SKU mix, inventory target, and transportation mode levers

Single source of truth for plan with automated data collection

Capacity planning accelerates commit and improves accuracy

Challenges

Capacity and key component constraint plans were disconnected and manual

Difficult to simulate combined impact on capacity and production

Confidence in commit plan and its accuracy required improvement

Manual effort to translate to purchase orders and logistics plan

Solution

Constraint-based capacity planning; standard/ premium/holiday capacity, component supply

Seamless commit plan flow to supply demand balancing

Automated PO generation and shipping container planning

Increased Material Savings with Spend Management

Challenges

Difficulty achieving strategic cost savings targets or explaining material spend variances.

Component requirements approximated using multiple excel spreadsheets and applications.

Time consuming and error prone engineering and contract manufacturer BOM reconciliation

Little time left to address issues or improvement.

Solution

Real-time component requirements from ex-factory plan and current multi-level BOM

Live, 12 month spend and savings projection

Variance drill-down by manufacturer, commodity, product and sourcing manager

Automated Eng. and CM BOM reconciliation

Supply and demand

balancingSupply

planning

Material spend

Component forecast

Transformation roadmap

Key Component

Visibility

Phase III Phase IVPhase IIPhase I Phase V

6 weeks 6 weeks6 weeks8 weeks 6 weeks

Single workspace for all supply chain planning apps

ERP

Data Warehouse

PLM

Anaplan Workspace

Supply Chain Planning Solutions

Sales ForecastingData Hub DH

Inventory Planning

Demand Planning

Supplier Collaboration

Product Allocation

Material Planning

Rough-cut Capacity Planning

DH Data Flow between Apps

Supply Chain

Finance

Source Planning

Agenda: Drive better returns from S&OP

o Introduction

o The promise of S&OP

o Alignment drives better performance

o Practical steps to improve alignment

o Case Study

o S&OP ROI Checklist

Practical Steps to Increase S&OP Return

S&OP ROI Checklist

⎕ Executive Support and Participation S&OP involvement and leadership from the executive leader.

⎕ Cross-Functional Scope Full participation from all functional areas

⎕ End to End Interlock Completeness, Terms and Horizon, Cadence

⎕ Fundamental Alignment Demand, Inventory, Capacity and Material Planning

⎕ Intermediate Alignment New Product and Finance Forecast

⎕ Advanced Alignment Promotions and Sourcing

⎕ Constructive Issue Resolution Focus on problem-solving instead of finger-pointing.

⎕ Enabling TechnologyMinimize process compromise. Place high value on ease of deployment and business use self-service.

Conduct an assessment to evaluate your company’s alignment using the S&OP ROI Checklist

Dedicated team: 4 weeks

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