Chemical Supply Chain

- p. 1 -OM Partners © Proprietary and Confidential

How to Improve and Accelerate your S&OP process

April 20th 2010

Logichem Düsseldorf

Elke Servaes

Senior Consultant


ContentsContentsContentsContents

The OM Partners Group: The OM Partners Group: The OM Partners Group: The OM Partners Group: 5 min 5 min 5 min 5 min - Who we areWho we areWho we areWho we are- What we doWhat we doWhat we doWhat we do

How to improve & accelerate your S&OP process with OMP PlusHow to improve & accelerate your S&OP process with OMP PlusHow to improve & accelerate your S&OP process with OMP PlusHow to improve & accelerate your S&OP process with OMP Plus 35 min35 min35 min35 min- S&OP?S&OP?S&OP?S&OP?- S&OP according to OM PartnersS&OP according to OM PartnersS&OP according to OM PartnersS&OP according to OM Partners



The OM Partners Group: The OM Partners Group: The OM Partners Group: The OM Partners Group: - Who we areWho we areWho we areWho we are- What we doWhat we doWhat we doWhat we do

How to improve & accelerate your S&OP process with OMP PlusHow to improve & accelerate your S&OP process with OMP PlusHow to improve & accelerate your S&OP process with OMP PlusHow to improve & accelerate your S&OP process with OMP Plus- S&OP?S&OP?S&OP?S&OP?- S&OP according to OM PartnersS&OP according to OM PartnersS&OP according to OM PartnersS&OP according to OM Partners


OM Partners = Provider of Demand and Supply Chain Planning SOM Partners = Provider of Demand and Supply Chain Planning SOM Partners = Provider of Demand and Supply Chain Planning SOM Partners = Provider of Demand and Supply Chain Planning Solutions olutions olutions olutions

SUPPLYSUPPLYSUPPLY MANUFACTURINGMANUFACTURINGMANUFACTURING DISTRIBUTIONDISTRIBUTIONDISTRIBUTION DEMANDDEMANDDEMAND

The OM Partners Group: ActivityThe OM Partners Group: ActivityThe OM Partners Group: ActivityThe OM Partners Group: Activity


The OM Partners Group: HistoryThe OM Partners Group: HistoryThe OM Partners Group: HistoryThe OM Partners Group: History

Founded in 1985Founded in 1985Founded in 1985Founded in 1985- Strong roots in Mathematical OptimizationStrong roots in Mathematical OptimizationStrong roots in Mathematical OptimizationStrong roots in Mathematical Optimization- Subsequent evolution towards Supply Chain SolutionsSubsequent evolution towards Supply Chain SolutionsSubsequent evolution towards Supply Chain SolutionsSubsequent evolution towards Supply Chain Solutions

Key figures Key figures Key figures Key figures - PersonnelPersonnelPersonnelPersonnel : 130 employees: 130 employees: 130 employees: 130 employees- TurnoverTurnoverTurnoverTurnover : 15.5 mio : 15.5 mio : 15.5 mio : 15.5 mio €€€€- ClientsClientsClientsClients : over 200 clients and 400 implementations: over 200 clients and 400 implementations: over 200 clients and 400 implementations: over 200 clients and 400 implementations


HeadquartersHeadquartersHeadquartersHeadquarters OM Partners (Antwerpen)OM Partners (Antwerpen)OM Partners (Antwerpen)OM Partners (Antwerpen)

SubsidiariesSubsidiariesSubsidiariesSubsidiaries- OM Partners France OM Partners France OM Partners France OM Partners France ---- OM Partners DeutschlandOM Partners DeutschlandOM Partners DeutschlandOM Partners Deutschland- OM Partners Nederland OM Partners Nederland OM Partners Nederland OM Partners Nederland ---- OM Partners USAOM Partners USAOM Partners USAOM Partners USA- OM Partners UKOM Partners UKOM Partners UKOM Partners UK ---- OM Partners AsiaOM Partners AsiaOM Partners AsiaOM Partners Asia

The OM Partners Group: International StructureThe OM Partners Group: International StructureThe OM Partners Group: International StructureThe OM Partners Group: International Structure


The OM Partners Group: Business PartnersThe OM Partners Group: Business PartnersThe OM Partners Group: Business PartnersThe OM Partners Group: Business Partners

Integration and consulting partnersIntegration and consulting partnersIntegration and consulting partnersIntegration and consulting partners- AccentureAccentureAccentureAccenture- CapgeminiCapgeminiCapgeminiCapgemini- TietoTietoTietoTieto- Vest CompanyVest CompanyVest CompanyVest Company- Wipro TechnologiesWipro TechnologiesWipro TechnologiesWipro Technologies- …………

Solution partnersSolution partnersSolution partnersSolution partners- Radar AutomationRadar AutomationRadar AutomationRadar Automation- OrtecOrtecOrtecOrtec

Software integration withSoftware integration withSoftware integration withSoftware integration with- OracleOracleOracleOracle- SAPSAPSAPSAP- AICOMPAICOMPAICOMPAICOMP- Solarsoft Packaging SystemsSolarsoft Packaging SystemsSolarsoft Packaging SystemsSolarsoft Packaging Systems- Business Objects (Crystal Reports) Business Objects (Crystal Reports) Business Objects (Crystal Reports) Business Objects (Crystal Reports) - MapInfoMapInfoMapInfoMapInfo


Mill ProductsMill ProductsMill ProductsMill Products

Semi ProcessSemi ProcessSemi ProcessSemi Process

The OM Partners Group: Focus IndustriesThe OM Partners Group: Focus IndustriesThe OM Partners Group: Focus IndustriesThe OM Partners Group: Focus Industries

Metals, plastics, flooring,Metals, plastics, flooring,Metals, plastics, flooring,Metals, plastics, flooring, …………Corrugated and solid board, paperCorrugated and solid board, paperCorrugated and solid board, paperCorrugated and solid board, paper

Chemicals, pharmaceuticals, starch, Chemicals, pharmaceuticals, starch, Chemicals, pharmaceuticals, starch, Chemicals, pharmaceuticals, starch, ………… Consumer goods, food and beverage, dairyConsumer goods, food and beverage, dairyConsumer goods, food and beverage, dairyConsumer goods, food and beverage, dairy…………


The OM Partners Group: Some of our customersThe OM Partners Group: Some of our customersThe OM Partners Group: Some of our customersThe OM Partners Group: Some of our customers…………


Our added value to your supply chainOur added value to your supply chainOur added value to your supply chainOur added value to your supply chain…………

VISIBILITY

AGILITY

PROFITABILITY


Overview Planning processes in OMP PlusOverview Planning processes in OMP PlusOverview Planning processes in OMP PlusOverview Planning processes in OMP Plus

SupplySupplySupplySupply DemandDemandDemandDemandManufacturingManufacturingManufacturingManufacturing DistributionDistributionDistributionDistribution

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Inventory Optimization & Product Portfolio OptimizationInventory Optimization & Product Portfolio OptimizationInventory Optimization & Product Portfolio OptimizationInventory Optimization & Product Portfolio OptimizationInventory Optimization & Product Portfolio OptimizationInventory Optimization & Product Portfolio OptimizationInventory Optimization & Product Portfolio OptimizationInventory Optimization & Product Portfolio Optimization

Supply, Manufacturing, Loading & Transport SchedulingSupply, Manufacturing, Loading & Transport SchedulingSupply, Manufacturing, Loading & Transport SchedulingSupply, Manufacturing, Loading & Transport SchedulingSupply, Manufacturing, Loading & Transport SchedulingSupply, Manufacturing, Loading & Transport SchedulingSupply, Manufacturing, Loading & Transport SchedulingSupply, Manufacturing, Loading & Transport Scheduling

Order Management,Order Management,Order Management,Order Management,AllocationAllocationAllocationAllocation

& Promising& Promising& Promising& Promising



ForecastingForecastingForecastingForecastingForecastingForecastingForecastingForecasting

Supply Chain Network DesignSupply Chain Network DesignSupply Chain Network DesignSupply Chain Network DesignSupply Chain Network DesignSupply Chain Network DesignSupply Chain Network DesignSupply Chain Network Design

Sales & Operations PlanningSales & Operations PlanningSales & Operations PlanningSales & Operations PlanningSales & Operations PlanningSales & Operations PlanningSales & Operations PlanningSales & Operations Planning

Supply, Manufacturing, DRP & Transport PlanningSupply, Manufacturing, DRP & Transport PlanningSupply, Manufacturing, DRP & Transport PlanningSupply, Manufacturing, DRP & Transport PlanningSupply, Manufacturing, DRP & Transport PlanningSupply, Manufacturing, DRP & Transport PlanningSupply, Manufacturing, DRP & Transport PlanningSupply, Manufacturing, DRP & Transport Planning












MultiMultiMultiMulti----LanguageLanguageLanguageLanguage

MultiMultiMultiMulti----SiteSiteSiteSite

In memory integrationIn memory integrationIn memory integrationIn memory integration

MultiMultiMultiMulti----UserUserUserUser

Common Data ModelCommon Data ModelCommon Data ModelCommon Data Model

Central databaseCentral databaseCentral databaseCentral database


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Supported by only one tool… OMP Plus

ModularModularModularModular

OMP Plus: Taking Integration To The Next LevelOMP Plus: Taking Integration To The Next LevelOMP Plus: Taking Integration To The Next LevelOMP Plus: Taking Integration To The Next Level


Values Values Values Values

- VisibilityVisibilityVisibilityVisibility

- AgilityAgilityAgilityAgility

- ProfitabilityProfitabilityProfitabilityProfitability

Our Solutions = Software Products + Services + Commitment

Our Commitment =

To make it work To keep it running

The OM Partners The OM Partners The OM Partners The OM Partners Solution: more than just softwareSolution: more than just softwareSolution: more than just softwareSolution: more than just software…………

Services Services Services Services

- Business consultancyBusiness consultancyBusiness consultancyBusiness consultancy

- ImplementationImplementationImplementationImplementation

- Support ServicesSupport ServicesSupport ServicesSupport Services



The OM Partners Group The OM Partners Group The OM Partners Group The OM Partners Group - Who we areWho we areWho we areWho we are- What we doWhat we doWhat we doWhat we do



Sales & Operations PlanningSales & Operations PlanningSales & Operations PlanningSales & Operations Planning…………........


Why S&OP ? The general ideaWhy S&OP ? The general ideaWhy S&OP ? The general ideaWhy S&OP ? The general idea…………

If supply > demand:

• Rising inventories

• Declining profit margins

• Obsoletes

• …

If demand > supply:

• Suffering customer service

• Cost increases

(overtime, premium freight, …)

• Quality decrease because of rush

• …

Main goal of S&OP : balance supply & demand


………… more in detail: S&OP definition (by Thomas Wallace)more in detail: S&OP definition (by Thomas Wallace)more in detail: S&OP definition (by Thomas Wallace)more in detail: S&OP definition (by Thomas Wallace)

Sales and Operations Planning (S&OP) is a business process that Sales and Operations Planning (S&OP) is a business process that Sales and Operations Planning (S&OP) is a business process that Sales and Operations Planning (S&OP) is a business process that helps companies keep helps companies keep helps companies keep helps companies keep demand and demand and demand and demand and supply in balancesupply in balancesupply in balancesupply in balance. . . .

It does that by focusing on It does that by focusing on It does that by focusing on It does that by focusing on aggregate volumesaggregate volumesaggregate volumesaggregate volumes (product families and groups) so that mix issues (product families and groups) so that mix issues (product families and groups) so that mix issues (product families and groups) so that mix issues (individual products and customer orders) can be handled more re(individual products and customer orders) can be handled more re(individual products and customer orders) can be handled more re(individual products and customer orders) can be handled more readily. adily. adily. adily.

It occurs on a It occurs on a It occurs on a It occurs on a monthly cycle monthly cycle monthly cycle monthly cycle and displays information in both and displays information in both and displays information in both and displays information in both units and dollarsunits and dollarsunits and dollarsunits and dollars, thus it integrates , thus it integrates , thus it integrates , thus it integrates operational and financial planning. operational and financial planning. operational and financial planning. operational and financial planning.

S&OP is S&OP is S&OP is S&OP is crossfunctionalcrossfunctionalcrossfunctionalcrossfunctional, involving General Management, Sales, Operations, Finance and P, involving General Management, Sales, Operations, Finance and P, involving General Management, Sales, Operations, Finance and P, involving General Management, Sales, Operations, Finance and Product roduct roduct roduct Development. Development. Development. Development.

It occurs at It occurs at It occurs at It occurs at multiple levels multiple levels multiple levels multiple levels within the company, up to and within the company, up to and within the company, up to and within the company, up to and including the executive in charge of the including the executive in charge of the including the executive in charge of the including the executive in charge of the business unitbusiness unitbusiness unitbusiness unit, e.g. division president, business unit general manager, or CEO, e.g. division president, business unit general manager, or CEO, e.g. division president, business unit general manager, or CEO, e.g. division president, business unit general manager, or CEO of a smaller corporation. of a smaller corporation. of a smaller corporation. of a smaller corporation.

S&OP S&OP S&OP S&OP links the companylinks the companylinks the companylinks the company’’’’s Strategic Plans and Business Plan to its detailed processes s Strategic Plans and Business Plan to its detailed processes s Strategic Plans and Business Plan to its detailed processes s Strategic Plans and Business Plan to its detailed processes –––– the order the order the order the order entry, master scheduling, plant scheduling, and purchasing toolsentry, master scheduling, plant scheduling, and purchasing toolsentry, master scheduling, plant scheduling, and purchasing toolsentry, master scheduling, plant scheduling, and purchasing tools it uses to run the business on a weekit uses to run the business on a weekit uses to run the business on a weekit uses to run the business on a week----totototo----week, dayweek, dayweek, dayweek, day----totototo----day, and hourday, and hourday, and hourday, and hour----totototo----hour basis. hour basis. hour basis. hour basis.

Used properly, S&OP enables the companyUsed properly, S&OP enables the companyUsed properly, S&OP enables the companyUsed properly, S&OP enables the company’’’’s managers to view the business s managers to view the business s managers to view the business s managers to view the business holisticallyholisticallyholisticallyholistically and gives them and gives them and gives them and gives them a a a a window into the future.window into the future.window into the future.window into the future.

Source : Thomas F. Wallace, Sales & Operations Planning: The How-To Handbook 2nd edition, 2004


S&OP: GeneralS&OP: GeneralS&OP: GeneralS&OP: General

S&OP is not only / just a planning process that balances Supply S&OP is not only / just a planning process that balances Supply S&OP is not only / just a planning process that balances Supply S&OP is not only / just a planning process that balances Supply and Demand, and Demand, and Demand, and Demand, but a but a but a but a management processmanagement processmanagement processmanagement process

- Involving people from sales, operations, finance,…- With a well described process description- Following a certain workflow- Requiring quite some change management in peoples thinking

The S&OP process should be the The S&OP process should be the The S&OP process should be the The S&OP process should be the missing linkmissing linkmissing linkmissing link between between between between - The corporate business strategy - The operational day to day planning

�� A big pitfall: A big pitfall: A big pitfall: A big pitfall: Beware of Beware of Beware of Beware of ““““operationalizingoperationalizingoperationalizingoperationalizing”””” the S&OP processthe S&OP processthe S&OP processthe S&OP process

IntegrationIntegrationIntegrationIntegration with these strategic and operational planning levels with these strategic and operational planning levels with these strategic and operational planning levels with these strategic and operational planning levels - Overall consensus: is importantOverall consensus: is importantOverall consensus: is importantOverall consensus: is important


S&OP: The process descriptionS&OP: The process descriptionS&OP: The process descriptionS&OP: The process description

Data collection and preparation: - sales/marketing events- product life cycle- statistical forecasting- current performance, …

Demand review: - unconstrained forecast

Supply review: - constrained plan

Financial impact calculationReconciliation step / Pre-S&OP meeting:

- What-if analysis- SWOT analysis

Consensus meeting / Senior management review / Executive S&OP meetingCommunication of decisions

1. Collect sales and marketing information

2. Develop a demand plan

3. Generate an unconstrained consensus forecast

4. Shape the demand plan for supply

5. Make a constrained supply plan

6. Shape demand plan

7. Review the financial impact

8. Communicate the sales plan

9. Measure and communicate the plan

Typically a few weeks

TRADITIONAL SEQUENTIAL APPROACH


S&OP: The process descriptionS&OP: The process descriptionS&OP: The process descriptionS&OP: The process description

Although two typical approaches can be derived: Although two typical approaches can be derived: Although two typical approaches can be derived: Although two typical approaches can be derived:

- Spreadsheet/simulationSpreadsheet/simulationSpreadsheet/simulationSpreadsheet/simulation approachapproachapproachapproach. Flexible way to enter information. Sequential demand, supply and financial review. Trial-and-error process

- OptimizationOptimizationOptimizationOptimization approachapproachapproachapproach. Demand, supply and finance should be considered simultaneously. Precise definition of scope, constraints and objective function is required

� consistency in S&OP process. Strategic decisions can be taken into account (modeled as constraints)



The OM Partners Group The OM Partners Group The OM Partners Group The OM Partners Group - Who we areWho we areWho we areWho we are- What we doWhat we doWhat we doWhat we do



OM Partners S&OP Approach: the basic tradeOM Partners S&OP Approach: the basic tradeOM Partners S&OP Approach: the basic tradeOM Partners S&OP Approach: the basic trade----offsoffsoffsoffs

Capacity+ overtime, hiring, extra machines,

subcontracting, …- downtime, firing, …$ variable costs + direct fixed

costs

Demand+ marketing actions, price reductions, …- premium pricing, product/customer

portfolio rationalization$ sales price

Inventory+ anticipation stock accumulation- stock build-offs$ stock holding costs

Make trade-offs while maximizing value:expressed as contribution to profit, taking into account

gross margin - direct fixed costs and working capital constraints


OM Partners S&OP Approach (1)OM Partners S&OP Approach (1)OM Partners S&OP Approach (1)OM Partners S&OP Approach (1)


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Supply, Manufacturing, Loading & Transport SchedulingSupply, Manufacturing, Loading & Transport SchedulingSupply, Manufacturing, Loading & Transport SchedulingSupply, Manufacturing, Loading & Transport SchedulingSupply, Manufacturing, Loading & Transport SchedulingSupply, Manufacturing, Loading & Transport SchedulingSupply, Manufacturing, Loading & Transport SchedulingSupply, Manufacturing, Loading & Transport SchedulingOrder Management,Order Management,Order Management,Order Management,

AllocationAllocationAllocationAllocation& Promising& Promising& Promising& Promising







OMP Plus: OMP Plus: OMP Plus: OMP Plus: integrated planning levelsintegrated planning levelsintegrated planning levelsintegrated planning levels�� integration between S&OP module and:integration between S&OP module and:integration between S&OP module and:integration between S&OP module and:

- Strategic decisionsStrategic decisionsStrategic decisionsStrategic decisions- Forecasting / demand moduleForecasting / demand moduleForecasting / demand moduleForecasting / demand module- Operational (Master Planning and Scheduling) modulesOperational (Master Planning and Scheduling) modulesOperational (Master Planning and Scheduling) modulesOperational (Master Planning and Scheduling) modules

Visibility

Agility


Profitability

1. Collect sales and marketing information

2. Develop a demand plan with sales prices

Optimized forOptimized forOptimized forOptimized forhighest valuehighest valuehighest valuehighest value

3. Generate a supply and demand planoptimized for value

4. Evaluate optimized scenariosand reach a consensus



Typically a few days

INTEGRATED OMP PLUS APPROACH1. Collect sales and marketing information

2. Develop a demand plan

3. Generate an unconstrained consensus forecast

4. Shape the demand plan for supply

5. Make a constrained supply plan

6. Shape demand plan

7. Review the financial impact



Typically a few weeks

TRADITIONAL SEQUENTIAL APPROACH

The S&OP process: The S&OP process: The S&OP process: The S&OP process: optimization approachoptimization approachoptimization approachoptimization approach- Simultaneously looking at demand, supply and financeSimultaneously looking at demand, supply and financeSimultaneously looking at demand, supply and financeSimultaneously looking at demand, supply and finance- Including strategic business rulesIncluding strategic business rulesIncluding strategic business rulesIncluding strategic business rules- While maximizing value: value based planningWhile maximizing value: value based planningWhile maximizing value: value based planningWhile maximizing value: value based planning- Shorter planning / process cyclesShorter planning / process cyclesShorter planning / process cyclesShorter planning / process cycles

Agility

OM Partners S&OP Approach (2)OM Partners S&OP Approach (2)OM Partners S&OP Approach (2)OM Partners S&OP Approach (2)


OM Partners S&OP approach (3): Process descriptionOM Partners S&OP approach (3): Process descriptionOM Partners S&OP approach (3): Process descriptionOM Partners S&OP approach (3): Process description

S&OP preparationS&OP preparationS&OP preparationS&OP preparation• DemandDemandDemandDemand• SupplySupplySupplySupply• FinanceFinanceFinanceFinance• New product New product New product New product

& process& process& process& processdevelopmentdevelopmentdevelopmentdevelopment

PrPrPrPreeee----S&OP: S&OP: S&OP: S&OP: vvvvaluealuealuealue----based, integrated based, integrated based, integrated based, integrated

reconciliationreconciliationreconciliationreconciliation

Executive Executive Executive Executive S&OP meetingS&OP meetingS&OP meetingS&OP meeting

Plan Plan Plan Plan communicationcommunicationcommunicationcommunication

& execution& execution& execution& execution


S&OP process description: step 1S&OP process description: step 1S&OP process description: step 1S&OP process description: step 1


















Planning Functionality: OverviewPlanning Functionality: OverviewPlanning Functionality: OverviewPlanning Functionality: Overview



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Supply, Manufacturing, DRP & Transport PlanningSupply, Manufacturing, DRP & Transport PlanningSupply, Manufacturing, DRP & Transport PlanningSupply, Manufacturing, DRP & Transport PlanningSupply, Manufacturing, DRP & Transport PlanningSupply, Manufacturing, DRP & Transport PlanningSupply, Manufacturing, DRP & Transport PlanningSupply, Manufacturing, DRP & Transport PlanningERPERPERPERP

& & & & MESMESMESMES

ERPERPERPERP& & & &

MESMESMESMES

OMP FEEDBACK MANAGEROMP FEEDBACK MANAGEROMP FEEDBACK MANAGEROMP FEEDBACK MANAGEROMP FEEDBACK MANAGEROMP FEEDBACK MANAGEROMP FEEDBACK MANAGEROMP FEEDBACK MANAGER






Step 1a : Integrated Demand preparationStep 1a : Integrated Demand preparationStep 1a : Integrated Demand preparationStep 1a : Integrated Demand preparation

ERPERPERPERP& & & &

MESMESMESMES

ERPERPERPERP& & & &

MESMESMESMES



ForecastingForecastingForecastingForecastingForecastingForecastingForecastingForecastingUnconstrained Unconstrained Unconstrained Unconstrained

forecastforecastforecastforecast





Sales Sales Sales Sales historyhistoryhistoryhistory

Visibility

Forecasting: Forecasting: Forecasting: Forecasting:

Statistical fcst

PLC mgmt

Promotion mgmt

Forecasting: Forecasting: Forecasting: Forecasting:

Statistical fcst

PLC mgmt

Promotion mgmt

Sales pricesSales pricesSales pricesSales prices


Integrated Forecasting / S&OP ViewIntegrated Forecasting / S&OP ViewIntegrated Forecasting / S&OP ViewIntegrated Forecasting / S&OP View

Generate unconstrained Generate unconstrained Generate unconstrained Generate unconstrained S&OP forecastS&OP forecastS&OP forecastS&OP forecast

S&OP PyramidS&OP PyramidS&OP PyramidS&OP Pyramid Forecast graph Forecast graph Forecast graph Forecast graph of selectionof selectionof selectionof selection

Past MonthsPast MonthsPast MonthsPast MonthsYear TotalsYear TotalsYear TotalsYear Totals






Step 1b : Integrated (operational) Supply preparationStep 1b : Integrated (operational) Supply preparationStep 1b : Integrated (operational) Supply preparationStep 1b : Integrated (operational) Supply preparation

ERPERPERPERP& & & &

MESMESMESMES

ERPERPERPERP& & & &

MESMESMESMES




Unconstrained Unconstrained Unconstrained Unconstrained forecastforecastforecastforecast



Sales & Operations PlanningSales & Operations PlanningSales & Operations PlanningSales & Operations Planning

-Planning Model Planning Model Planning Model Planning Model (prod., transp., purch. and subcontr. capabilities)

- Supply costsSupply costsSupply costsSupply costs



- Supply costsSupply costsSupply costsSupply costs

Visibility

Plan + stockPlan + stockPlan + stockPlan + stock

ScheduleScheduleScheduleSchedule


Supply, Manufacturing, DRP & Transport PlanningSupply, Manufacturing, DRP & Transport PlanningSupply, Manufacturing, DRP & Transport PlanningSupply, Manufacturing, DRP & Transport PlanningSupply, Manufacturing, DRP & Transport PlanningSupply, Manufacturing, DRP & Transport PlanningSupply, Manufacturing, DRP & Transport PlanningSupply, Manufacturing, DRP & Transport PlanningSupply, Manufacturing, DRP & Transport PlanningSupply, Manufacturing, DRP & Transport PlanningSupply, Manufacturing, DRP & Transport PlanningSupply, Manufacturing, DRP & Transport PlanningSupply, Manufacturing, DRP & Transport PlanningSupply, Manufacturing, DRP & Transport PlanningSupply, Manufacturing, DRP & Transport PlanningSupply, Manufacturing, DRP & Transport Planning




Zoom in on supply planning : integrated with all planning levelsZoom in on supply planning : integrated with all planning levelsZoom in on supply planning : integrated with all planning levelsZoom in on supply planning : integrated with all planning levels

Days Weeks Months

Scheduling

S&OP

MPS/deployment


Integrated Supply / S&OP ViewIntegrated Supply / S&OP ViewIntegrated Supply / S&OP ViewIntegrated Supply / S&OP View

OM Partners © Proprietary and Confidential

Month/Quarter bucketsMonth/Quarter bucketsMonth/Quarter bucketsMonth/Quarter buckets

Scheduled productions are Scheduled productions are Scheduled productions are Scheduled productions are input for S&OP cycleinput for S&OP cycleinput for S&OP cycleinput for S&OP cycle

S&OP Plan lineS&OP Plan lineS&OP Plan lineS&OP Plan line

Campaign GanttCampaign GanttCampaign GanttCampaign Gantt






Step 1b : Integrated (strategic) Supply preparationStep 1b : Integrated (strategic) Supply preparationStep 1b : Integrated (strategic) Supply preparationStep 1b : Integrated (strategic) Supply preparation

ERPERPERPERP& & & &

MESMESMESMES

ERPERPERPERP& & & &

MESMESMESMES







LT capacity & Location decisionsLT capacity & Location decisionsLT capacity & Location decisionsLT capacity & Location decisions


Safety StocksSafety StocksSafety StocksSafety Stocks

Visibility





- Supply costs / Sales pricesSupply costs / Sales pricesSupply costs / Sales pricesSupply costs / Sales prices



- Supply costs / Sales pricesSupply costs / Sales pricesSupply costs / Sales pricesSupply costs / Sales prices







Integrated Strategic balancing / S&OP ViewIntegrated Strategic balancing / S&OP ViewIntegrated Strategic balancing / S&OP ViewIntegrated Strategic balancing / S&OP View

S&OP for 3 plants

Demand & Supply plan

for Plant A

(1 Year Aggr. Bucket)

Theoretically available capacity on machine A1

Used capacity on machine A1 (95%)

Strategic Restricted Capacity for machine A1 (based on

strategic balancing between plants)

Compared to used capacity on machine A1

(104%)











Step 2 : PrStep 2 : PrStep 2 : PrStep 2 : Preeee----S&OP: valueS&OP: valueS&OP: valueS&OP: value----based, ibased, ibased, ibased, integrated reconciliationntegrated reconciliationntegrated reconciliationntegrated reconciliation

Review Review Review Review past performancepast performancepast performancepast performance: analyze gaps with previous plan: analyze gaps with previous plan: analyze gaps with previous plan: analyze gaps with previous plan

Make Make Make Make base scenariobase scenariobase scenariobase scenario- Take unconstrained forecast Take unconstrained forecast Take unconstrained forecast Take unconstrained forecast - Apply minimal supply constraintsApply minimal supply constraintsApply minimal supply constraintsApply minimal supply constraints

Make Make Make Make gap analysisgap analysisgap analysisgap analysis- Compare base scenario with previous S&OP plan, corporate targetsCompare base scenario with previous S&OP plan, corporate targetsCompare base scenario with previous S&OP plan, corporate targetsCompare base scenario with previous S&OP plan, corporate targets, , , , …………

Make Make Make Make alternative demand and supply scenariosalternative demand and supply scenariosalternative demand and supply scenariosalternative demand and supply scenarios based on typical S&OP tradebased on typical S&OP tradebased on typical S&OP tradebased on typical S&OP trade----offsoffsoffsoffs- Derived from base scenario and gap analysesDerived from base scenario and gap analysesDerived from base scenario and gap analysesDerived from base scenario and gap analyses- ValueValueValueValue----based optimization of each scenariobased optimization of each scenariobased optimization of each scenariobased optimization of each scenario- Demand shapingDemand shapingDemand shapingDemand shaping- Prepare KPI view on scenariosPrepare KPI view on scenariosPrepare KPI view on scenariosPrepare KPI view on scenarios

ReconcileReconcileReconcileReconcile demand, supply and finance viewsdemand, supply and finance viewsdemand, supply and finance viewsdemand, supply and finance views- Evaluate alternative scenarios Evaluate alternative scenarios Evaluate alternative scenarios Evaluate alternative scenarios - Select key scenariosSelect key scenariosSelect key scenariosSelect key scenarios

Prepare executive reviewPrepare executive reviewPrepare executive reviewPrepare executive review

Profitability

Agility


SalesSales

Variablecosts

Variablecosts

Percentage

capital costs

Percentage

capital costs

Total investment

Total investment

WorkingCapital

WorkingCapital

FixedcostsFixedcosts

Permanent InvestmentsPermanent Investments

EBITEBIT

Capitalcosts

Capitalcosts

Contributionmargin

Contributionmargin

EBIT after

capital costs

EBIT after

capital costs

(-) variable costs, incl. non-financial stock costs(-) variable costs, incl. non-financial stock costs

(-) financial stock costssubject to: working capital constraints

(-) financial stock costssubject to: working capital constraints

S&OP objective function S&OP objective function S&OP objective function S&OP objective function Value driver treeValue driver treeValue driver treeValue driver tree

�Select the most profitable demand

�Select most cost efficient supply, production, transport, stocking

�E.g. optimize stock levels,payment terms in different markets, …

Relationship with Relationship with Relationship with Relationship with S&OP decisionsS&OP decisionsS&OP decisionsS&OP decisions

(+) sales prices(+) sales prices

(-) only direct fixed costs(-) only direct fixed costs�Fixed costs directly linked

to S&OP decisions�Non-direct fixed costs

should be left out and not converted into variable costs

Value Based OptimizationValue Based OptimizationValue Based OptimizationValue Based Optimization







Value based optimizationValue based optimizationValue based optimizationValue based optimization

ERPERPERPERP& & & &

MESMESMESMES

ERPERPERPERP& & & &

MESMESMESMES












Profitability




Limited Capacity vs. Capacity with extra shiftLimited Capacity vs. Capacity with extra shiftLimited Capacity vs. Capacity with extra shiftLimited Capacity vs. Capacity with extra shift

Solver Strategies: Scenario ManagementSolver Strategies: Scenario ManagementSolver Strategies: Scenario ManagementSolver Strategies: Scenario Management

With extra shiftWith extra shiftWith extra shiftWith extra shift

Base scenarioBase scenarioBase scenarioBase scenario

Shift Base











Step 3 : Executive S&OP meetingStep 3 : Executive S&OP meetingStep 3 : Executive S&OP meetingStep 3 : Executive S&OP meeting

Review Review Review Review past performancepast performancepast performancepast performance

Decision makingDecision makingDecision makingDecision making on key scenarioson key scenarioson key scenarioson key scenarios- Validation based on KPIs, assumptions and SWOT analysisValidation based on KPIs, assumptions and SWOT analysisValidation based on KPIs, assumptions and SWOT analysisValidation based on KPIs, assumptions and SWOT analysis- TieTieTieTie----breaking when prebreaking when prebreaking when prebreaking when pre----S&OP was unable to reach consensusS&OP was unable to reach consensusS&OP was unable to reach consensusS&OP was unable to reach consensus- Check alignment with business plan / budget & corporate strategyCheck alignment with business plan / budget & corporate strategyCheck alignment with business plan / budget & corporate strategyCheck alignment with business plan / budget & corporate strategy

Define Define Define Define action planaction planaction planaction plan- Actions on gaps between plan and performanceActions on gaps between plan and performanceActions on gaps between plan and performanceActions on gaps between plan and performance- Actions on consensus planActions on consensus planActions on consensus planActions on consensus plan- WhatWhatWhatWhat----if scenarios for evaluation in next S&OP cyclesif scenarios for evaluation in next S&OP cyclesif scenarios for evaluation in next S&OP cyclesif scenarios for evaluation in next S&OP cycles

WhoWhoWhoWho- Senior managers from supply, sales and financeSenior managers from supply, sales and financeSenior managers from supply, sales and financeSenior managers from supply, sales and finance- KeyKeyKeyKey----users from supply, sales and financeusers from supply, sales and financeusers from supply, sales and financeusers from supply, sales and finance

Agility

Visibility


KPI report: Scenario ManagementKPI report: Scenario ManagementKPI report: Scenario ManagementKPI report: Scenario Management

Different ScenariosDifferent ScenariosDifferent ScenariosDifferent Scenarios

Different KPIDifferent KPIDifferent KPIDifferent KPI’’’’ssss

ScenarioScenarioScenarioScenarioComparison chartComparison chartComparison chartComparison chart


KPI report: Capacity reportKPI report: Capacity reportKPI report: Capacity reportKPI report: Capacity report

Different KPIDifferent KPIDifferent KPIDifferent KPI’’’’ssss


KPI report: Service Levels and Inventory reportKPI report: Service Levels and Inventory reportKPI report: Service Levels and Inventory reportKPI report: Service Levels and Inventory report

KPI AlertsKPI AlertsKPI AlertsKPI Alerts


OMP Reporter: Crystal Reports and Scenario ManagementOMP Reporter: Crystal Reports and Scenario ManagementOMP Reporter: Crystal Reports and Scenario ManagementOMP Reporter: Crystal Reports and Scenario Management


OMP Reporter : OLAP cubesOMP Reporter : OLAP cubesOMP Reporter : OLAP cubesOMP Reporter : OLAP cubes

OLAP Cubes OLAP Cubes OLAP Cubes OLAP Cubes - An OLAP An OLAP An OLAP An OLAP (OnLine Analytical Processing)(OnLine Analytical Processing)(OnLine Analytical Processing)(OnLine Analytical Processing) Cube is a data structure that allows fast and Cube is a data structure that allows fast and Cube is a data structure that allows fast and Cube is a data structure that allows fast and

flexible analysis of dataflexible analysis of dataflexible analysis of dataflexible analysis of data- Based on a set of predefined Based on a set of predefined Based on a set of predefined Based on a set of predefined ““““measuresmeasuresmeasuresmeasures”””” categorized by dimensionscategorized by dimensionscategorized by dimensionscategorized by dimensions- The tool allows to view or The tool allows to view or The tool allows to view or The tool allows to view or ““““pivotpivotpivotpivot”””” the data in numerous waysthe data in numerous waysthe data in numerous waysthe data in numerous ways















Step 4: Integrated communicationStep 4: Integrated communicationStep 4: Integrated communicationStep 4: Integrated communication

ERPERPERPERP& & & &

MESMESMESMES

ERPERPERPERP& & & &

MESMESMESMES







Plan +

stock






Schedule

Constrained Constrained Constrained Constrained forecastforecastforecastforecastOperations plan Operations plan Operations plan Operations plan

• SourcingSourcingSourcingSourcing• Stock targetsStock targetsStock targetsStock targets• Capacity decisionsCapacity decisionsCapacity decisionsCapacity decisions

Visibility

SKU constrainedSKU constrainedSKU constrainedSKU constrainedforecastforecastforecastforecast



Zoom in on supply planning : integrated with all planning levelsZoom in on supply planning : integrated with all planning levelsZoom in on supply planning : integrated with all planning levelsZoom in on supply planning : integrated with all planning levels

Days Weeks Months

Scheduling

S&OP

MPS/deployment


Integrated S&OP/Supply (MPS) viewIntegrated S&OP/Supply (MPS) viewIntegrated S&OP/Supply (MPS) viewIntegrated S&OP/Supply (MPS) view

S&OP view with S&OP view with S&OP view with S&OP view with monthly aggregated monthly aggregated monthly aggregated monthly aggregated

buckets and buckets and buckets and buckets and product family levelproduct family levelproduct family levelproduct family level

MPS view with MPS view with MPS view with MPS view with weekly buckets and weekly buckets and weekly buckets and weekly buckets and

product levelproduct levelproduct levelproduct level


S&OP process descriptionS&OP process descriptionS&OP process descriptionS&OP process description









S&OP in OMP PlusS&OP in OMP PlusS&OP in OMP PlusS&OP in OMP PlusS&OP in OMP PlusS&OP in OMP PlusS&OP in OMP PlusS&OP in OMP Plus

S&OP with OMP Plus in a mixed vendor landscape (eg. SAP)S&OP with OMP Plus in a mixed vendor landscape (eg. SAP)S&OP with OMP Plus in a mixed vendor landscape (eg. SAP)S&OP with OMP Plus in a mixed vendor landscape (eg. SAP)


SAP R/3SAP R/3SAP R/3SAP R/3SAP R/3SAP R/3SAP R/3SAP R/3

APOAPO

DPDPDPDPDPDPDPDP

Historical sales, distribution Historical sales, distribution Historical sales, distribution Historical sales, distribution and production dataand production dataand production dataand production data

Forecast and demand plan Forecast and demand plan Forecast and demand plan Forecast and demand plan

SNPSNPSNPSNPSNPSNPSNPSNP

PP/DSPP/DSPP/DSPP/DSPP/DSPP/DSPP/DSPP/DS

Supply plan on finished good level Supply plan on finished good level Supply plan on finished good level Supply plan on finished good level

Short term supply scheduleShort term supply scheduleShort term supply scheduleShort term supply schedule

• Fragmented processes

• S&OP integrated with forecasting, planning

and scheduling

• Consolidated, Intuitive Forecasting, Planning

and Scheduling views

• Scenario Management

• Powerful End to End Optimization Engines

Supporting an integrated and collaborative S&OP Process

• Views including Historical Plan/Realization data









AgilityVisibility Profitability


Ope

ratio

nal

Ope

ratio

nal

Ope

ratio

nal

Ope

ratio

nal

Tact

ical

Tact

ical

Tact

ical

Tact

ical

Stra

tegi

cSt

rate

gic

Stra

tegi

cSt

rate

gic


Supply, Manufacturing, Loading & Transport SchedulingSupply, Manufacturing, Loading & Transport SchedulingSupply, Manufacturing, Loading & Transport SchedulingSupply, Manufacturing, Loading & Transport SchedulingSupply, Manufacturing, Loading & Transport SchedulingSupply, Manufacturing, Loading & Transport SchedulingSupply, Manufacturing, Loading & Transport SchedulingSupply, Manufacturing, Loading & Transport SchedulingOrder Management,Order Management,Order Management,Order Management,

AllocationAllocationAllocationAllocation& Promising& Promising& Promising& Promising







OMP Plus as an S&OP OMP Plus as an S&OP OMP Plus as an S&OP OMP Plus as an S&OP Solution: more than just software Solution: more than just software Solution: more than just software Solution: more than just software

- p. 54 -


Thank youThank youThank youThank you

[email protected]

www.ompartners.com

Date post:	23-Nov-2014
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