June 12th S&OP Webinar by Supply Chain Insights, LLC

TM

S&OP: State of the Union

June 2013

Supply Chain Insights LLC Copyright © 2013, p. 2#sciwebinar

Presenters

Benji GreenAvaya

Lora CecereSupply Chain

Insights

Jack LyonEnterasys


Supply Chain Insights is focused on delivering independent, actionable and objective advice for supply chain leaders. A company dedicated to research, turn to us when you want the latest insights on supply chain trends, technologies to know and metrics that matter.

About Us


Sales & Operations Planning:

State of the UnionJack Lyon Vice President, OperationsEnterasys NetworksJune 2013


• Network Powered by INNOVATION• Delivering the Highest Quality User EXPERIENCE• Guiding Principles PEOPLE TECHNOLGY SERVICE• Solutions WI-FI MOBILITY DATA CENTER UNIFIED

MANAGEMENT

5

Leader in Wired and Wireless Network Infrastructure and Security Solutions


Getting To Mature S&OP

• Journey started in 2004• Faced a number of challenges• Collaborative approach• Tools played a big part• Short time to measured success• Setting up for the long term

Enterasys in the Cloud: Quote to Demand

6


• Stay committed to the process– Over communicate with

shareholders• Set aggressive targets

– post mortems & lessons learned• Continuous Improvement

– Drive initiatives to move the process forward

7

Driving Towards Orchestrating


CUSTOMERSTHERE IS NOTHING MORE IMPORTANT THAN OUR

OUR BELIEF


• Avaya is the global business communications expert delivering open and flexible communication systems, that transform the way people collaborate to enhance performance and enable growth for companies small to large at lowest possible total cost of ownership.

Who is Avaya?

UnifiedCommunications

Call Center

Data Networking

Services & Maintenance

Small & Medium Enterprise

Enterprise

Gov Solutions Midsize Enterprise


Future State• BIC FA at 85+%• Balanced Scorecard Fact-Based Decision

Making with Aligned Incentives• Fully Integrated Supplier & Distributor Co-

Planning & Advanced Funnel Analytics• Simplified and controlled Portfolio• Kinaxis driven Scenario Modeling, Decision

Support, and Alert System

49FY13-15 Strategic Planning Avaya – Confidential & Proprietary -- For Internal Use Only

S&OP Maturity Model

Key Takeaways

• S&OP Maturity measured across people, processes, and tools

• Customer collaboration is significant opportunity to improve S&OP process & results

• Transition management (customer\product)

Organization

SupplierCollaboration

CustomerCollaboration

DemandDetermination

Tools &Enablers

Outputs

Measurements

Level 1Non-existent

Level 2Developing

Level 3Basic

Level 4Advanced

Level 5World-class

No forecastaccountability

Forecast availabilitybased on past supply

Multiple forecasts basedon historical data andcurrent inventory levels

Based only on historicalsales and simple allocationto functional areas

No data integrity,simple tools;no data mining

Forecasts notdisseminated

Forecast accuracy below50% or not measured

Centrally managed forecastingsystem with decentralizedadjustment process

Vendor managed inventory(VMI), Profit Sharing

Customer collaboration(CPFR)

Consensus demand plan based onkey account forecasts and multi-tierforecasting

Future intelligence historicallybased

Consensus forecasts used in related planning

Defined composite matrix/Score card that is aligned withsupply chain roles

Bes

t pra

ctic

es

AVAYA

AVAYA

AVAYA

AVAYA

AVAYA

AVAYA

AVAYA Theater FA, Exp

SFDC Utilizaton

DistyReplen Demand

ShapingAcct TrsMngmt

VMI&PrftShare

Common Incentive

ConsensFcst

KinaxisRR

Risk Mngmt

Bottom’s Up Plan

Metric Optimize

COE

SupplierCo-Plan

S&OP Transfo

rmatio

n

Environment

• Limited funnel visibility @ code level• Lack of Disty Collaborative Fcst• Short customer lead-times; long supplier

lead-times• Increased Asia sourcing & migration to

ocean in order to lower costs• Excessive # of SKU’s• Portfolio Redundancy• High-mix/low-volume business• Difficult transition management

Aggressive Portfolio Simplification - Reduce Code Count by 50%, - Eliminate Portfolio Redundancy - Component Standardization

Accelerate Forward Visibility - Increase SFDC Utilization - Distributor Co-Planning - Advanced Funnel Analytics

Integrated S&OP IT Platform - Single Source of Data - Multi-variable Statistical modeling - Integrated Supply/Demand Scenario Analysis

Robust Transition Management - Sales Supporting ‘Center of Excellence’ - Top 50 Customer Transition Roadmap - Partner & Customer Demand Shaping

Begin with the End in Mind?

Dynamic Supply Flexibility - CM Component Flexibility Model - Vendor Managed Inventory & Logistics Hubbing - Kinaxis EtoE component to Disty Inventory visibility


Developing S&OP Agility?

Understand the Risk!

• Forecast are wrong, which way is the greatest volatility• Operational risk vary dramatically by code

Operational Impact• Expedited Freight• Inventory Costs • Carrying Costs• PCR Roadmap

• RFMV Risk• Mfg Transitions

• Supply Flexibility• Customer Sat• Sales Margin

Demand Volatility:• Forecast Accuracy• Demand Volatility

• Market Trend• Large Bids• Lifecycle

• Order Fill to Track• Disty Sales Out

• Disty Days On Hand

How much and which direction might my forecast be wrong?!

Which way and how much can I afford to be wrong?!

Develop a Playbook!

• What risk mitigation strategy’s can we deploy in advance• What actions/levers can drive recovery if we’re wrong?


Study Overview


Study Results


Build with the End in Mind


Greatest Alignment Opportunity:Sales & Operations


Gaps


Top S&OP Challenge


Operating Margin Is Among Most Tracked and Used to Meet Corporate Goals


• Important, but progress is inching along

• S&OP improves agility and alignment

• The understanding of the executive team is a barrier

Conclusion


Our Focus

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PAST SUPPLY CHAIN INDEX WEBINARS:

AVAILABLE ON DEMAND• From September 24, 2012:

The Supply Chain Index, 20 Years in the Making: A Focus on Process Industries

• From October 26, 2012: The Supply Chain Index, 20 Years in the Making: A Focus on Discrete Industries

Webinars

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UPCOMING WEBINARS

• June 27th: Supply Chain Index III, Technology/ Apparel/

• July 11th: Big Data Supply Chains and the Future of Analytics

• August 15th: State of Supply Chain Talent: Missing Link in the Supply Chain

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June 12th S&OP Webinar by Supply Chain Insights, LLC

Business