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

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Aligning your business planning involves a focus on people, process, and technology for proper forecasting and planning.
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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
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Page 1: S&OP A Better Way to Run Your Business- Eyeon Solutions

1 © 2014 Steelwedge Software, Inc. Confidential.

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

Page 2: S&OP A Better Way to Run Your Business- Eyeon Solutions

2 © 2014 Steelwedge Software, Inc. Confidential.

Speakers

Danny Smith, VP Industries

Steelwedge Software

Jan Veerman, Managing Partner

EyeOn Solutions

Page 3: S&OP A Better Way to Run Your Business- Eyeon Solutions

3 © 2014 Steelwedge Software, Inc. Confidential.

Agenda

•  S&OP: Current State and Challenges

•  Realizing the Business Value from S&OP

•  A Call to Action

Page 4: S&OP A Better Way to Run Your Business- Eyeon Solutions

4 © 2014 Steelwedge Software, Inc. Confidential.

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

Page 5: S&OP A Better Way to Run Your Business- Eyeon Solutions

5 © 2014 Steelwedge Software, Inc. Confidential.

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

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

Page 6: S&OP A Better Way to Run Your Business- Eyeon Solutions

6 © 2014 Steelwedge Software, Inc. Confidential.

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?

Page 7: S&OP A Better Way to Run Your Business- Eyeon Solutions

7 © 2014 Steelwedge Software, Inc. Confidential.

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

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

Why aren’t executives

owning the S&OP process?

Page 8: S&OP A Better Way to Run Your Business- Eyeon Solutions

8 © 2014 Steelwedge Software, Inc. Confidential.

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

16.7%

25.4%

29.4%

35.1%

45.0%

57.4%

55.7%

57.3%

54.2%

46.1%

25.9%

18.9%

13.4%

10.7%

8.9%

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

Page 9: S&OP A Better Way to Run Your Business- Eyeon Solutions

9 © 2014 Steelwedge Software, Inc. Confidential.

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

Page 10: S&OP A Better Way to Run Your Business- Eyeon Solutions

10 © 2014 Steelwedge Software, Inc. Confidential.

34.2%

25.7% 28.4%

46.7% 44.4%

50.2%

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

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

Page 11: S&OP A Better Way to Run Your Business- Eyeon Solutions

11 © 2014 Steelwedge Software, Inc. Confidential.

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

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

32.2%

14.7%

8.4%

1.7%

Below Average

Only Adequate

Excellent

World Class

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

Page 12: S&OP A Better Way to Run Your Business- Eyeon Solutions

12 © 2014 Steelwedge Software, Inc. Confidential.

Agenda

•  S&OP: Current State and Challenges

•  Realizing the Business Value from S&OP

•  A Call to Action

Page 13: S&OP A Better Way to Run Your Business- Eyeon Solutions

13 © 2014 Steelwedge Software, Inc. Confidential.

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

People (Collaborate)

Process (Automate/Monitor)

Technology/Data (Manage)

Page 14: S&OP A Better Way to Run Your Business- Eyeon Solutions

14 © 2014 Steelwedge Software, Inc. Confidential.

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

Page 15: S&OP A Better Way to Run Your Business- Eyeon Solutions

15 © 2014 Steelwedge Software, Inc. Confidential.

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

Page 16: S&OP A Better Way to Run Your Business- Eyeon Solutions

16 © 2014 Steelwedge Software, Inc. Confidential.

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

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

83% still using spreadsheets or

limited functional-silo tools

Page 17: S&OP A Better Way to Run Your Business- Eyeon Solutions

17 © 2014 Steelwedge Software, Inc. Confidential.

Industry Data

S&OP

Ground Reality: the Difficulties of Supporting the Process

Marketing

Operations

Finance

Consolidation Review, Overrides Consensus Process

Pre-ES&OP

Sales

Manual

Complex

Security Risk

Not Scalable

Does this Give Executives an Agile Decision Making Process?

Page 18: S&OP A Better Way to Run Your Business- Eyeon Solutions

18 © 2014 Steelwedge Software, Inc. Confidential.

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

Time

L1

L2

L3

L4

“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

Q4

Valu

e

Accelerated Time to Value

Step Change Maturity & Performance

Avoid Process Failure

Page 19: S&OP A Better Way to Run Your Business- Eyeon Solutions

19 © 2014 Steelwedge Software, Inc. Confidential.

Agenda

•  S&OP: Current State and Challenges

•  Realizing the Business Value from S&OP

•  A Call to Action

Page 20: S&OP A Better Way to Run Your Business- Eyeon Solutions

20 © 2014 Steelwedge Software, Inc. Confidential.

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

Page 21: S&OP A Better Way to Run Your Business- Eyeon Solutions

21 © 2014 Steelwedge Software, Inc. Confidential.

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

Page 22: S&OP A Better Way to Run Your Business- Eyeon Solutions

22 © 2014 Steelwedge Software, Inc. Confidential.

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.

Page 23: S&OP A Better Way to Run Your Business- Eyeon Solutions

23 © 2014 Steelwedge Software, Inc. Confidential.

EyeOn offering

Research & Publications

Consulting

Expert Sessions / Idea Labs

Benchmarks

Teaching Interim

Outsourcing

Industry Networks

4 5

6

e 1

2 3

Page 24: S&OP A Better Way to Run Your Business- Eyeon Solutions

24 © 2014 Steelwedge Software, Inc. Confidential.

Selection of customers

High Tech Food / FMCG Process Life Science Zorg

Other

Page 25: S&OP A Better Way to Run Your Business- Eyeon Solutions

25 © 2014 Steelwedge Software, Inc. Confidential.

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)

Page 26: S&OP A Better Way to Run Your Business- Eyeon Solutions

26 © 2014 Steelwedge Software, Inc. Confidential.

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

Page 27: S&OP A Better Way to Run Your Business- Eyeon Solutions

27 © 2014 Steelwedge Software, Inc. Confidential.

S&OP the cure for all diseases?

GDP$growth$S&OP$publica5ons$

Page 28: S&OP A Better Way to Run Your Business- Eyeon Solutions

28 © 2014 Steelwedge Software, Inc. Confidential.

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.

36%

47%

48%

Sales

Finance

Manufacturing

44%

45%

47%

66%

66%

Demand Planning

Inventory Planning

Supply Planning

Supply / Demand Match

Performance Review

Page 29: S&OP A Better Way to Run Your Business- Eyeon Solutions

29 © 2014 Steelwedge Software, Inc. Confidential.

Benefits to be expected from S&OP

30%  

32%  

32%  

34%  

36%  

38%  

42%  

50%  

57%  

59%  

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

Page 30: S&OP A Better Way to Run Your Business- Eyeon Solutions

30 © 2014 Steelwedge Software, Inc. Confidential.

DEMAND SUPPLY

Stock

Stock Levels

Forecast Accuracy

Factory Performance (CLIP / RLIP / LAP)

Service Level (On Time In Full)

1 2

3

4

4 most important performance indicators S&OP process

Page 31: S&OP A Better Way to Run Your Business- Eyeon Solutions

31 © 2014 Steelwedge Software, Inc. Confidential.

Trends and movements in planning: Technology driven

Page 32: S&OP A Better Way to Run Your Business- Eyeon Solutions

32 © 2014 Steelwedge Software, Inc. Confidential.

Large variety in Planning tools

•  Traditional ERP vendors •  Operational focus •  Rigid

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

•  S&OP solutions

Page 33: S&OP A Better Way to Run Your Business- Eyeon Solutions

33 © 2014 Steelwedge Software, Inc. Confidential.

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

Page 34: S&OP A Better Way to Run Your Business- Eyeon Solutions

34 © 2014 Steelwedge Software, Inc. Confidential.

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