+ All Categories
Home > Documents > Sop Gartner

Sop Gartner

Date post: 02-Mar-2016
Category:
Upload: miguel-angel
View: 67 times
Download: 0 times
Share this document with a friend

of 31

Transcript
  • This presentation, including any supporting materials, is owned by Gartner, Inc. and/or its affiliates and is for the sole use of the intended Gartner audience or other authorized recipients. This presentation may contain information that is confidential, proprietary or otherwise legally protected, and it may not be further copied, distributed or publicly displayed without the express written permission of Gartner, Inc. or its affiliates. 2010 Gartner, Inc. and/or its affiliates. All rights reserved. 2010 AMR Research, Inc. | Page 1

    Jane BarrettNoha Tohamy

    Best Practices in Sales & Operations Planning

  • 2009 Gartner, Inc. and/or its affiliates. All rights reserved. Gartner is a registered trademark of Gartner, Inc. or its affiliates.__ 2

    65% of Fortune 1000

    80% ofGlobal 500

    55Conferences

    3,800CIOs

    730 Analysts Serving Clients

    in 80 Countries

    100,000IT End-User

    Inquiries

    10,000Media

    Inquiries

    2.7 MillionIT End-User

    Searches

    60,000Clients

    10,800 Client

    Enterprises

    5,500Benchmarks

    Welcome!Thank you for joining us on todays Gartner webinar.

  • 2009 Gartner, Inc. and/or its affiliates. All rights reserved. Gartner is a registered trademark of Gartner, Inc. or its affiliates.__

    Here's how to participate in today's webinar You can listen to the presentation using

    your computer's speaker system as the default (VoIP).

    Or dial the conference line by selecting Use Telephone in the webinar audio pane.

    Have a question for the presenter(s)? Type it into the Questions panewe will answer as many as time permits.

    A recording of this presentation will be sent to you within 48 hours.

    If you would like a copy of today's presentation, contact your Gartner Account Executive or gartner.com/webinars.

    Please note you may be polled during the webinar; only aggregate answers will appear.

  • This presentation, including any supporting materials, is owned by Gartner, Inc. and/or its affiliates and is for the sole use of the intended Gartner audience or other authorized recipients. This presentation may contain information that is confidential, proprietary or otherwise legally protected, and it may not be further copied, distributed or publicly displayed without the express written permission of Gartner, Inc. or its affiliates. 2010 Gartner, Inc. and/or its affiliates. All rights reserved. 2010 AMR Research, Inc. | Page 4

    Jane BarrettNoha Tohamy

    Best Practices in Sales & Operations Planning

  • Agenda

    Sales & Operations Planning: Process Best Practices Findings from 2009 study S&OP maturity The seven deadly challenges of S&OP

    Sales & Operations Planning : Technology Best practices What are the functional capabilities needed to support S&OP? Findings from 2009 Study

  • S&OP Key Research Findings

    - As the curtain closes on the recession, S&OP has gained steam

    - Performance gaps have grown

    - Metrics remain a stumbling block

    - Gap between strategy, S&OP and execution

    - Data accuracy and timeliness issues causing pain

    - Better use of technologies drives S&OP maturity

    - No clear definition of S&OP technology space

    August 2009 Study of 182 Manufacturers and Retailers

  • S&OP Process Definition Changes

    1990s Early 2000 Demand-driven Leaders

    1. Develop a demand forecast

    2. Balance demand with supply

    3. Consensus meeting4. Publish the plan

    1. Collect sales input2. Develop a forecast3. Shape demand

    consensus refinement4. Develop a constrained

    supply plan5. Review and gain

    agreement through a Consensus meeting

    6. Publish the plan

    1. Collect sales and market input2. Develop a demand plan3. Demand consensus refinement including

    financial reconciliation4. Shape demand based on what-if analysis

    on demand for supply5. Develop a constrained plan by supply6. What-if analysis by supply to determine

    trade-offs on the measurements, financials, and identify demand-shaping opportunities

    7. Review and gain agreement through a consensus meeting

    8. Publish the constrained plan9. Measure and communicate the plan

  • 65%

    55%

    53%

    48%

    48%

    47%

    46%

    46%

    42%

    41%

    40%

    38%

    28%

    36%

    37%

    35%

    38%

    38%

    32%

    34%

    32%

    36%

    Increasing revenue

    Improving forecast accuracy

    Improving new product launch

    Improving logistics planning

    Better supply planning/chedule adherence

    Improvements in the perfect order/customer service

    Capital planning and asset management `

    Improving asset utilization

    Improve translation of demand into procurementrequirements/buy-side contract needs

    Developing and executing demand shaping programs

    Reduction of inventory

    [TOP 3 Box Summary]

    The benefits are recognized, but hard to attainQ. Please rate how important each of the following business benefits are.

    Q. Please rate how well your company performs at achieving each of these benefits. PerformanceGap Score

    27%

    27%

    18%

    11%

    14%

    9%

    8%

    14%

    9%

    8%

    4%N = 182 Total Respondents

  • [TOP 3 Box Summary]

    Managing demand is still an issue for most..Q. Please rate how important each of these S&OP capabilities are to the success of your companies 2009 business strategies.

    Q. Please rate how well your company performs on each of these capabilities.

    70%

    68%

    66%

    60%

    55%

    51%

    48%

    43%

    41%

    37%

    29%

    44%

    40%

    44%

    40%

    41%

    43%

    36%

    25%

    44%

    29%

    26%

    Collect sales/market input

    Develop a demand plan

    Communicate the plan/measure effectiveness

    Review /gain agreement of total demand, supply and f inancial plan

    Use S&OP for the annual planning process

    Evaluate implications of a constrained supply plan

    Use S&OP for demand plan execution

    What-if analysis by supply to determine trade-offs o

    Publish the constrained plan

    Shape demand based on w hat-if analysis of demand

    Demand consensus refinementImportancePerformance

    26%

    28%

    23%

    19%

    14%

    9%

    12%

    18%

    -3%

    8%

    3%

    Performance Gap Score

    N = 182 Total Respondents

  • Stage IReacting

    IIAnticipating

    IIICollaborating

    IVOrchestrating

    Balance: S&OP

    Goal Development of an operational plan

    Demand and supply matching

    Profitability Demand sensing, and conscious tradeoffs for

    demand shaping to drive an optimized demand-response

    Ownership S = SalesOP = Factory capabilities

    S = Sales and Marketing Plans

    OP = Planning and factory capabilities

    S = Go to Market PlansOP = Design of demand

    driven plan, make & deliver processes

    S = Go to Market Strategies and Solutions

    OP = Translation of demand into plan, make, deliver, source and

    service strategies, with connection to execution

    Metrics Order fill rate, asset utilization, inventory

    levels

    Order fill rate, forecast error, inventory turns,

    functional costs

    Demand error, customer service, working capital,

    total costs

    Demand risk, customer service, cash flow, market share and profit

    S

    OP

    S

    OPS OP

    S OP

    Increase in Organizational Balance

    S&OP Maturity Model

    27% 40% 19% 14%

    67% of companies cannot get beyond stage 2

  • Demand maturity must be synchronized with S&OP maturity

    Orders Orders

    VMI

    ForecastsConstraint-based S&OP

    Demand Visibility

    Channel Sensing

    Demand Shaping

    Market Opportunity

    Opportunity-based S&OP

    Active Demand Translation

    MRP

    I II III IVReacting Anticipating Collaborating Orchestrating

  • Balance is Required

    7 Levers of Agility Postponement/late-stage

    differentiation

    Drive transparency through VMI and SMI

    Design for supply and reuse

    Logistics policies

    Adaptive networks

    Flexible manufacturing strategies

    Tie agility strategies to demand shaping

    7 Levers of Agility Postponement/late-stage

    differentiation

    Drive transparency through VMI and SMI

    Design for supply and reuse

    Logistics policies

    Adaptive networks

    Flexible manufacturing strategies

    Tie agility strategies to demand shaping

    7 Demand-Shaping Levers

    Marketing programs

    New product introductions

    Promotions

    Trade deals

    Sales incentives

    Price management

    Supply shaping/runout strategies

    7 Demand-Shaping Levers

    Marketing programs

    New product introductions

    Promotions

    Trade deals

    Sales incentives

    Price management

    Supply shaping/runout strategies

  • 30%

    20%

    18%

    17%

    14%

    We use attribute-basedforecasting techniques

    along with marketintelligence

    We wait until the newproduct is through ramp-up before we include it in

    the S&OP process

    We use a rough cut salesforecast from sales or

    marketing

    New product launch is aseparate process

    New productintroductions are fully

    integrated in the processacross the full planning

    horizon

    N = 182 Total Respondents

    Q. Which of the following best describes your companys plans for new product introductions as it relates to S&OP?

    Planning for new product introductions must improve

    Only 14% have an integrated process, yet NPI is the top strategy S&OP is focused on

  • 14

    Example: Chemical Company Change Impacts

    Mindset

    Process

    Tools

    Primarily, DDBO is a change in MINDSET, as the business moves from a Supply Driven to a Demand Driven mentality.

    The mindset is formalized through the Demand Driven Business Operations PROCESS.

    Once the mindset and work process are established, TOOLS enable individuals in executing specific tasks. Tools support work throughout the DDBO sub-tracks.

    For Demand Driven Business Operations to be successful, people must change their MINDSET to accept and learn the PROCESS using TOOLS as needed.

  • Getting out of Neutral Why is it so hard?The Seven Deadly Challenges of S&OP

    - Clarity of goal - Alignment to strategy- Reward systems- What is a good decision?- Governance- The Role of the Forecast- Connection of planning to execution

    60% Change Management30% Process10% Technology

  • S&OP: Technology Key Capabilities Required:

    Data management and quality

    Integration into operational planning

    Visibility into financial plans

    Multilevel and multidimensional hierarchies

    Assumption tracking and management

    Workflow and process management

    Performance management

    What-if, scenario management, simulation

  • 9-Step S&OP Cycle

    Base demand plan

    Demand consensus

    Collect sales and market input

    Demand shaping what-If

    Publish the Plan

    Enact and measurethe plan

    Base supply plan

    Supply what-if

    Integrated Scenario Analysis

    Next Generation S&OP

    Base demand plan

    Demand consensus

    Collect sales and market input

    Demand shaping what-If

    Publish the Plan

    Enact and measurethe plan

    Base supply plan

    Supply what-if

    Integrated Scenario Analysis

    Base financial plan

    Financial what-if

    Functional Requirements

  • Pre S&OP Foundational Pieces

    S&OP1. Building the

    operational consensus plan

    How closely integrated should each PreS&OP function be?Depends on the vertical

  • Closing The Loop: Process Playbooks

    Actual Revenue BelowTarget

    Actual Revenue BelowTarget

    Problem

    CompetitorPromotion

    CompetitorPromotion

    Sales Selling Wrong Product Mix

    Sales Selling Wrong Product Mix

    Pricing IssuesPricing Issues

    Critical Part ShortageCritical Part Shortage

    Lost ProductionCapacity

    Lost ProductionCapacity

    Lost Sales Due to LackOf Supply

    Lost Sales Due to LackOf Supply

    Root Cause

    Sales Below TargetSales Below Target

    Supply ShortagesSupply Shortages

    Promote Alternate Product

    Promote Alternate Product

    Change Product MixChange Product Mix

    Launch PromotionLaunch Promotion

    Adjust PricingAdjust Pricing

    Plan OvertimePlan Overtime

    OverflowProduction

    OverflowProduction

    Inventory TransferInventory Transfer

    Hedge SupplyHedge Supply

    Options

    Promote Alternate Product

    Promote Alternate Product

    Outcom

    e

  • 33%

    12%

    53%

    35%

    14%

    23%

    0%

    25%

    0%

    5%

    S&OP technology is essentialto supporting S&OP process

    S&OP is a business process,not a technology area. No

    additional tools are necessary.

    Strongly Agree Agree Neither Agree/Nor Disagree Disagree Strongly Disagree

    Q. To what degree do you agree with the following statement: We believe that S&OP technology is essential to supporting S&OP process?

    Q. To what degree do you agree with the following statement: S&OP is a business process, not a technology area. We dont need any additional tools to support our S&OP process?

    N = 182 Total Respondents

    S&OP Just a business process?

  • 29%

    29%

    21%

    16%

    5%

    S&OP technology is a naturalextension to ERP

    S&OP technology is an extension tosales forecasting and sales

    performance management tools

    S&OP technology is an extension toBI tools

    S&OP technology is an extension toSCM tools

    S&OP technology should be a stand-alone functional capability

    Views on S&OP TechnologyQ. Which of the following best describes your views on S&OP technology?

    N = 182 Total Respondents

  • 41%

    28%

    22%

    9%

    5%

    S&OP technology is an extension toSCM tools

    S&OP technology is an extension tosales forecasting and sales

    performance management tools

    S&OP technology is a naturalextension to ERP

    S&OP technology is an extension toBI tools

    S&OP technology should be a stand-alone functional capability

    Extremely Effective Only

    Views on S&OP Technology Among Extremely Effective CompaniesQ. Which of the following best describes your views on S&OP technology?

    N = 32 Respondents who feel their current S&OP process is extremely effective

    Extremely Effective Only

  • N = 150 Respondents who invest or plan to invest in tools other than MS Excel, Access or PowerPoint

    Top 3 decision making criteria for purchasing S&OP toolsQ. In order of importance, what three factors are most important when considering purchasing tools to support S&OP?

    49%

    39%

    37%

    35%

    29%

    24%

    23%

    22%

    22%

    19%

    Ease of use

    Flexibility

    Feature/function to support the S&OP process

    Integration with ERP systems

    Proof of capability in similar environments

    Existing Vendor relationship

    Integration with SCM tools

    Technical architecture

    Vendor services and expertise

    Collaborative capabilities

    [TOP 3 COMBINED]Most

    Important

  • Yes49%

    No51%

    26%

    39%

    35%

    Plan to invest inother S&OPtools next 12

    months

    Plan to invest inother S&OP

    tools within thenext 12 to 24

    months

    We currentlyhave no plans

    to invest inother S&OP

    tools

    Penetration of formal S&OP Q. Are you currently using an S&OP tool other than Microsoft Excel, Microsoft Access or PowerPoint?

    Q. Which of the following describes your plans to invest in S&OP tools other than Microsoft Excel, MS Access or PowerPoint over the next 2 years?

    Using tools other than MS Excel, MS Access or PowerPoint for S&OP

    N =182 Total Respondents

    Plans to invest in other S&OP Tools over next 2 years

  • 2009 average spend on deployment of tools to support S&OPQ. Which of the following best describes the total amount your company will spend on deployment of tools to support S&OP in 2009

    N =162 Respondents who can confidently estimate spend

    14%

    20%

    22%

    20%

    17%

    8%

    Less than $100K

    $100K to less than$250K

    $250K to less than$500K

    $500K to less than$1M

    $1M to less than$2M

    $2M or greater

    Average Spend in 2009:

    $763K

    2009 Breakdown of spend

  • 2010 Spend plansQ. Is your planned spend on deployment of tools to support S&OP going to increase, stay the same or decrease in 2010?

    N =162 Respondents who could confidently estimate spend

    Decrease7%

    Stay the same53%

    Increase40%

    2010 spending plans over 2009

    Average change in spending in 2010 over 2009

    +6.8%

  • S&OP: Technology Best Practices:

    Phase in technology support for S&OP after S&OP processes are defined

    Resolve major outstanding issues with the underlying operationalplanning systems before proceeding with S&OP technology

    Leverage SCP investments into S&OP lower level reviews

    Focus on support for technology-enabled collaboration in S&OP tools

    Get the financial plan integrated with the S&OP plan Support scenario-based planning, & timeliness of scenario-based

    planning at the right level of detail

  • Recommended Research

    2008 Gartner, Inc. and/or its affiliates. All rights reserved. Gartner is a registered trademark of Gartner, Inc. or its affiliates.

  • Recommended Research -

    Research conducted by the AMR Research Team: Conquering the Seven Deadly Challenges of Sales and Operations

    Planning Sales and Operations Planning: Transformation From Tradition Toolkit: How to Select Technology Tools to Power Your S&OP

    Process S&OP Technology Market Update: Picture Still Murky Embraco Transforms Its Value Chain Through Integration of S&OP

    and Order Fulfillment A Chemicals Formula for S&OP Success Just How Long Do We Have To Wait for True S&OP in Life

    Sciences?

  • Thank you for participating Do you have any questions?

    Have a question for the presenter(s)?

    Type it into the Questions panewe will answer as many as time permits.

  • 31

    Two simple steps for increasing the value of todays webinar experience

    Contact your Gartner account executive (or e-mail [email protected]) with any additional questions, comments or requestsor to order a complimentary copy of todays presentation

    Visit gartner.com/webinars for a schedule of upcoming Gartner webinars (plus replays of previous webinars) and share these resources with your colleagues

    Best Practices in Sales & Operations PlanningHere's how to participate in today's webinarBest Practices in Sales & Operations PlanningAgendaS&OP Key Research Findings S&OP Process Definition ChangesDemand maturity must be synchronized with S&OP maturity Balance is RequiredExample: Chemical Company Change ImpactsGetting out of Neutral Why is it so hard?S&OP: Technology Key Capabilities Required:9-Step S&OP CyclePre S&OP Foundational PiecesClosing The Loop: Process PlaybooksS&OP: Technology Best Practices:Recommended Research - Thank you for participating Do you have any questions?


Recommended