Who Owns the “S” in S&OP?

Who Owns the “S” in S&OP?

2 © 2014 Steelwedge Software, Inc. Confidential.

Speaker

• Danny Smith, VP Industries

• Responsibilities/Role

• In-house expert on S&OP/IBP

• Leads Industries initiatives

• Background

• BS Industrial Management; MS Decision Sciences

• Strategic Planning, Fortune 300: corporate planning efforts (i.e. S&OP)

• Career: “an effort to find a better way”

• Most recent – global solution champion for Integrated Business Planning at Oracle

• Danny Smith, VP Industries

• Responsibilities/Role

• In-house expert on S&OP/IBP

• Leads Industries initiatives

• Background

• BS Industrial Management (Georgia Tech); MS Decision Sciences (GSU)

• Strategic Planning, Fortune 300: corporate planning efforts (i.e. S&OP)

• Career: “a 20+ year effort to find a better way”

• Most recent prior to Steelwedge – global solution champion for Integrated Business Planning at Oracle


3

“The successful business

executive is a forecaster first,

everything else follows.”

Peter Bernstein

‘Against the Gods: The

Remarkable Story of Risk’

Predict


Our benchmarking studies show that the best

forecasters have 15% less inventory, 17% stronger

fulfillment, and 35% shorter cash-to-cash cycle times, all

having a direct impact to the bottom line.

“

”

Who Owns the “S”: Visibility to the Customer Matters

Rob Bois, AMR Research (now Gartner) S&OP Benchmarking Report


How Often Is Sales Involved in S&OP?

64%

Involved

NOT Involved

AMR Research (Gartner) S&OP Benchmarking Report


How Far Can You Forecast?

70% said “one quarter

or less” CFO Magazine Survey


“Expectation Lead Time” & the Bullwhip Effect

Operations

Wrong products

are deployed

Excess inventory;

Stock outs

Financials

Wrong numbers

promised to street;

Missed results

Loss of credibility;

Share price impacts

Customers

Customers don’t

receive orders

Lost sales;

Lost customers Miss on revenue, product,

customer, or timing

Placing a Bet

on the Future

Stock market reactions when

“supply chain” glitches reported:

• Ramp-up/roll-out issues: -11%

• Delays in prod. dev.: -10%

• Production problems: -10%

• Quality problems: -9%

• Parts shortage in mfg.: -7.5%

Source: Dr. Vinod Singhal, Georgia Institute of Technology

Expectation Lead Time:

“customers don’t want to wait”

vs.

Supply Chain Lead Time:

“it takes time to supply”


Classic Disconnects…

Most: Inward Focus

but remember…

Demand-Driven Leaders

(Outward Focus)

Out-Perform Competition


Everything Is Increasingly Connected

Internet of Things

September 2012:

• Facebook: 900 Million

• LinkedIn: 177 Million

• Twitter: 140 Million

Today:

• Facebook: 1.3 Billion

• LinkedIn: 277 Million

• Twitter: 646 Million

Social Listening for Competitive Advantage:

Bruce Richardson, Chief Enterprise Strategist, Salesforce From Steelwedge Webinar April 2014 “Social Supply Chain: Linking Sales Intelligence to Supply Chain and Finance”


Are We Using the Information?

Customers Traditional Approach:

Statistics

?


Is this the Answer?

missing something?

3%

5%

5%

8%

10%

13%

12%

15%

22%

3%

6%

5%

5%

6%

7%

10%

9%

12%

8%

14%

16%

3%

7%

7%

6%

8%

10%

11%

6%

12%

14%

13%

Other

Lack of external cross-functional collaboration

Managing relationships + processes with outsourcing partners

Cost volatility

Logistics constraints, performance, or costs

Supplier performance/variability

Lack of visibility across supply chain

Supply chain talent

Lack of internal cross-functional collaboration

Supply chain network complexity

Difficulty or inability to coordinate and synchronize end-to-end SC processes

Forecast accuracy + demand variability

Ranked First Ranked Second Ranked Third

Sum = 51%

42%

30%

29%

32%

31%

20%

17%

11%

16%

Q07. What do you consider to be the top three obstacles to achieving your

organization's supply chain goals and objectives?

14%

6%

... and it

has been

this way for

years!

Despite Spending All That Money on Planning …

Tim Payne, Research Vice President, Gartner

From Steelwedge Webinar June 2013 “From Re-think Your Planning Technology Priorities”


Poll 1: Who Owns “S” in S&OP?

A: Sales

B: Supply Chain

C: Finance

D: Other



Purists: SALES

Realists: SUPPLY CHAIN

Risk – Averse: FINANCE

…Humans!

Peer

Katie Vas

Janella


Humans Talking to Humans

Customers

Janella

Peer

?


Janella Pre-ESOP

Trying It With Spreadsheets

Demand Planning, SCM/APS Systems

ERP, Financial, & Transactional Systems

Consolidation, Review,

Overrides

Data Collection,

Reconciliation Consensus

Process ESOP

Sales

Manual

Complex

Security Risk

Not Scalable

Does this Give Executives

an Agile & Predictable

Decision-Making Process?

Peer


How Long Does it Take?

18+ days

27%

9%

18%

12-17 days

6-11 days

3-5 days

Time Required for Exec S&OP Preparation %

AMR Research/Gartner S&OP Benchmarking Report


Somebody Had to Have Seen it Coming!


Humans Talking to Humans Gives Management Great Information

Customers

Janella

Peer

Insight When I Need It!

http://www.google.com/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&docid=fbBFMho-P2Uc2M&tbnid=Fu3pXHOU1cRY4M:&ved=&url=http://www.thewritersmanifesto.com/blog/2011/12/06/to-connect-or-not-to-connect-with-other-freelancers/&ei=3Z9nUYC7JOmjiQKfnIDQDQ&bvm=bv.45175338,d.cGE&psig=AFQjCNHPlzs6e_QjKBE__LUtrrOSjZDyBA&ust=1365832029879199


Steelwedge: The S&OP Platform Single Cross-Functional Platform for Planning & Analytics

APS Systems

ERP, Financial, & Transactional Systems SAP, Oracle, etc.

Industry

Data

Product / Sub-Family Customer Revenue

Product / Family Territory / Region Revenue

Product / Family Promotions Revenue

Product / Family Region Units & Revenue

Product Stock Locations Units and Inventory

Family / Series Territory / Region Revenue, Margin & Cash

Family / Series / BU Geo Revenue, Margin & Cash

Product Production Site Units and Capacity



Planning Views Stakeholders

Account Managers

Sales Managers

Marketing

Demand Planners

Supply Planners

Production Planners

Finance

Executives

Customers

Suppliers

Cross-functional Planning Environment

Systems Landscape

http://www.google.com/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&uact=8&docid=fscc-YRDegWdeM&tbnid=iYbCa-CVOVyTJM:&ved=0CAUQjRw&url=http://www.aofas.org/medical-community/resident-fellow-opportunities/Pages/Resident-Scholarship.aspx&ei=2760U92bBIHyoATwp4LoBg&bvm=bv.70138588,d.cGU&psig=AFQjCNEXieK8npA5co1pDCyf5JOE1sxAog&ust=1404440656758822

http://en.wikipedia.org/wiki/File:Warner_Bros_logo.svg

http://www.google.com/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&uact=8&docid=6Yyw-CHzHSBkpM&tbnid=midefT58ZHafUM:&ved=0CAUQjRw&url=http://www.kk-asc.com/Network/network_j1.html&ei=KEFZU-fFOMSQyAT0-4KoCA&bvm=bv.65397613,d.aWw&psig=AFQjCNG8zp2-QMTAEb7krPkYbWi_Y8o8ng&ust=1398444700807508


What You Need to Be Successful

• Make gathering the information quick and easy

• Unify demand streams for single view (big deals/new, run-rate, 3rd party)

• Gather & mine sales reps views, but don’t add more work for them!

• Facilitate the collaborative vetting process for sales management

• Leverage experience of management team for credible numbers

• Capture qualitative information

• Drive sales planning improvement

• Track/monitor, measure, so you can improve process


Make it Easy – Pull Pipeline Information Directly from CRM

Key Pipeline

Information in

Salesforce.com

Key Information in

Salesforce.com


Give Sales Management Complete View for Vetting

New Opportunities

and Run-Rate

Drill to Details

Quantitative and

Qualitative

Information


Track

Everything!

Who is More

Accurate?

Give Leadership the Right Tools to Improve the Business

Is there

Bias?

Steelwedge Case Study: Microsemi

Improving Forecast Accuracy at Microsemi

Challenges

• Operations was challenged in building the right supply due to manual, ad hoc planning & forecasting tools

• Planners couldn’t run their own reports, had no historical information, & didn’t have data at the right granularity

• Poor planning visibility led to excess inventory

Solutions

• Enabled monthly & exception-based forecasting and capacity planning • Ensured all product data, including sales pipeline, is centralized &

easily accessible • Adjusted forecast easily on hundreds of part numbers with rationing

feature

Results

• Increased forecasting accuracy • Reduced forecasting time by half • Increased overall fiscal planning accuracy by using Steelwedge to

validate numbers • Improved forecasting for inventory and safety stock

“We love Steelwedge. It

has streamlined our

forecasting process, but it

goes beyond that. It’s great

to have so many systems

pulled into one place, and

it’s changed our lives. This

is a metamorphosis for our

company. We’ve taken

control of our S&OP

process.”

Laura Finkelstein

Vice President of Product

Management

Microsemi

Company Microsemi (Formerly

Symmetricom)

Headquarters Aliso Viejo, CA USA

Industry High Tech

Products and Services Semiconductor and system

solutions for communications,

defense & security, aerospace

and industrial markets

Employees 3,000+

Revenue US$984 million

Web Site www.microsemi.com

37% reduction in inventory

© 2014 Steelwedge Software, Inc. Confidential.

20% improvement in customer

order fulfillment

Success by the Numbers:

20%

reduction in

manufacturing lead times

Steelwedge Case Study: Extreme Networks

Driving Consistent Growth at Extreme Networks

Challenges

• Outdated & inaccurate planning data • Delayed orders • Long product life cycles • Excess inventory

Solutions

• Enabled executive-sponsored collaboration among S&OP departments • Normalized data in Steelwedge • Determined product sales in near real-time & adjusted accordingly

Results

• Facilitated timely & accurate information through automation • Enabled cross-functional alignment through collaborative planning • Streamlined, end-to-end process: profits up, supply chain cost down • Doubled inventory turns year over year • Created demand-driven, customer-focused, responsive supply chain with

visibility, data, & analytics • Forecast error (MAPE): averaging 31% • Revenue impact less than 1% of revenue

“A global, collaborative and

integrated S&OP process,

along with the internal and

external alignment of demand

and supply, have resulted in

revenue growth and increased

profitability for Extreme

Networks.”

Jack Lyon

Vice President, Supply Chain

Extreme Networks

Company Extreme Networks

Headquarters San Jose, CA USA

Industry High Tech

Products and Services Provides high performance,

open networking innovations for

enterprises, hosting companies

and Internet Exchange Points

Customers More than 6,000 in more than

50 countries

Revenue US$600 million

Web Site www.extremenetworks.com

2x inventory turns

(Year over Year) © 2014 Steelwedge Software, Inc. Confidential.

97%+ customer fulfillment

(ATP)

20% increase in new

customers


Steelwedge Case Study: Contech

Increasing Demand Planning Visibility at Contech

Challenges

• Unpredictable pricing and access to raw materials like steel and aluminum

• Lack of centralized team approach and consistency throughout the organization (ex: multiple demand plans and fragmented systems)

• Lack of ability to respond to marketplace changes with agility

Solutions

• United the plethora of distributed system data into one cloud-based system for easy integration and access

• Created a centralized view of the demand plan • Facilitated the management of forecast, statistical forecast, historical

data, and future quotes that inform a single demand plan, and collected and rationalized all of this information in Steelwedge

Results

• Improved ability to project inventory & impact on financial model • Improved visibility & reporting with process-driven communication &

collaboration • Leveraged “what-if” modeling to explore a myriad of business scenarios

and improve decision-making

“There’s no doubt we’ve got

payback. And it isn’t just

about discrete financial

metrics. There are numerous

opportunities we wouldn’t

have been able to go after.

We wouldn’t have been fast

enough, integrated enough,

agile enough to capitalize.

Today we power more

strategic initiatives and grab

more market share from our

competitors.” Randy Ramsey

Director of Supply Chain

Contech

Company Contech

Headquarters West Chester, OH USA

Industry Industrial

Products and Services Site solution products and

services for the civil engineering

industry

Employees 1,000+

Revenue Private

Web Site www.conteches.com

40% decrease in

working capital © 2014 Steelwedge Software, Inc. Confidential.

10% increase in on-time

customer service

18 month forecast visibility



Poll 2: Do Casual Planners Add Value?

A: Yes

B: No



• You Do!

• You have good information out there…

• …But you’ve got to make it easy to get the data

• You need to quickly connect information from the frontlines with

decisions in the boardroom

• Steelwedge Initiatives:

• Sales Pipeline Bridge

• Sales Planning

• Social Supply Chain


Q&A


Date post:	01-Dec-2014
Category:	Technology
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