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1 © 2013 Steelwedge Software, Inc. Confidential.
November 19, 2013 With Lora Cecere and Ed Lewis
Does Your S&OP Deliver Agility?
Supply Chain Insights LLC Copyright © 2013, p. 4
• Revenue Management
• Sales and Operations Planning
• Supplier Management
• Corporate Social Responsibility
Agility and Alignment Improvement
through Horizontal Processes
Supply Chain Insights LLC Copyright © 2013, p. 8
Those with More Mature S&OP Goals Report
Greater Supply Chain Agility
Supply Chain Insights LLC Copyright © 2013, p. 9
Extremely agile
Agile
Neutral
Not agile
Not very/at all agile
Quick Poll: How Agile
Is Your Supply Chain?
Supply Chain Insights LLC Copyright © 2013, p. 12
At each stage of S&OP Maturity, ask the question:
1. What is the goal?
2. What should we measure?
3. What defines success?
Evolution
Supply Chain Insights LLC Copyright © 2013, p. 14
Common Practice Market-driven Focus
S Ask sales Focus on market drivers:
How do we best shape demand?
& Direct integration to supply
Design of the value chain to optimize
trade-offs, minimize risk, balance
cycles, and orchestrate demand
OP Manufacturing plan Trade-offs between make, source and
deliver
Getting to Letter Perfect
14
Supply Chain Insights LLC Copyright © 2013, p. 15
S&OP Evolution
Manufacturing- Driven
Deliver a Feasible Plan for Operations
Match Demand with Supply
Sales Driven
Match Demand with Supply
Business- planning Driven
Maximize Profitability
Demand Driven
Maximize Opportunity Sense and
Shape Demand
Market Driven
Maximize Opportunity and
Mitigate Risk. Orchestrate
Demand Market to Market
Greater Benefit
• Growth
• Resilience
• Efficiency
Supply Chain Insights LLC Copyright © 2013, p. 21
Form of Inventory Function of Inventory
Raw Cycle Stock
Semi-finished Goods Safety Stock
Finished Goods In-transit Inventories
Returned Inventories Seasonal Builds
Slow and obsolete Promotional Inventories
Risk Hedging
New Product Launch Builds
Form & Function of Inventory
Supply Chain Insights LLC Copyright © 2013, p. 22
Ease of Getting Total Supply Chain
Costs
___________________________________________________________
Source: Supply Chain Insights LLC, Transportation (Aug-Oct 2012)
Base: Transportation Users (Manufacturers, Retailers and Distributors) (n=34)
Q18. How easy is it for your company to get total supply chain costs for your operations?
12% 12% 24% 24% 29% Users
USERS: Ease of Getting Total Supply Chain Costs
Extremely/very easy 5 Neutral 3 Extremely/very difficult
24% EASY 53% DIFFICULT
Supply Chain Insights LLC Copyright © 2013, p. 23
Quick Poll: How easy is it for your
company to get total supply chain costs?
Extremely/very easy
Easy
Neutral
Difficult
Extremely/very difficult
Supply Chain Insights LLC Copyright © 2013, p. 26
Cost
Volume
Growth
CEO
Chief Customer Officer
Chief Marketing Officer
Sales
Account Teams
COO
VP of Supply Chain
Customer Service
Procurement Logistics
CFO
CIO
VP of Manufacturing
Quality
Typical Organization
Supply Chain Insights LLC Copyright © 2013, p. 34
• “I wish that we could talk about forecast error without having to feel like we need an apology…”
• “We need a balanced scorecard not an encyclopedia of metrics…”
• “The metrics need to align around value…like I was trained in my Bonsai class, let the tree show you the way…”
• “Every industry has their own iron triangle that defines supply chain potential. Customer service is always in the middle…”
Quotes from Recent Interviews
Supply Chain Insights LLC Copyright © 2013, p. 35
• Revenue
• Profitability
• Inventory (DOI or Inventory turns)
• Customer Service (case fill or perfect order)
• Forecast Accuracy
Metrics: Focus on Balance
Supply Chain Insights LLC Copyright © 2013, p. 36
Benefits Received
Source: Supply Chain Insights, 2012
What benefits have you received from your work with S&OP processes?
59%
57%
50%
42%
38%
36%
34%
32%
32%
30%
Increasing revenue
Improving forecast accuracy
Reduction of inventory
Improving asset utilization
Determining outsourced manufacturing
Determining procurement requirements
Improving new product launch
Transportation and warehouse management
Capital planning and asset management
Improvements in the perfect order
▲ 2%
▲ 5-7%
▲ 3-7%
▲ 3-6%
▲ 3-6%
▼ 10-15%
▼ 2-8%
Supply Chain Insights LLC Copyright © 2013, p. 41
Value Network Strategy
Supply chain strategy
Business Strategy What are the right things to do to increase company value?
Value-network Supply Chain Strategy What are the right ways to support the business strategy?
What are the right trade-offs between value drivers for each value network?
Right product
platforms
Design the
supply
response
Build
organizational
systems and
manage talent
Align supply
relationships
Align demand
relationships
Effective Supply
Networks
Execution of buy-
side strategies
Continuous
Improvement
Capabilities Required
Supply Chain
Network Design
Design Networks
Innovation
Methodologies
Demand Networks
Joint Value Creation
Strategies
Business Process How do I do the right things right?
Source: Supply Chain Insights, LLC
Supply Chain Insights LLC Copyright © 2013, p. 42
• S&OP has grown in importance.
• The trade-offs of the supply chain cannot be effectively modeled using a spreadsheet.
• Each stage must be built with the goal in mind.
• Focus on continuous improvement and serving the business.
Wrap-up
Supply Chain Insights LLC Copyright © 2013, p. 43
Save the Date!
Supply Chain Insights Global Summit 2014 September 10-11, 2014
The Phoenician – Scottsdale, AZ USA
Supply Chain Insights LLC Copyright © 2013, p. 44
Who is Lora?
• Founder of Supply Chain Insights
• Partner at Altimeter Group (leader in open
research)
• 7 years of Management Experience leading
Analyst Teams at Gartner and AMR Research
• 8 years Experience in Marketing and Selling
Supply Chain Software at Descartes Systems
Group and Manugistics (now JDA)
• 15 Years Leading teams in Manufacturing and
Distribution operations for Clorox, Kraft/General
Foods, Nestle/Dreyers Grand Ice Cream and
Procter & Gamble.
Supply Chain Insights LLC Copyright © 2013, p. 45
Where Do You Find Lora?
Contact Information:
lora.cecere@supplychaininsights.com
Blog: www.supplychainshaman.com
(4000 pageviews/month)
Twitter: lcecere 4640 followers.
LinkedIn: linkedin.com/pub/lora-
cecere/0/196/573 (5600 in the network)
© 2013 Steelwedge Software, Inc. Confidential. 46 Outline
Single Line of Sight: Plan, Perform, Profit
Steelwedge Agility Webinar Series
Lora Cecere - Does your S&OP Drive Agility?
November 20, 2013
Outline
Steelwedge Drives Agility
Alignment - Cross functional planning between
Sales, Marketing, Operations and Finance
Action Readiness - Low planning latency due
to data collection or application silos
Alternatives - Scenario analysis and margin
optimization
Assessment - Balancing supply and demand.
Assessing trade-offs.
Outline
Cross-functional Collaboration
From a single cloud based solution.
Account and Sales
Managers
Supply Planning
Production Planning
Finance
Executive
Sales and Marketing Executive
Supply Chain Executive
Product Managers
Demand Planning Marketing
© 2013 Steelwedge Software, Inc. Confidential. 49 Outline
S&OP Sales
Statistical Forecast
Demand Planning
Revenue Planning
Pipeline Management
Sales Collaboration
Attach Rate Planning
Lifecycle Management
Consensus Demand
S&OP Operations
Demand Sourcing
Supply Plan
Procurement Plan
Rough Cut Capacity
Inventory Planning
Master Planning
Inventory Investment
Allocations
S&OP Collaborate
Customer Collaboration Supplier Collaboration
Executive S&OP
Strategic Planning Integrated Business Planning Profit & Loss Risk Management S&OP Insight
Mobile
Excel Pivots
S&OP Apps
App Library
Customer Developed
Steelwedge NAPA
Cloud Studio Cloud Integration Portal Cloud Services Portal
Planning Engine Analytics Engine
S&OP Platform
Outline
Planning data from
across the systems landscape
Business Intelligence
SCP
ERP
Financial Systems
CRM
Data Warehouse
Outline
Customer Improvements
Planning Cycle Time - 50-70% reduction in via integration and process automation
Forecast Accuracy - 15-30% improvement
in forecast accuracy through collaboration and
advanced statistical forecasting
Excess Inventory - 10-20% reduction in
excess inventory via improved forecast
accuracy
Stock-outs - 25% reduction, raising
customer service
Revenue and margin - 5% lift through
reduced stock-outs and better cost management
Outline
The sales force knows customer demand - what and when they will buy.
But often, the opportunity pipeline is not considered in demand planning.
Valuable capital gets tied up in excess inventory when forecasts are too high.
Inaccurate forecasts result in shortages, expediting, and lost sales when the forecast is too low.
Is Your Sales Pipeline Connected to Your Demand Plan?
Outline
Sales Pipeline Bridge Demand Visibility and the Sales Pipeline
Dynamic, competitive markets have changed the game
• Statistical projections alone are insufficient.
• CRM sales opportunities: Best reflection of customer demand.
• Opportunities + Stat Forecast = Forecast Accuracy improvement.
Steelwedge Sales Pipeline Bridge
• Intelligent opportunity filtering and translation
• Recognizes and transforms CRM and SFA
data
• Correlates to ERP and SCM data
• Dramatic forecast improvement and
enterprise alignment.
Steelwedge Bridges the Planning Gap between CRM & ERP
ERP
Outline
Insert SPB screenshots here
Link to ESOP
Opportunity Pipeline via Sales Pipeline Bridge
on
Opportunity Pipeline for S&OP Planning
Outline
Steelwedge Sales Pipeline Bridge enables you to extract, understand and operationally act on the critical information in your sales funnel
Connect Your Sales Pipeline to Your Demand Plan With Sales Pipeline Bridge
© 2013 Steelwedge Software, Inc. Confidential. 57 Outline
Executive S&OP
Supply Plans
Finance Plans
Demand Plan (Unconstrained)
Supply Plan (Constrained)
Finance Plans
Pre-meeting
Executive S&OP
Compass Inputs
and Outputs
Supply & Demand
Scenarios
Inputs
Business Unit
Supply Plans
Sales, Backlog,
Opportunities, Inv.,
POs, Budget
& Master Data
Business Unit
Finance Plans
Balancing & Scenario
Planning
Scenario Review
& Issue
Resolution
Planning Processes
Consensus Demand
Forecasts
Executive S&OP
Nightly
Transaction
Files
Insight
S&OP Apps
Performance
Current Plan
Finance
Waterfall
KPI Dashboard
Collaboration
Recommended