Drive better returns from S&OPPractical steps to improve ROI from your S&OP investment
Agenda: Drive better returns from S&OP
o Introduction
o The promise of S&OP
o Alignment drives better performance
o Practical steps to improve alignment
o Case Study
o S&OP ROI Check-list
S&OP Vital Signs Blog Series
Anaplan-Valizant
2017 S&OP PractitionerWebinar Series
Practical steps to realize more S&OP value
Visit the booth in the Expo Hall
The promise of S&OP
Sales & Operations Planning –Best Practices (2006)
John Dougherty and Christopher Gray
“Inside the walls” of 13 companies with outstanding S&OP programs.
On-time delivery
7-13% improvement
Inventory investment
10-20% reduction
Distribution and transportation
5-15%reduction
Manufacturing downtime
5-26% reduction
Benefit multiplier
1.3x - 2xconcurrent initiatives
AGFA US HealthCare
AmcorFlexibles Packaging
Group
Cast-Fab Technologies
Coca-Cola Midi
DanfossCommercial Compressors
Eclipse
Eli-Lilly & Co. Engineered
Materials Solutions
InterbakeFoods
Div. Weston Foods
Norse Dairy Systems
Div. Weston Foods
PYOSAColors Division
The Scotts Company
Agenda: Drive better returns from S&OP
o Introduction
o The promise of S&OP
o Alignment drives better performance
o Practical steps to improve alignment
o Case Study
o S&OP ROI Checklist
Execution
Operational
Tactical – Intermediate Functional Plans
Strategic
MonthsQuartersYears
Budget / Annual Operating Plan
Planning Altitude
Strategic Plan
Marshal and determine actions to support the mission, goals, and objectives. Explicit mission, goals, objectives and actions.
Tactical Plans
Functional plans (e.g., production plan, sales plan, marketing plan) synchronizing activities across functions for achieving the intermediate goals and objectives to support the strategic plan.
Operational Plans
The set of short-range plans and schedules detailing specific actions.
Supply Chain Execution
Execution-oriented for procurement and supply across a supply chain. Manufacturing, warehouse, and transportation execution and visibility across the supply chain.
Sales and Operations Planning (S&OP)
Process to develop tactical plans providing management ability to strategically direct and achieve advantage by integrating customer-focused plans with the supply chain.
Sales & Operations Planning (S&OP)
American Production and Inventory Control Society Dictionary, 14th Edition (2013)
1 2 3 6 9 12
1 2 3 4 1 2 3 4
1 2 3 4 5
Aligned plans—not just integrated
Operational planning
Material
Rough-cut capacity planning
Allocate production capacity
Material and key component planning
Component requirements
Distribution and inventory planning
Set inventory targets
Demand planning and sales forecasting
Estimate demand
Demand
1 2 3 6 9 121 2 3 4 1 2 3 4
1 2 3 4 5
MonthsQuartersYears
Distribution
RCCP
SKU mixLevel of Detail
Typical Lead Time
Finance
New product Promotions
Sourcing
Sourceplanning
Material spend and savings
Financialplanning
Finance forecast
Trade promotions management
Product promotion
Newproducts
New product introduction
Execution
ERP: System of record for transactions and master data
• Sales orders• Fulfillment orders• Transfer orders• Inventory• Purchase orders
Execution
Tactical Planning
Product family volume
Rough-cut capacity planning
Demand planning Inventory planning
Key component planning
Source planning
New product planning Trade promotions planning
Financial planning
S&OP, tactical, and operational plans
Beyond lead time planning, tactical planning is required to:o Ensure resources and capacity are aligned to strategy… while the
best options are still possible.
o Integrate and align financial, sales, marketing, and product development plans.
o Set volume plans to guide SKU mix.
Operational planning
Material
Rough-cut capacity planning
Allocate production capacity
Material and key component planning
Component requirements
Distribution and inventory planning
Set inventory targets
Demand planning and sales forecasting
Estimate demand
Demand
1 2 3 6 9 121 2 3 4 1 2 3 4
1 2 3 4 5
MonthsQuartersYears
Distribution
RCCP
SKU mixLevel of Detail
Typical Lead Time
Finance
New Product Promotions
Sourcing
Sourceplanning
Material spend and savings
Financialplanning
Finance forecast
Trade promotions management
Product promotion
Newproducts
New production introduction
Execution
Tactical Planning
Product family volume
Sales & operations planning
Executive S&OP
Executive S&OPArbitrate use of resourcesInputDemand planInventory planRough-cut capacity planKey component constraints
OutputFinal planOperational finance plan
Tactical planning
Rough-cut capacity planning
Demand planning Inventory planning
Key component planning
Source planning
New product planning Trade promotions planning
Financial planning
Execution
ERP: System of record for transactions and master data
• Sales orders• Fulfillment orders• Transfer orders• Inventory• Purchase orders
S&OP, tactical, and operational plans
Agenda: Drive better returns from S&OP
o Introduction
o The promise of S&OP
o Alignment drives better performance
o Practical steps to improve alignment
o Case Study
o S&OP ROI Checklist
Operational Planning
New Product Planning
Promotions Planning
Sales Forecast
Distribution/ Inventory Planning
RCCP
Material Planning
Source Planning
Finance Forecast
Demand Planning
Product Marketing Sales Operations Finance
S&OP vital signsExecutive support and participationCross-functional scopeConstructive issue resolutionEnabling technology
Executive S&OP
Sales and operations planning
Executive team
Tacticalplanning
New product planning
Promotions planning Sales forecast
Distribution/ inventory planning
RCCP
Material & key
components
Source planning
Finance forecast
Demand planning
Product Marketing Sales Operations Finance
Fundamental planning alignmentDemand signal planningFG inventory planningRough-cut capacity planningMaterial and Key Component Planning
Advanced alignmentSource planningPromotions planning
Intermediate alignmentNew product planningFinance forecast
Increase ROI: eliminate misalignment
End to end alignmentPlan CompletenessInterlocking Terms and HorizonPlanning Cadence
Executive S&OP
Sales and operations planning
Executive team
Tacticalplanning
New product planning
Promotions planning
Sales forecast
Distribution/ inventory planning
RCCP
Material & key
components
Source planning
Finance forecast
Demand planning
Product Marketing Sales Operations Finance
Current Technology
Excel Paradox - Siloed FlexibilityResult
Misalignment caused by incompatible planning termsPlanning and decision-making is complex, slow and disconnected. Decisions are often based on approximations due to Excel’s limited computational ability
Point SolutionsPros
Feature rich applications for function/sub-function
ConsOverly complex design with “coded” software features.Modifications expensive and time consuming
ResultForced-fit solution reflecting “coded” featuresUnwanted process change jeopardizes performance and adoption
+ Point
Solutions
Executive S&OP
Sales and operations planning
Executive team
Tacticalplanning
New product planning
Promotions planning Sales forecast
Distribution/ inventory planning
RCCP
Material & key
components
Source planning
Finance forecast
Demand planning
Product Marketing Sales Operations Finance
New technology drives alignment
Enabling TechnologyEasy to tailor to functional requirements
Best of two approaches
Utilize advanced supply chain planning techniques
Adapt to company-specific requirements
Underlying data easily accessed
Business user administered – self-service
Share data seamlessly other platform applications
Massive computational power scales with enterprise requirements
Secure, enterprise grade platform
Supply Chain Planning on the Anaplan platform
Deep Supply Chain Planning
World’s most powerful modeling
engine.
Analysis Time
50% faster planning with
composite dashboards
ConnectedNative connection
enables free flow of data between
models.
Performance
True cloud solution. 1 billion cells
recalculated in less than a second.
What-if ScenariosWhole Plan
scenarios using any/all plan levers.
UpgradesSeamless upgrade process enables no
cost upgrade to latest Anaplan
version.
AdaptabilityEase of change
enables adaptation to preferred
process.
Self-serveThe power to build,
connect, and manage your own
models. No Change Orders required.
MaintainabilityConfiguration
managed from live system. Changes
immediately reflected.
No Shelf-ware6-8 week
implementation ensures purchases
implementedand used.
Agenda: Drive better returns from S&OP
o Introduction
o The promise of S&OP
o Alignment drives better performance
o Practical steps to improve alignment
o Case Study
o S&OP ROI Checklist
Executive S&OP
Sales and operations planning
Executive team
Tacticalplanning
New product planning
Promotions planning
Sales forecast
Distribution/ inventory planning
RCCP
Material & key
components
Source planning
Finance forecast
Demand planning
Product Marketing Sales Operations Finance
Sonos Case Study
Supply demand balancing provides reliable channel commit
ChallengesMultiple plans compromised plan confidence
Difficult and time consuming to “assemble” data from multiple sources
Weekly C-Meeting report preparation disruptive to operations
Scenario planning outdated before completion
SolutionSupply demand balancing solution with constraint based planning
Planned capacity, SKU mix, inventory target, and transportation mode levers
Single source of truth for plan with automated data collection
Capacity planning accelerates commit and improves accuracy
Challenges
Capacity and key component constraint plans were disconnected and manual
Difficult to simulate combined impact on capacity and production
Confidence in commit plan and its accuracy required improvement
Manual effort to translate to purchase orders and logistics plan
Solution
Constraint-based capacity planning; standard/ premium/holiday capacity, component supply
Seamless commit plan flow to supply demand balancing
Automated PO generation and shipping container planning
Increased Material Savings with Spend Management
Challenges
Difficulty achieving strategic cost savings targets or explaining material spend variances.
Component requirements approximated using multiple excel spreadsheets and applications.
Time consuming and error prone engineering and contract manufacturer BOM reconciliation
Little time left to address issues or improvement.
Solution
Real-time component requirements from ex-factory plan and current multi-level BOM
Live, 12 month spend and savings projection
Variance drill-down by manufacturer, commodity, product and sourcing manager
Automated Eng. and CM BOM reconciliation
Supply and demand
balancingSupply
planning
Material spend
Component forecast
Transformation roadmap
Key Component
Visibility
Phase III Phase IVPhase IIPhase I Phase V
6 weeks 6 weeks6 weeks8 weeks 6 weeks
Single workspace for all supply chain planning apps
ERP
Data Warehouse
PLM
Anaplan Workspace
Supply Chain Planning Solutions
Sales ForecastingData Hub DH
Inventory Planning
Demand Planning
Supplier Collaboration
Product Allocation
Material Planning
Rough-cut Capacity Planning
DH Data Flow between Apps
Supply Chain
Finance
Source Planning
Agenda: Drive better returns from S&OP
o Introduction
o The promise of S&OP
o Alignment drives better performance
o Practical steps to improve alignment
o Case Study
o S&OP ROI Checklist
Practical Steps to Increase S&OP Return
S&OP ROI Checklist
⎕ Executive Support and Participation S&OP involvement and leadership from the executive leader.
⎕ Cross-Functional Scope Full participation from all functional areas
⎕ End to End Interlock Completeness, Terms and Horizon, Cadence
⎕ Fundamental Alignment Demand, Inventory, Capacity and Material Planning
⎕ Intermediate Alignment New Product and Finance Forecast
⎕ Advanced Alignment Promotions and Sourcing
⎕ Constructive Issue Resolution Focus on problem-solving instead of finger-pointing.
⎕ Enabling TechnologyMinimize process compromise. Place high value on ease of deployment and business use self-service.
Conduct an assessment to evaluate your company’s alignment using the S&OP ROI Checklist
Dedicated team: 4 weeks
Q A