Continuous S&OP - Breaking the Mold - Kinaxis presentation

Copyright © 2014 Kinaxis All Rights Reserved. Copyright © 2014 Kinaxis All Rights Reserved.

Continuous S&OP –

Breaking the Mold

Trevor Miles | e: [email protected] | m: +1.647.248.6269 | t: @milesahead

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Copyright © 2014 Kinaxis All Rights Reserved.

Where did this all start?

Sep, 1989

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What have we been working toward?

The 5 step ES&OP Process - Tom Wallace, Executive S&OP: The Executive's Guide

Issues

- Sequential

- One Directional

- High Level

- Manual

- Slow

- Unit based

- Ignores margin

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A lot has changed in 25 years Unprecedented time of global expansion

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A lot has changed in 25 years PC, ERP, APS, internet, …

Oliver Wight: Transitioning from S&OP to IBP

DOS

VisiCalc

Windows 95

SAP APO

Google

GSM Mobile

Excel

SAP iPad

dotCom

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Jun 2007

Mar 2011

Aug 2006

Mar 2006 Feb 2004 May 2003

Sep 2010

Oct 2012

A lot has changed in a little over 10 years Cloud, Social, Mobile, Internet-of-Things, …

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A lot has changed in 5 years Internet-of-Things, 3D Printing, …

http://www.holyrood.com/2012/12/briefing-11/

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Disruptive Technologies for Supply Chain SCM World, The Chief Supply Chain Officer Report 2014, September 2014

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But our mental model is stuck in 1990s ideas

The traditional “plan then execute”

model is the product both of historical

thinking about supply chain processes

and the state of available supporting

technology. Next Generation Supply Chain Management - The Integration of Planning and Execution,

CSCO Insights Thought Leadership Series, Supply Chain Digest, 2009

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Traditional S&OP Description

Step 1

Data

Gathering

Step 2

Demand

Planning

Step 3

Supply

Planning

Step 4

Pre-S&OP

Meeting

Step 5

Exec-S&OP

Meeting

Actuals

Demand, Supply,

Inventory, & Backlog +

Statistical Forecasts

and Worksheets

Management Forecast

1st-pass spreadsheets

Resource Requirements Plan

Capacity Constraints

2nd-pass spreadsheets

Decisions.

Recommendations,

Scenarios, & Agenda

for Exec Meeting

Decisions &

Updated

Game Plan

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Step 1

Data

Gathering

Step 2

Demand

Planning

Step 3

Supply

Planning

Step 4

Pre-S&OP

Meeting

Step 5

Exec-S&OP

Meeting

Actuals

Demand, Supply,



and Worksheets

Management Forecast





Decisions.

Recommendations,

Scenarios, & Agenda

for Exec Meeting

Decisions &

Updated

Game Plan

No wonder companies

still think in terms of

months and quarters

Exec: I want to increase demand

In Asia by 5% to compensate

for revenue drop in Europe

Demand Manager/Planner:

Given the last 12 months history

and our existing Marketing plans

which countries make most sense?

Is this spread across all product families?

What about NPI?

Supply Manager/Planner:

Does the usual factory have capacity?

If not, where else can we get supply?

What will be the additional mfg & delivery cost?

Which materials do we need to increase?

Can the suppliers meet our new demand?

If not, do we have alternative suppliers?

Inventory Manager/Planner:

How much RM, WIP, and FG do we need to carry?

Where are we going to place it?

Do we have the warehouse capacity?

What does this mean in terms of min order qtys?

How close does FG need to be to customers?

S&OP Team:

Do we have the right demand/supply balance?

Will this meet the new revenue targets?

Do we need additional Marketing campaigns?

What-if the NPI does not take off as we assume?

Executive S&OP Team:

Can we live with the projected revenue shortfall?

Have all the risks been considered?

Will Europe drop even more if we shift Marketing emphasis to Asia?

What-if we accelerate R&D by 6 months?

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Step 1

Data

Gathering

Step 2

Demand

Planning

Step 3

Supply

Planning

Step 4

Pre-S&OP

Meeting

Step 5

Exec-S&OP

Meeting

Actuals

Demand, Supply,



and Worksheets

Management Forecast





Decisions.

Recommendations,

Scenarios, & Agenda

for Exec Meeting

Decisions &

Updated

Game Plan

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Step 1

Data

Gathering

Step 2

Demand

Planning

Step 3

Supply

Planning

Step 4

Pre-S&OP

Meeting

Step 5

Exec-S&OP

Meeting

Actuals

Demand, Supply,



and Worksheets

Management Forecast





Decisions.

Recommendations,

Scenarios, & Agenda

for Exec Meeting

Decisions &

Updated

Game Plan

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Continuous & Collaborative S&OP

Step 2

Demand

Planning

Step 3

Supply

Planning

Step 4

Pre-S&OP

Meeting

Step 5

Exec-S&OP

Meeting

Actuals

Demand, Supply,



and Worksheets

Management Forecast





Decisions.

Recommendations,

Scenarios, & Agenda

for Exec Meeting

Huge improvements in

- Visibility to issues

- Resolution time

- Alignment across functions

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What does “good” look like?

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StrataBridge, Evolution of Sales & Operations Planning, Andy Coldrick, Dick Ling & Chris Turner

Risk Adjusted Long Term Plan One number plan wrong approach

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Outside-In approach critical

Source: Gartner, Elevate Your S&OP Process From

Traditional to Demand-Driven, Todd Applebaum and Jan

Kohler, Jul 2, 2012

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Outside-In approach critical

Supply

Network

Innovation

Network

Distribution

Network

Source: Gartner, Elevate Your S&OP Process From

Traditional to Demand-Driven, Todd Applebaum and Jan

Kohler, Jul 2, 2012

Finance

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Continuous S&OP – Breaking the mold

AND, not OR

Concurrent, not just sequential

Event-driven, not just calendar-driven

Effective, and efficient

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Continuous demand, supply, and market input

Continuous S&OP – Breaking the Mold

Opera

tional P

lannin

g &

Execution

Financial Performance

Finance Consensus

Finance Scenarios

Statistical Forecast

Demand Consensus

Demand Scenarios

Sa

les &

Ma

rke

tin

g

New Product Gates

New Product Consensus

New Product Scenarios

En

gin

ee

rin

g/R

&D

Supply Performance

Supply Consensus

Supply Scenarios

Op

era

tio

ns

Fin

an

ce

Continuous S&OP

• Generate plan

• Sense when plan will not be met

• Identify future risk

• Mid-cycle adjustments

• Know sooner, act faster

Key Capabilities

• Range planning

• Decision orchestration

• Business trade-off analysis

• Scenario planning

• Assumption capture

• Concurrent planning – Time

– Function

– Hierarchy

Mo

nito

r P

erf

orm

ance C

on

tin

uo

usly

Future

Risk

Exe

cu

tive

S&

OP

Me

etin

g

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What does ‘good’ look like? Qualitative Improvements

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What does ‘good’ look like? Quantitative Improvements

Copyright © 2014 Kinaxis All Rights Reserved. Copyright © 2014 Kinaxis All Rights Reserved.

Continuous S&OP –

Breaking the Mold

Trevor Miles | e: [email protected] | m: +1.647.248.6269 | t: @milesahead

Education

Continuous S&OP - Breaking the Mold - Kinaxis presentation