Does Your S&OP Deliver Agility?

1© 2013 Steelwedge Software, Inc. Confidential.
November 19, 2013
With Lora Cecere and Ed Lewis
Does Your S&OP Deliver Agility?

Improving Agility through S&OP
Process

• Revenue Management
• Sales and Operations Planning
• Supplier Management
• Corporate Social Responsibility
Agility and Alignment Improvement
through Horizontal Processes

Supply Chain Insights

Definition of “Agility”

Agility

Those with More Mature S&OP Goals Report
Greater Supply Chain Agility

 Extremely agile
 Agile
 Neutral
 Not agile
 Not very/at all agile
Quick Poll: How Agile
Is Your Supply Chain?

Agility

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

S&OP Process
Existence, Goals & Processes

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

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

Technology Evolution

S&OP Balance

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

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

Quick Poll: How easy is it for your
company to get total supply chain costs?
 Extremely/very easy
 Easy
 Neutral
 Difficult
 Extremely/very difficult

Mature Sales and Operations Planning

CostVolumeGrowth
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

Alignment

Finance

Information Technology

S&OP Maturity Improves Alignment

S&OP Process
Plan Execution

Current Focus

• “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

• Revenue
• Profitability
• Inventory (DOI or Inventory turns)
• Customer Service (case fill or perfect order)
• Forecast Accuracy
Metrics: Focus on Balance

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%

Functions of Center of Excellence

Center of Excellence

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

• 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

Save the Date!
Supply Chain Insights Global Summit 2014
September 10-11, 2014
The Phoenician – Scottsdale, AZ USA

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.

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. 46Outline
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
PlanningMarketing

S&OP Sales
Statistical Forecast
Demand Planning
Revenue Planning
PipelineManagement
Sales Collaboration
Attach Rate Planning
LifecycleManagement
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
Confirmed S&OP Sales Plan

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

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

4.90 Exec S&OP - S

Dashboard

Does Your S&OP Deliver Agility?

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