Page1                          S&OP LEADERSHIP EXCHANGE:        GETTING TO “ONE NUMBER”, S&OP MYTH OR REALITY             ...
   Goals for the session   Overview - What do we mean by “one number” and why is it such a struggle?   The Myth – What ...
   Clearly Defining a “One Number Plan” and what that means from an S&OP    perspective   Outline some of the most commo...
•   Demand Plan                                                                         •   Supply Plan                   ...
   A “best in class” S&OP process produces a single set of numbers across Sales,    Marketing, Supply Chain, Operations/M...
   We need to distill a single, agreed    upon operating plan from all of    these numbers, planning activities,    actua...
• Launch Projections &•   Plan/Changes to Plan?                                                        Assumptions•   Gaps...
   Develop core Principles       Transparency       Communication       Decision Making Thresholds & Guidelines   Cat...
   Annual Operating Plan Details:       170 Million Units       Generating a Gross Profit of $405MM   Period 5 S&OP De...
   What do we tell them?       Educate on New S&OP Process – No longer just “plugging in plan” to complete the horizon –...
   This is complicated! – Every organization has specific, tailored needs in this space, and    an off the shelf, generic...
May 23rd                   June 20thHarnessing Innovation    Global Rollouts – Balancing& Planning Challenges   Standardiz...
Upcoming SlideShare
Loading in...5
×

S&OP Leadership Exchange: Getting to One Number - S&OP Myth or Reality?

600

Published on

866.P4D.INFO | Plan4Demand.com | Info@plan4demand.com

Getting to One Number is considered to be the ''Promised Land'' and a critical goal of an effective S&OP process. But what does it really mean? And what are the realities and pitfalls of a One Number system?
How do we work towards a plan that makes sense, and still accommodates the needs of other areas of the business, and users of the number?

A business of any size has the need to communicate projections both internally and externally in a number of different ways.

Has your view of One Number gotten in the way of a good Sales & Operations Planning process?
Check out this webinar on-demand at http://plan4demand.com/Video-Getting-to-One-Number-SOP-Myth-or-Reality

Published in: Business, Technology
0 Comments
1 Like
Statistics
Notes
  • Be the first to comment

No Downloads
Views
Total Views
600
On Slideshare
0
From Embeds
0
Number of Embeds
1
Actions
Shares
0
Downloads
6
Comments
0
Likes
1
Embeds 0
No embeds

No notes for slide

S&OP Leadership Exchange: Getting to One Number - S&OP Myth or Reality?

  1. 1. Page1 S&OP LEADERSHIP EXCHANGE: GETTING TO “ONE NUMBER”, S&OP MYTH OR REALITY The Web Event will begin momentarily with your host: Andrew McCall April 18th, 2012 plan4demand
  2. 2.  Goals for the session Overview - What do we mean by “one number” and why is it such a struggle? The Myth – What do people think of when they hear “one number” and why doesn’t that make sense? What should it mean? Realistic “one number” planning? S&OP – Step by Step, where does the noise in this discussion come from? Case Study: Effective “One Number” Planning The Bottom Line Q&A/Closing
  3. 3.  Clearly Defining a “One Number Plan” and what that means from an S&OP perspective Outline some of the most common misunderstandings and pitfall’s of a “One Number” system Identifying common “noise” that is produced by process step within the S&OP process Discuss some specific actions that can help you start to get this difficult process managed in your organization
  4. 4. • Demand Plan • Supply Plan • Production Plan • Rough Cut Capacity Plan • Finite Plan & Schedule• S&OP Forecast • Distribution Plan• Annual Operating Plan Tactical • Transportation Plan (Budget) • Labor Plan• Standard Cost • Materials Plan• Brand Plan• Strategic Logistics Plan Operational Strategic • Strat Plan • CapEx Plan • Portfolio Plan/Product Roadmap • IT Roadmap
  5. 5.  A “best in class” S&OP process produces a single set of numbers across Sales, Marketing, Supply Chain, Operations/Manufacturing, Finance and the Executive team. The S&OP forecast needs to drive budget revisions during the course of the year to reflect the reality of changing business conditions. The Plan is the Plan – we can’t change any aspects of it and maintain it’s integrity as a communication tool for goal attainment If we’re going to have a one number system, finance can not use any level of hedge when communicating performance. YTD Actual + BOY Projection must equal AOP or we must communicate a change to plan.
  6. 6.  We need to distill a single, agreed upon operating plan from all of these numbers, planning activities, actuals and data sources The development of this Plan should make it very easy to achieve the objectives of S&OP:  What are our Goals?  How do we measure our progress or gaps to those goals?  How do we leverage this information to make decisions Sales, Finance, Brand Management and Operations are still going to have a need for other numbers to communicate with – but they don’t drive the plan!
  7. 7. • Launch Projections &• Plan/Changes to Plan? Assumptions• Gaps • Volume• Risks & Opportunities • Cannibalization• Financial Projections • Brand Volume Plans • Pricing Strategies • Capacity Availability • Sales Quota • Demonstrated Performance • Revenue Targets • Operational Standards • Adopting the S&OP Plan • Demand Forecast • Inventory Planning & • Review & Action Surrounding: • Customer Volume Working Capital Targets • Gaps Projections • Supplier Performance R&O • • Brand Forecast • Communicating the Plan • Distribution Drives Inputs? Multiple Numbers? Noise?
  8. 8.  Develop core Principles  Transparency  Communication  Decision Making Thresholds & Guidelines Categorization  Assumption Inputs  Gap Types & Quantification  R&O Single Number Operations Plan  Hedge – Communication Vehicle, not buried into plan  Slot Categories into the reporting process  Stretch Goals – Realistic view of attainment, does this create risk, or opportunity  Demonstrated performance – must drive assumptions, NOT Budget  Beware the “self fulfilling prophecy” – i.e. Working Capital cuts to match hedge scenario handcuffs operations from supporting Gap closers
  9. 9.  Annual Operating Plan Details:  170 Million Units  Generating a Gross Profit of $405MM Period 5 S&OP Details:  Actuals + Forecasted Units for the balance of year = 164 million (6MM unfavorable)  Actuals + GP Forecast of $395MM ($10MM unfavorable) Quarterly Board Meeting the following week!!  What do we tell them? We can’t tell them we’re changing plan that was adopted in the Q1 Board Meeting  How do we communicate Gap, Risks & Opportunities?
  10. 10.  What do we tell them?  Educate on New S&OP Process – No longer just “plugging in plan” to complete the horizon – find and plug amounts to make AOP still seem feasible.  Earlier delivery of “Reality Based Forecast” allows for Gap closing activities and investment to be discussed and reviewed.  If we sugar coat it, the view of next year starts to take hold, and we’re stuck with a “top down” plan that may be too aggressive.  Outline AOP data compared with S&OP Forecast  Defines Gap  Outlines R&O  Communicates Action Plans How do we communicate Gap, Risks & Opportunities?  Gaps outlined as:  Risk to Plan – Areas where planned performance is not trending to meet the plan  Risk to Forecast – Areas where the projections have risk (+ or -)  Risks are quantified so they can be clearly communicated  Opportunities are developed and quantified as strategies to close the gap  Overall communication outlines the issues, and what the company is doing to meet these challenges.  The AOP remains unchanged, finance decides hedge/communication strategy externally by vetting and approving the R&O.
  11. 11.  This is complicated! – Every organization has specific, tailored needs in this space, and an off the shelf, generic approach to this creates hurdles. The impacts here run through every area of the organization – from Sales & Marketing, thru Supply Chain & Operations, into Finance, the Executive Suite, the Boardroom and Wall Street. Getting “reality” built into this process here helps drive the critical piece of change management so many S&OP/IBP processes miss – cementing this as the CORE of how we plan, and not just another input to disparate planning processes. Getting this right not only creates a better S&OP process, but streamlines the Annual Operating Plan/Budget development and long range planning cycles like Strategic Planning, Product Roadmap Development & Strategic Portfolio Planning. Given the weight of this, must be owned at the executive level.
  12. 12. May 23rd June 20thHarnessing Innovation Global Rollouts – Balancing& Planning Challenges Standardization & Localization
  1. A particular slide catching your eye?

    Clipping is a handy way to collect important slides you want to go back to later.

×