S&OP Leadership Exchange: Tailoring S&OP to Fit your Business


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Andrew McCall, S&OP Solutions Lead at Plan4Demand Discusses how tailoring your S&OP process to fit your business is critical to achieving bottom line success.

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S&OP Leadership Exchange: Tailoring S&OP to Fit your Business

  1. 1. S&OP Leadership Exchange:Tailoring S&OP to Fit Your Business With Andrew McCall
  2. 2.  Quick Introduction Key differences between Classic S&OP & a “Tailored” S&OP Process What choices do we face in Tailoring our process? How do we begin planning the evolution The Bottom Line Discussion & Closing
  3. 3.  Develop and Understanding of why tailoring S&OP can not only help create business benefit, but also create a process that fits better with your specific needs so that the change management hurdles are reduced Outline some of the key customizations or “tailoring” points that most business’s face – and how to navigate them Explain the road-mapping process so you can begin this journey in your organization
  4. 4. • Brand Management• Profitability Levers Structure• Financial Calendar • Strategic Plan Linkage &• Risk Profile Inputs • Supply Model • Demand Ownership • Supply Network • BU/OPCO Structure • Constraints • Chanel Demand • Inventory Optimization • Consumer Insights • Fill Rate Commitments • Demand Sensing A little tailoring for the right fit…
  5. 5. At its most basic level S&OP in your organization is geared towards answering 3 questions: What are our Goals/Targeted Performance Levels? What do we need to measure to monitor performance? How do we make decisions? - Lora Cecere, Supply Chain Insights
  6. 6. Initial Design & Implementation (early maturity stages) Business Specific Calendars Business Unit/OPCO Roll Ups Supply Network Modeling KPI’s to that reflect Goals/Targeted Performance Our Decision Making process & Framework Process Evolution & Maturity (later maturity stages) Multi Echelon Inventory Modeling Network Rationalization Multi Tiered Supply & Demand Orchestration
  7. 7. Item Best in Class Your Current Potential Results* StateInventory Reduction 15% - 25%Service Level Improvement 3% - 5%Excess & Obsolete Reduction 25%Forecast Accuracy (product family level) 82%  Soft Benefits: o Improvement of Accountability & Control o Detailed Assumptions Supporting Plan from Marketing and Sales, through the Planning and Operations organizations and ultimately integrated with finance. o Earlier visibility into issues o Embedded Communication & Complex Project Management Capability o Action Orientation o Exception and KPI focused* Aberdeen Group 7/2009* Tom Wallace - S&OP Cost & Benefits 2009
  8. 8. Maturity Model Early Maturity Stages: Manufacturing Driven, Sales Driven, & Business Planning Driven Manufacturing Business Demand Driven Sales Driven Planning Driven Market Driven Driven 1 Later Maturity Stages: Demand Driven, Market Driven Key Activity: Adopt or Develop a Maturity Model, then create an evaluation framework to establish where you are and what you need to work on. 1 Supply Chain Insights Maturity Model
  9. 9. Selection: Which elements orPrioritize: As you characteristics best matchdevelop your tailored Selection your specific businessroadmap – which gaps requirements – what is yourare business critical, view of “what good looks like”which are secondary. Prioritize Define Define: Develop a phased Situational Analysis: definition of each element or Measure each element to see how far off your are, and the Situational characteristic to measure “size of the prize” for closing Analysis maturity the gap
  10. 10. Key ImpactsArea Early Stages of Maturity Late Stages of MaturityPortfolio Brand Management Structure Strategic Planning Integration Stage & Gate Process Portfolio Strategy NPI Consumer Insights Pricing Co-Man/Co-Pack DecisionsDemand Demand Planning & Forecasting Demand Sensing & Shaping Statistical Modeling Market & Chanel Inputs Sales Collaboration Profitable ResponseSupply Specific Constraint Modeling Extended Supply Chain Multi Tiered Inventory Orchestration Management Strategic Commodity Linkage Network Modeled Network OptimizationPre-S&OP Optimizing Financial Drivers Profitability Management Risk & Opportunity Drivers Sense inbound & outbound market drivers
  11. 11. Maturity Model Selecting the criteria that best reflect your business – there are over 120 dimensions to select from – your model could have as many as 60 – 70 elements to measure
  12. 12. The Value of an S&OP Roadmap  Level set expectations on what S&OP is and is not  Establishing where your organization is in the Maturity Curve  Understand which elements of S&OP will be the key focus for your organization  Establishing awareness of what should happen next
  13. 13. Gap Analysis Key Strengths • Most Process Elements exist • Technical Infrastructure is implemented, Data access remains a struggle • Several Key Integration Points are in place and only required some structure/Maturity • Executive & Financial processes exist and need to be leveraged and re-sequenced Key Gaps • Communication surrounding Forecast changes • Understanding of the different elements across Bottom Line the organization (UOM ) • Post Analysis Processes • Many Process Elements currently in place provide a foundation for future state • Cross Functional understanding or process design steps • Key Elements of the Org structure exist to support the process, change • Accountability & Ownership of the forecast management will be largest challenge • Depth of Horizon • Comprehensive Design Required to Orchestrate all Pieces
  14. 14. Prioritizing Critical Business Requirements Quick Wins – Results Fund Patience Align with Technology Strategy External (Demand & Market Driven) touch points or exposure last where possible
  15. 15. Managing Your Roadmap: Results from the JourneyDesign & ImplementationDevelop/Adopt Maturity MatureModel Change Management OptimizeTailor Elements to Fit BusinessSituational Analysis Progress through Business Planning Stage Tailor Demand and MarketDevelop Roadmap Driven Elements of the Technology Matching for ProcessInitial Design & Modifications each of the early maturity phases Deploy advanced technology Tailoring for Optimize Phase of the Roadmap Establish Extended Metrics required for Supply & Demand Orchestration
  16. 16.  Tailoring S&OP requires work at both the design/implement phase, as well as while you measure your progress against a maturity model. The Maturity Model you develop should be your ultimate vision of where you are going, and reflect both your business requirements, and your specific definitions of Goals, Key Performance Indicators, and the decision making framework and process that your organization requires to drive results.  Your roadmap should outline which “customizations” you need early, and your planned evolution – regardless of how far off in the future you expect to reach your end state maturity.