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Ie conference september142011
 

Ie conference september142011

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Presentation given at the September 14th S&OP IE event.

Presentation given at the September 14th S&OP IE event.

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  • The rate of new product innovation in theCPG industry has increased fairly steadily]innovation activityclearly reinforcesthe notion thatcompetition forconsumer attentionand spending isikl l tiofferings, today s are increasingly working to develop highlytargeted products aimed at a very finitesegment of the population. This trend islikely to drive the number of productintroductions up, while tempering the overallsales potential of any single product release.Beyond this “micro-targeting” trend, though,ithi t td l t Siover the past seven years, with food andbeverage introductions climbing nearly 3%annually and non-food introductionsgrowing at an average annual rate of justunder 9%.New UPCs have grown from 7% to over15% of all moving UPCs in IRI’s CPGquickly escalating.] t d t b M t f th is another important development. Since2004, the number of unique UPCs pershopper per year has declined 9% to 361. Intoday’s transforming economy, this numberis expected to continue to fall below the 350mark before the end of 2009.Retailers are working to streamline theirshelves and simplify the consumer shoppingcategory database. Most of these areflavor/form extensions or novelty/seasonalitems brought to market in hopes ofstimulating short-term incrementalpurchases. Only a small fraction of thesenew UPCs represent new brands or majorinnovations

Ie conference september142011 Ie conference september142011 Presentation Transcript

  • S&OP: The Top Ten
    1
    Lora Cecere, Partner
    September 2011
  • 3
  • Let’s start with 9
    4
  • #9: What do I avoid?
    5
  • One number forecasting
    You don’t need a technology.
    80% is good enough.
    Standardize: One solution provider is all you need.
    Supply chains are moving so fast they don’t have time to plan.
    Real-time S&OP is needed.
    A COOKIE-CUTTER approach can work.
    The Market Myths
    6
  • #8: How do I get started?
    7
  • What is the goal?
    How do you achieve the right balance between demand and supply?
    How do you make decisions?
    How does your organization measure success?
    How do you tie S&OP planning to execution?
    The Right Questions
    8
  • Goal Evolution
    9
    1985: Deliver a Feasible Plan for Operations
    1995: Match Demand with Supply
    2005: Demand Driven
    2011: Market Driven
  • Lots of Options
    10
    Enrichment Vendors
  • #7: What are the barriers? Pitfalls?
    11
  • 12
  • Building Value Networks
    Supply chain strategy
    Business strategy
    What are the right things to do to increase company value?
    Value-network 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
    Design Networks
    Innovation Methodologies
    Continuous Improvement
    Capabilities Required
    Demand Networks
    Joint Value Creation Strategies
    Supply Chain Network Design
    Business Process
    How do I do the right things right?
  • Data Source: CFO Magazine
  • Data Source: CFO Magazine
  • #6: What is the ROI?
    16
  • Benefits received from S&OP processes
    What benefits have you received from your work with S&OP processes?
    2%
    59%
    Increasing revenue
    5-7%
    57%
    Improving forecast accuracy
    10-15%
    50%
    Reduction of inventory
    3-7%
    42%
    Improving asset utilization
    Determining outsourced manufacturing
    38%
    36%
    Determining procurement requirements
    Improving new product launch
    3-6%
    34%
    2-8%
    Transportation and warehouse management
    32%
    32%
    Capital planning and asset management
    3-6%
    30%
    Improvements in the perfect order
  • 18
    Increasing ROI
  • The Reason: Commodity Price Pressure
    19
    $/LB
    Source: Index Mundi
  • #5: What is the right frequency, duration and granularity of planning?
    20
  • What drives Variability?
    Value: Price, trade incentives, new products, services, freshness, responsiveness
    Variety: Configurations, items, platforms, components, brands, processing technologies
    Velocity: Lead-times, order to delivery, inventory turns, time to market
    Volatility: Demand, inventory, schedules, reliability, yields
    Volume: Plants, warehouses, distribution centers/points, product flow
  • Focus
    22
  • #4: What is the Best Reporting Structure?
    23
  • Cost
    Volume
    Growth
    Alignment of metrics: Typical organization
    24
  • Managing Bias and Error
    25
    Reports to Sales
    Reports to Marketing
    Reports to Manufacturing
  • #3: Do I need a Technology?
    26
  • The Stages
    27
  • #2: Who does it Best?
    28
  • Leaders sensed Market Changes 5X Faster
    29
  • #1: What does Good Look Like?
    30
  • Aligning for balance
    31
    &
    Goal
  • Definitions
    32
  • Value Planning
    Focus on continuous improvement
    Forecast-Value Add Analysis
    True North
    Focus on what is important in YOUR business
    Move horizontal and outside-in
    What is the roadmap?
    33
  • 34
    About Us
    Altimeter Group is a research insights group providing companies with a pragmatic approach to understanding disruptive technologies. We have four areas of focus: Leadership and Management, Customer Strategy, Enterprise Strategy, and Innovation and Design.
    Visit us at http://www.altimetergroup.com or contact info@altimetergroup.com.
  • 35
    Thank you
    Lora Cecere
    lora@altimetergroup.com
    Blog:www. supplychainshaman.com
    Twitter: lcecere
    Linkedin: linkedin.com/pub/lora-cecere/0/196/573