0
S&OP:  The Top Ten<br />1<br />Lora Cecere, Partner<br />September 2011<br />
3<br />
Let’s start with 9<br />4<br />
#9:  What do I avoid?<br />5<br />
One number forecasting<br />You don’t need a technology.<br />80% is good enough.  <br />Standardize:  One solution provid...
#8:  How do I get started?<br />7<br />
What is the goal?<br />How do you achieve the right balance between demand and supply?<br />How do you make decisions?  <b...
Goal Evolution<br />9<br />1985: Deliver a Feasible Plan for Operations<br />1995:  Match Demand with Supply<br />2005:  D...
Lots of Options<br />10<br />Enrichment Vendors<br />
#7:  What are the barriers? Pitfalls?<br />11<br />
12<br />
Building Value Networks<br />Supply chain strategy<br />Business strategy<br />What are the right things to do to increase...
Data Source:  CFO Magazine<br />
Data Source:  CFO Magazine<br />
#6:  What is the ROI?<br />16<br />
Benefits received from S&OP processes<br />What benefits have you received from your work with S&OP processes?<br />2%<br...
18<br />Increasing ROI<br />
The Reason:  Commodity Price Pressure<br />19<br />$/LB<br />Source: Index Mundi <br />
#5:  What is the right frequency, duration and granularity of planning?<br />20<br />
What drives Variability?<br />Value:  Price, trade incentives, new products, services, freshness, responsiveness<br />Vari...
Focus<br />22<br />
#4:  What is the Best Reporting Structure?<br />23<br />
Cost<br />Volume<br />Growth<br />Alignment of metrics: Typical organization<br />24<br />
Managing Bias and Error<br />25<br />Reports to Sales<br />Reports to Marketing<br />Reports to Manufacturing<br />
#3:  Do I need a Technology?<br />26<br />
The Stages<br />27<br />
#2:  Who does it Best?<br />28<br />
Leaders sensed Market Changes 5X Faster<br />29<br />
#1:  What does Good Look Like?<br />30<br />
Aligning for balance<br />31<br />&<br />Goal<br />
Definitions<br />32<br />
Value Planning<br />Focus on continuous improvement<br />Forecast-Value Add Analysis<br />True North<br />Focus on what is...
34<br />About Us<br />Altimeter Group is a research insights group providing companies with a pragmatic approach to unders...
35<br />Thank you<br />Lora Cecere<br />lora@altimetergroup.com<br />Blog:www. supplychainshaman.com<br />Twitter: lcecere...
Ie conference september142011
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Ie conference september142011

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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
  • Transcript of "Ie conference september142011"

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