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Presentation given at the Demand Solutions Conference on Sales and Operations Planning
Presentation given at the Demand Solutions Conference on Sales and Operations Planning
Presentation given at the Demand Solutions Conference on Sales and Operations Planning
Presentation given at the Demand Solutions Conference on Sales and Operations Planning
Presentation given at the Demand Solutions Conference on Sales and Operations Planning
Presentation given at the Demand Solutions Conference on Sales and Operations Planning
Presentation given at the Demand Solutions Conference on Sales and Operations Planning
Presentation given at the Demand Solutions Conference on Sales and Operations Planning
Presentation given at the Demand Solutions Conference on Sales and Operations Planning
Presentation given at the Demand Solutions Conference on Sales and Operations Planning
Presentation given at the Demand Solutions Conference on Sales and Operations Planning
Presentation given at the Demand Solutions Conference on Sales and Operations Planning
Presentation given at the Demand Solutions Conference on Sales and Operations Planning
Presentation given at the Demand Solutions Conference on Sales and Operations Planning
Presentation given at the Demand Solutions Conference on Sales and Operations Planning
Presentation given at the Demand Solutions Conference on Sales and Operations Planning
Presentation given at the Demand Solutions Conference on Sales and Operations Planning
Presentation given at the Demand Solutions Conference on Sales and Operations Planning
Presentation given at the Demand Solutions Conference on Sales and Operations Planning
Presentation given at the Demand Solutions Conference on Sales and Operations Planning
Presentation given at the Demand Solutions Conference on Sales and Operations Planning
Presentation given at the Demand Solutions Conference on Sales and Operations Planning
Presentation given at the Demand Solutions Conference on Sales and Operations Planning
Presentation given at the Demand Solutions Conference on Sales and Operations Planning
Presentation given at the Demand Solutions Conference on Sales and Operations Planning
Presentation given at the Demand Solutions Conference on Sales and Operations Planning
Presentation given at the Demand Solutions Conference on Sales and Operations Planning
Presentation given at the Demand Solutions Conference on Sales and Operations Planning
Presentation given at the Demand Solutions Conference on Sales and Operations Planning
Presentation given at the Demand Solutions Conference on Sales and Operations Planning
Presentation given at the Demand Solutions Conference on Sales and Operations Planning
Presentation given at the Demand Solutions Conference on Sales and Operations Planning
Presentation given at the Demand Solutions Conference on Sales and Operations Planning
Presentation given at the Demand Solutions Conference on Sales and Operations Planning
Presentation given at the Demand Solutions Conference on Sales and Operations Planning
Presentation given at the Demand Solutions Conference on Sales and Operations Planning
Presentation given at the Demand Solutions Conference on Sales and Operations Planning
Presentation given at the Demand Solutions Conference on Sales and Operations Planning
Presentation given at the Demand Solutions Conference on Sales and Operations Planning
Presentation given at the Demand Solutions Conference on Sales and Operations Planning
Presentation given at the Demand Solutions Conference on Sales and Operations Planning
Presentation given at the Demand Solutions Conference on Sales and Operations Planning
Presentation given at the Demand Solutions Conference on Sales and Operations Planning
Presentation given at the Demand Solutions Conference on Sales and Operations Planning
Presentation given at the Demand Solutions Conference on Sales and Operations Planning
Presentation given at the Demand Solutions Conference on Sales and Operations Planning
Presentation given at the Demand Solutions Conference on Sales and Operations Planning
Presentation given at the Demand Solutions Conference on Sales and Operations Planning
Presentation given at the Demand Solutions Conference on Sales and Operations Planning
Presentation given at the Demand Solutions Conference on Sales and Operations Planning
Presentation given at the Demand Solutions Conference on Sales and Operations Planning
Presentation given at the Demand Solutions Conference on Sales and Operations Planning
Presentation given at the Demand Solutions Conference on Sales and Operations Planning
Presentation given at the Demand Solutions Conference on Sales and Operations Planning
Presentation given at the Demand Solutions Conference on Sales and Operations Planning
Presentation given at the Demand Solutions Conference on Sales and Operations Planning
Presentation given at the Demand Solutions Conference on Sales and Operations Planning
Presentation given at the Demand Solutions Conference on Sales and Operations Planning
Presentation given at the Demand Solutions Conference on Sales and Operations Planning
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Presentation given at the Demand Solutions Conference on Sales and Operations Planning

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Presentation on Sales and Operations Planning given at the Demand Solutions Conference.

Presentation on Sales and Operations Planning given at the Demand Solutions Conference.

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  • How has the proliferation of S&OP Processes changed the complexity of the work? Has this helped or hurt the evolution of supply chain processes?
  • What is the impact of being balanced?
  • People speak of IBP and financial analysis. Which of these do you do? What are the issues with the ones that you have to track? Tell us the details that are stumbling blocks.
  • There is a raging debate between S&OP and IBP, but isn’t the greater issue inside-out versus outside-in?
  • How do you tie planning to execution?
  • Transcript

    • 1. Building an Effective S&OP Process Lora Cecere September 2013
    • 2. Supply Chain Insights LLC Copyright © 2013, p. 3 Cereal
    • 3. Supply Chain Insights LLC Copyright © 2013, p. 4 Supply Chain Insights is focused on delivering independent, actionable and objective advice for supply chain leaders. A company dedicated to research, turn to us when you want the latest insights on supply chain trends, technologies to know and metrics that matter. About Us
    • 4. Supply Chain Insights LLC Copyright © 2013, p. 5 This is the new bible for all supply chain executives. It provides an insider’s perspective that will prove incredibly valuable to even the most grizzled supply chain veteran. This is the next must-have business book. --Bruce Richardson, Chief Enterprise Strategist, Salesforce.com Today, the worlds of social business and supply chain management have many degrees of separation. I enjoyed working with Lora to understand what the future transformation of digital marketing to digital business could look like. --Jeremiah Owyang, Research Director, Altimeter Second Printing of Bricks Matter: 16 Five-Star Reviews on Amazon Book can be ordered from Amazon.com in Hardcopy or Digital Format
    • 5. Supply Chain Insights LLC Copyright © 2013, p. 6 18 Reports in 2012
    • 6. Supply Chain Insights LLC Copyright © 2013, p. 7 2014 Publication
    • 7. Supply Chain Insights LLC Copyright © 2013, p. 8 8 Current State
    • 8. Supply Chain Insights LLC Copyright © 2013, p. 9 Current State
    • 9. Supply Chain Insights LLC Copyright © 2013, p. 11 A Supply Chain is a Complex System with Complex Processes with Increasing Complexity
    • 10. Supply Chain Insights LLC Copyright © 2013, p. 12 The Supply Chain Effective Frontier:
    • 11. Supply Chain Insights LLC Copyright © 2013, p. 13 Mining 20 Years of Financial Data
    • 12. Supply Chain Insights LLC Copyright © 2013, p. 14 Industry Progress
    • 13. Supply Chain Insights LLC Copyright © 2013, p. 15 Source: Supply Chain Insights 2012 Average Days of Inventory by Year 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Consumer Packaged Goods 59.0 57.0 62.0 64.0 67.0 67.0 68.0 70.0 70.0 64.0 64.0 67.0 Chemical 71.5 71.9 78.2 75.1 62.0 70.3 68.1 64.3 64.3 78.6 72.9 72.8 Pharma 122.2 133.7 190.1 171.0 184.3 175.6 167.8 149.8 154.9 198.7 154.3 131.8 High Tech 93.1 57.6 46.5 48.5 35.9 37.3 43.8 36.8 34.6 41.3 34.8 30.4 Average 86.5 80.0 94.2 89.6 87.3 87.5 86.9 80.2 81.0 95.6 81.5 75.5 0.0 50.0 100.0 150.0 200.0 250.0 DaysofInventory
    • 14. Supply Chain Insights LLC Copyright © 2013, p. 16 What Is Supply Chain Excellence? • Perform better than peer group • Improve year-over-year results • Align internally on metrics • Deliver against the business strategy • Demonstrate consistency in results • Use innovation in supply chain processes • Balance. Be leaders in managing trade- offs
    • 15. Supply Chain Insights LLC Copyright © 2013, p. 17 Productivity in Manufacturing
    • 16. Supply Chain Insights LLC Copyright © 2013, p. 18 Productivity in Retail
    • 17. Supply Chain Insights LLC Copyright © 2013, p. 19 Progress (2000-2012)
    • 18. Supply Chain Insights LLC Copyright © 2013, p. 20 Impact of A Recession
    • 19. Supply Chain Insights LLC Copyright © 2013, p. 21 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
    • 20. Supply Chain Insights LLC Copyright © 2013, p. 22 Agility
    • 21. Supply Chain Insights LLC Copyright © 2013, p. 23 SHARED VISION + SKILLS + INCENTIVE + RESOURCES + PLAN + LEADERSHIP = CHANGE SKILLS + INCENTIVE + RESOURCES + PLAN = CONFUSION SHARED VISION + INCENTIVE + RESOURCES + PLAN + LEADERSHIP = ANXIETY SHARED VISION + SKILLS + INCENTIVE + RESOURCES + LEADERSHIP = FALSE STARTS SHARED VISION + SKILLS + INCENTIVE + PLAN + LEADERSHIP = FRUSTRATION SHARED VISION + SKILLS + RESOURCES + PLAN + LEADERSHIP = GRADUAL CHANGE Source: J.P. Kotter Collaboration: The Right Stuff
    • 22. Supply Chain Insights LLC Copyright © 2013, p. 24 Commodity Price Increases and Volatility
    • 23. Supply Chain Insights LLC Copyright © 2013, p. 25 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
    • 24. Supply Chain Insights LLC Copyright © 2013, p. 26 26 Driving Value through S&OP
    • 25. Supply Chain Insights LLC Copyright © 2013, p. 28 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
    • 26. Supply Chain Insights LLC Copyright © 2013, p. 29 Sales and Operations Planning
    • 27. Supply Chain Insights LLC Copyright © 2013, p. 30
    • 28. Supply Chain Insights LLC Copyright © 2013, p. 31 Alignment
    • 29. Supply Chain Insights LLC Copyright © 2013, p. 32 Finance
    • 30. Supply Chain Insights LLC Copyright © 2013, p. 33 Information Technology
    • 31. Supply Chain Insights LLC Copyright © 2013, p. 35 S&OP Process Existence, Goals & Processes
    • 32. Supply Chain Insights LLC Copyright © 2013, p. 37 S&OP Balance
    • 33. What-if Analysis
    • 34. Supply Chain Insights LLC Copyright © 2013, p. 39 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 39
    • 35. 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
    • 36. Supply Chain Insights LLC Copyright © 2013, p. 41
    • 37. Supply Chain Insights LLC Copyright © 2013, p. 42 S&OP Process Plan Execution
    • 38. Supply Chain Insights LLC Copyright © 2013, p. 43 Benefits Received from S&OP Processes 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%
    • 39. Supply Chain Insights LLC Copyright © 2013, p. 44 Case Study
    • 40. Supply Chain Insights LLC Copyright © 2013, p. 45 Days of Inventory (2000-2012)
    • 41. Supply Chain Insights LLC Copyright © 2013, p. 46 Growth (2007-2012)
    • 42. Supply Chain Insights LLC Copyright © 2013, p. 47 47 The Role of Forecasting
    • 43. Supply Chain Insights LLC Copyright © 2013, p. 48 A forecast is not a forecast is not a forecast.
    • 44. Supply Chain Insights LLC Copyright © 2013, p. 49 49 Business Planning Forecasting Constrained Forecast Increasing levels of granularity Increasing need for value network strategy alignment A Forecast is not a Forecast is not a Forecast
    • 45. Supply Chain Insights LLC Copyright © 2013, p. 50 One Number Forecasting is a HOAX.
    • 46. Supply Chain Insights LLC Copyright © 2013, p. 51 Supply-side Views Downstream Data Account-Level A VMI C Distribution Network Supplier Supplier Supplier Supplier Distribution Network Distribution Network Demand-side Views Hole in Enterprise Architectures
    • 47. Supply Chain Insights LLC Copyright © 2013, p. 52 Supply-side Views Demand Translation Downstream Data Account-Level A VMI C Distribution Network Supplier Supplier Supplier Supplier Distribution Network Distribution Network Demand-side Views
    • 48. Supply Chain Insights LLC Copyright © 2013, p. 53 Talent Shortage
    • 49. Supply Chain Insights LLC Copyright © 2013, p. 54 Gap by Position
    • 50. Supply Chain Insights LLC Copyright © 2013, p. 55 • S&OP has grown in importance. • The trade-offs of the supply chain cannot be effectively modeled using a spreadsheet. • Focus on continuous improvement and serving the business. Wrap-up
    • 51. Supply Chain Insights LLC Copyright © 2013, p. 56 Questions?
    • 52. Continue the Conversation? www.supplychaininsightscommunity.com
    • 53. Supply Chain Insights LLC Copyright © 2013, p. 58 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.
    • 54. Supply Chain Insights LLC Copyright © 2013, p. 59 Where Do You Find Lora? Contact Information: lora.cecere@supplychaininsights.com Blog: www.supplychainshaman.com (5000 pageviews/month) Twitter: lcecere 5200 followers. LinkedIn: linkedin.com/pub/lora- cecere/0/196/573 (5200 in the network)

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