Improving Agility through S&OP
Process
Supply Chain Insights LLC Copyright © 2013, p. 2
Agility and Alignment Improvement
through Horizontal Processes

•
•
•
•

Revenue Management
Sales and Operations Planning
...
Supply Chain Insights

Supply Chain Insights LLC Copyright © 2013, p. 4
Definition of “Agility”

Supply Chain Insights LLC Copyright © 2013, p. 5
Agility

Supply Chain Insights LLC Copyright © 2013, p. 6
Those with More Mature S&OP Goals Report
Greater Supply Chain Agility

Supply Chain Insights LLC Copyright © 2013, p. 7
Agility

Supply Chain Insights LLC Copyright © 2013, p. 8
Supply Chain Insights

Supply Chain Insights LLC Copyright © 2013, p. 9
Evolution
At each stage of S&OP Maturity, ask the question:
1. What is the goal?
2. What should we measure?
3. What define...
S&OP Process
Existence, Goals & Processes

Supply Chain Insights LLC Copyright © 2013, p. 11
Getting to Letter Perfect
Common Practice

S
&
OP

Market-driven Focus

Ask sales

Focus on market drivers:
How do we best...
S&OP Evolution
Sales Driven
Match Demand
with Supply

ManufacturingDriven
Deliver a Feasible
Plan for Operations
Match Dem...
Technology Evolution

Supply Chain Insights LLC Copyright © 2013, p. 14
Supply Chain Insights LLC Copyright © 2013, p. 15
Supply Chain Insights

Supply Chain Insights LLC Copyright © 2013, p. 16
S&OP Balance

Supply Chain Insights LLC Copyright © 2013, p. 17
Form & Function of Inventory
Form of Inventory

Function of Inventory

Raw

Cycle Stock

Semi-finished Goods

Safety Stock...
Ease of Getting Total Supply Chain
Costs

USERS: Ease of Getting Total Supply Chain Costs

Extremely/very easy

Users

12%...
Supply Chain Insights

Supply Chain Insights LLC Copyright © 2013, p. 21
Mature Sales and Operations Planning

Supply Chain Insights LLC Copyright © 2013, p. 22
Typical Organization

CEO

Chief Customer
Officer

Chief Marketing
Officer

COO

Account Teams

Growth

VP of Supply
Chain...
Alignment

Supply Chain Insights LLC Copyright © 2013, p. 24
Finance

Supply Chain Insights LLC Copyright © 2013, p. 25
Information Technology

Supply Chain Insights LLC Copyright © 2013, p. 26
S&OP Maturity Improves Alignment

Supply Chain Insights LLC Copyright © 2013, p. 27
S&OP Process
Plan Execution

Supply Chain Insights LLC Copyright © 2013, p. 28
Supply Chain Insights

Supply Chain Insights LLC Copyright © 2013, p. 29
Current Focus

Supply Chain Insights LLC Copyright © 2013, p. 30
Quotes from Recent Interviews
• “I wish that we could talk about forecast error without
having to feel like we need an apo...
Metrics: Focus on Balance
•
•
•
•
•

Revenue
Profitability
Inventory (DOI or Inventory turns)
Customer Service (case fill ...
Benefits Received
Increasing revenue
Improving forecast accuracy
Reduction of inventory
Improving asset utilization

59%

...
Supply Chain Insights

Supply Chain Insights LLC Copyright © 2013, p. 34
Functions of Center of Excellence

Supply Chain Insights LLC Copyright © 2013, p. 36
Center of Excellence

Supply Chain Insights LLC Copyright © 2013, p. 37
Value Network Strategy
Business Strategy
What are the right things to do to increase company value?

Value-network Supply ...
Wrap-up
• S&OP has grown in importance.
• The trade-offs of the supply chain cannot be
effectively modeled using a spreads...
Questions?

Supply Chain Insights LLC Copyright © 2013, p. 40
Save the Date!

Supply Chain Insights Global Summit 2014
September 10-11, 2014
The Phoenician – Scottsdale, AZ USA

Supply...
Who is Lora?
• Founder of Supply Chain Insights
• Partner at Altimeter Group (leader in open
research)
• 7 years of Manage...
Where Do You Find Lora?
Contact Information:
lora.cecere@supplychaininsights.com
Blog: www.supplychainshaman.com
(4000 pag...
Steelwedge powerpoint webinar november15
Steelwedge powerpoint webinar november15
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Steelwedge powerpoint webinar november15

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Sales and Operations Planning maturity improves agility by 2X. But, what are the steps to get there? This question is answered in this slide deck.

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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?
  • There is a raging debate between S&OP and IBP, but isn’t the greater issue inside-out versus outside-in?
  • What is the impact of being balanced?
  • How do you tie planning to execution?
  • How does this compare to what your center does?
  • Why do you think that there is such a large gap in the supply chain centers of excellence in the facilitation of S&OP?
  • Steelwedge powerpoint webinar november15

    1. 1. Improving Agility through S&OP Process
    2. 2. Supply Chain Insights LLC Copyright © 2013, p. 2
    3. 3. Agility and Alignment Improvement through Horizontal Processes • • • • Revenue Management Sales and Operations Planning Supplier Management Corporate Social Responsibility Supply Chain Insights LLC Copyright © 2013, p. 3
    4. 4. Supply Chain Insights Supply Chain Insights LLC Copyright © 2013, p. 4
    5. 5. Definition of “Agility” Supply Chain Insights LLC Copyright © 2013, p. 5
    6. 6. Agility Supply Chain Insights LLC Copyright © 2013, p. 6
    7. 7. Those with More Mature S&OP Goals Report Greater Supply Chain Agility Supply Chain Insights LLC Copyright © 2013, p. 7
    8. 8. Agility Supply Chain Insights LLC Copyright © 2013, p. 8
    9. 9. Supply Chain Insights Supply Chain Insights LLC Copyright © 2013, p. 9
    10. 10. Evolution At each stage of S&OP Maturity, ask the question: 1. What is the goal? 2. What should we measure? 3. What defines success? Supply Chain Insights LLC Copyright © 2013, p. 10
    11. 11. S&OP Process Existence, Goals & Processes Supply Chain Insights LLC Copyright © 2013, p. 11
    12. 12. Getting to Letter Perfect Common Practice S & OP Market-driven Focus 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 Manufacturing plan Trade-offs between make, source and deliver 12 Supply Chain Insights LLC Copyright © 2013, p. 12
    13. 13. S&OP Evolution Sales Driven Match Demand with Supply ManufacturingDriven Deliver a Feasible Plan for Operations Match Demand with Supply Greater Benefit • Growth • Resilience • Efficiency Businessplanning Driven Maximize Profitability Demand Driven Maximize Opportunity Sense and Shape Demand Market Driven Maximize Opportunity and Mitigate Risk. Orchestrate Demand Market to Market Supply Chain Insights LLC Copyright © 2013, p. 13
    14. 14. Technology Evolution Supply Chain Insights LLC Copyright © 2013, p. 14
    15. 15. Supply Chain Insights LLC Copyright © 2013, p. 15
    16. 16. Supply Chain Insights Supply Chain Insights LLC Copyright © 2013, p. 16
    17. 17. S&OP Balance Supply Chain Insights LLC Copyright © 2013, p. 17
    18. 18. Form & Function of Inventory Form of Inventory Function of Inventory Raw Cycle Stock Semi-finished Goods Safety Stock Finished Goods In-transit Inventories Returned Inventories Seasonal Builds Slow and obsolete Promotional Inventories Risk Hedging New Product Launch Builds Supply Chain Insights LLC Copyright © 2013, p. 19
    19. 19. Ease of Getting Total Supply Chain Costs USERS: Ease of Getting Total Supply Chain Costs Extremely/very easy Users 12% 12% 5 24% Neutral 3 Extremely/very difficult 24% 24% EASY 29% 53% DIFFICULT ___________________________________________________________ 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? Supply Chain Insights LLC Copyright © 2013, p. 20
    20. 20. Supply Chain Insights Supply Chain Insights LLC Copyright © 2013, p. 21
    21. 21. Mature Sales and Operations Planning Supply Chain Insights LLC Copyright © 2013, p. 22
    22. 22. Typical Organization CEO Chief Customer Officer Chief Marketing Officer COO Account Teams Growth VP of Supply Chain Sales Volume Customer Service Procurement CFO Logistics VP of Manufacturing CIO Quality Cost Supply Chain Insights LLC Copyright © 2013, p. 23
    23. 23. Alignment Supply Chain Insights LLC Copyright © 2013, p. 24
    24. 24. Finance Supply Chain Insights LLC Copyright © 2013, p. 25
    25. 25. Information Technology Supply Chain Insights LLC Copyright © 2013, p. 26
    26. 26. S&OP Maturity Improves Alignment Supply Chain Insights LLC Copyright © 2013, p. 27
    27. 27. S&OP Process Plan Execution Supply Chain Insights LLC Copyright © 2013, p. 28
    28. 28. Supply Chain Insights Supply Chain Insights LLC Copyright © 2013, p. 29
    29. 29. Current Focus Supply Chain Insights LLC Copyright © 2013, p. 30
    30. 30. Quotes from Recent Interviews • “I wish that we could talk about forecast error without having to feel like we need an apology…” • “We need a balanced scorecard not an encyclopedia of metrics…” • “The metrics need to align around value…like I was trained in my Bonsai class, let the tree show you the way…” • “Every industry has their own iron triangle that defines supply chain potential. Customer service is always in the middle…” Supply Chain Insights LLC Copyright © 2013, p. 31
    31. 31. Metrics: Focus on Balance • • • • • Revenue Profitability Inventory (DOI or Inventory turns) Customer Service (case fill or perfect order) Forecast Accuracy Supply Chain Insights LLC Copyright © 2013, p. 32
    32. 32. Benefits Received Increasing revenue Improving forecast accuracy Reduction of inventory Improving asset utilization 59% ▲ 2% ▲ 5-7% 57% ▼ 10-15% 50% 42% ▲ 3-7% 38% Determining outsourced manufacturing 36% Determining procurement requirements Improving new product launch ▲ 3-6% Transportation and warehouse management ▼ 2-8% 32% 32% Capital planning and asset management Improvements in the perfect order 34% ▲ 3-6% 30% Source: Supply Chain Insights, 2012 What benefits have you received from your work with S&OP processes? Supply Chain Insights LLC Copyright © 2013, p. 33
    33. 33. Supply Chain Insights Supply Chain Insights LLC Copyright © 2013, p. 34
    34. 34. Functions of Center of Excellence Supply Chain Insights LLC Copyright © 2013, p. 36
    35. 35. Center of Excellence Supply Chain Insights LLC Copyright © 2013, p. 37
    36. 36. Value Network 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? Align demand Right product Supply chain strategy relationships platforms Demand Networks Innovation Methodologies Build organizational systems and manage talent Design Networks Joint Value Creation Strategies Design the supply response Supply Chain Network Design Continuous Improvement Capabilities Required Align supply relationships Effective Supply Networks Execution of buyside strategies Business Process How do I do the right things right? Source: Supply Chain Insights, LLC Supply Chain Insights LLC Copyright © 2013, p. 38
    37. 37. Wrap-up • S&OP has grown in importance. • The trade-offs of the supply chain cannot be effectively modeled using a spreadsheet. • Each stage must be built with the goal in mind. • Focus on continuous improvement and serving the business. Supply Chain Insights LLC Copyright © 2013, p. 39
    38. 38. Questions? Supply Chain Insights LLC Copyright © 2013, p. 40
    39. 39. Save the Date! Supply Chain Insights Global Summit 2014 September 10-11, 2014 The Phoenician – Scottsdale, AZ USA Supply Chain Insights LLC Copyright © 2013, p. 41
    40. 40. 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. Supply Chain Insights LLC Copyright © 2013, p. 42
    41. 41. Where Do You Find Lora? Contact Information: lora.cecere@supplychaininsights.com Blog: www.supplychainshaman.com (4000 pageviews/month) Twitter: lcecere 4640 followers. LinkedIn: linkedin.com/pub/loracecere/0/196/573 (5600 in the network) Supply Chain Insights LLC Copyright © 2013, p. 43
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