Steelwedge powerpoint webinar november15

Improving Agility through S&OP
Process

Agility and Alignment Improvement
through Horizontal Processes

•
•
•
•

Revenue Management
Sales and Operations Planning
Supplier Management
Corporate Social Responsibility


Supply Chain Insights


Definition of “Agility”


Agility


Those with More Mature S&OP Goals Report
Greater Supply Chain Agility


Agility


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?


S&OP Process
Existence, Goals & Processes


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

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


Technology Evolution


S&OP Balance


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


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?


Mature Sales and Operations Planning


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


Alignment


Finance


Information Technology


S&OP Maturity Improves Alignment


S&OP Process
Plan Execution


Current Focus


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…”


Metrics: Focus on Balance
•
•
•
•
•

Revenue
Profitability
Inventory (DOI or Inventory turns)
Customer Service (case fill or perfect order)
Forecast Accuracy


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?


Functions of Center of Excellence


Center of Excellence


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


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.


Questions?


Save the Date!

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


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.


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)


Steelwedge powerpoint webinar november15

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