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Game On! Sony Computer Entertainment America Plans for Profitability in its PlayStation Business with S&OP Technology

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Please download our webinar to hear how Sony Computer Entertainment America (SCEA) successfully launched the PlayStation 4 video game console in November 2013, connecting all the crucial people, …

Please download our webinar to hear how Sony Computer Entertainment America (SCEA) successfully launched the PlayStation 4 video game console in November 2013, connecting all the crucial people, processes, and data to help navigate its biggest product launch ever.

During this free IndustryWeek webinar on March 13, learn how SCEA overcame challenges by using Sales & Operations Planning (S&OP), helping it forecast demand, deal with global volatility, and reduce risk.

Prior to launching its PlayStation 4 video game console last November, SCEA automated its sales and operations planning (S&OP) to help it overcome many challenges common to manufacturers, such as demand forecasting and non-user-friendly processes built on old databases. Attend this free webinar to uncover how the company improved its forecast accuracy from 60% to 90%+, drove better profitability, and scaled its processes.

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  • 1. 1© 2014 Steelwedge Software, Inc. Confidential. Single Line of Sight: Plan, Perform, Profit IndustryWeek Webinar Game On! Sony Plans for Profitability with S&OP Technology
  • 2. Game On! Sony Plans for Profitability with S&OP Technology
  • 3. PlayStation has the Most Popular Video Games 3
  • 4. 4 Movie Here
  • 5. Sony Computer Entertainment America SCEA is a division of SONY Corp of America  PlayStation® game console introduced in USA 1995.  Responsible for PlayStation brand in USA, Canada, and Latin America.  Platform categories are Hardware, Software, Peripherals, and Digital.  Tough planning cycle with long lead times on Hardware and Peripherals. PS4 PS3 PSNPS Vita
  • 6. 2010 - Impetus for Change and Current State of S&OP ● We needed to get S&OP going for fall 2013 release of PS4. ● SCEA not organized functionally. ● Strategy executed from annual budget. ● Reporting is not planning. ● No single source of truth. At 15yrs, we were the world’s oldest start-up!
  • 7. S&OP: SCEA’s Journey 7 H1 2010 Education and Initial Assessment S&OP Roadmap H2 2010 Build Foundation Capabilities Consolidated Item Master NPI Milestone Review H1 2011 S&OP Design Complete S&OP Process Defined S&OP Calendar Established H2 2011 Pilot S&OP and Select Technology Tool Selection and Implementation
  • 8. H1 2012 Full S&OP Implemented Full Senior Exec Team & CEO included in Exec S&OP S&OP: SCEA’s Journey (cont.) 8 H1 2013 S&OP Process Expansion Innovation Pipeline Review and DSR H2 2013 S&OP Process Execution PS4 Launch Results H2 2012 S&OP Business & Scope Expansion Financial Integration Telescopic Calendar H1 2012
  • 9. Comparative Sales Results at Launch Hardware 0.9M 2.3M Software 1.9M 4.8M Peripherals 1.1M 2.1M Total Revenue $0.7B $1.3B Source: NPD US, Nov’13 ~ Jan’14, Nov’06~Jan’07. First 3 Months of Unit Sales
  • 10. Crawl-Walk-Run-Sprint: Methodology & Fast Returns 10 Phase One with : •Demand planning and an executive engagement phase of the total sales and operations planning (S&OP) life cycle. Over the course of four months, Steelwedge worked with SCEA to: •Automate the data integration process to sync plans into a single view and minimize risk of errors from multiple sources. •Provide executive-level visibility to the demand forecasts to show the financial impact of changes in forecasts to inform business priority decision- making.
  • 11. Crawl-Walk-Run-Sprint: Methodology & Fast Returns 11 Phase Two with • Synchronized new forecasting strength via supply planning and collaboration with SCEA corporate suppliers and telescopic planning. •SCEA enabled Telescopic Planning for easy movement between weekly and monthly planning periods, allowing a much closer, more frequent look at impacts to its supply and demand.
  • 12. Looping Back to Leap Forward Demand Signal Forecast Process Allocation & Supply Planning Better Demand Signal Drives Forecast Accuracy Improves Supply Planning and Allocation
  • 13. S&OP Benefits with Steelwedge 13 ● Profitability  SCEA forecast accuracy improvement from 60% to ~85% immediately drives better profitability.  SCEA now has enough data insight to push from SKUs to channels, more intelligently. ● Market Share  Better consensus planning, powered by Steelwedge, helps SCEA make better Supply, Demand and tradeoff decisions, due to more reliable data.  The faster to market, the better the market share potential. ● Scalability  The cloud-based solution from Steelwedge allows SCEA to power its process in scope with its evolving market.
  • 14. Profitable Supply/Demand Tradeoffs at Sony “Steelwedge provides the visibility we require to run our business, and delivers it in a way that is intuitive for business users to consume. Steelwedge has the secret sauce of a high performance system that is easy to understand. Steelwedge is planning on steroids. It’s a truly unique offering.” Sree Vaidyanathan Director of Business Applications Sony Computer Entertainment America 14 High ~85% forecast accuracy (up from 60%) 1 million units of PlayStation 4 preordered 2.3 million units Sales of PlayStation 4 sold in first 3 months Success by the Numbers:
  • 15. 15© 2014 Steelwedge Software, Inc.. Single Line of Sight: Plan, Perform, Profit Agility Webinar Series Game On! Sony (SCEA) Plans Profit with S&OP Technology
  • 16. 16© 2014 Steelwedge Software, Inc.. Agenda • Problem: The Spreadsheet Approach • Solution: S&OP Automation • Key SCEA Success Areas • Q & A
  • 17. 17© 2014 Steelwedge Software, Inc.. Pre-ESOP Ground Reality: Trying It With Spreadsheets Demand Planning, SCM/APS Systems ERP, Financial, & Transactional Systems SAP, Oracle, etc. Industry Data Consolidation, Review, Overrides Data Collection, Reconciliation Consensus Process ESOP Operations Marketing Sales Finance Manual Complex Security Risk Not Scalable Does this Give Executives an Agile Decision Making Process? Systems Landscape
  • 18. 18© 2014 Steelwedge Software, Inc.. Change Your Reality; Drive S&OP Adoption & Values Time L1 L2 L3 L4 Q1 Q2 Q3 Step Change Maturity & Performance Avoid Process Failure Q4 Value Accelerated Time to Value “Companies can have a hard time getting past basic levels of S&OP without technologies like Steelwedge to support the process” -Tim Payne VP Supply Chain Analysis, Gartner
  • 19. 19© 2014 Steelwedge Software, Inc.. Best Practice S&OP Aligns People, Process & Systems “We continue to look at S&OP as an aspect of business that needs terrific improvement… It’s hard to argue this shouldn’t be a central piece of management software” –Rob Kugel, Ventana Research
  • 20. 20© 2014 Steelwedge Software, Inc.. Return on Investment is Substantial Value Levers 50-70% Reduction 15-30% Improvement 20%-25% Reduction 25% Reduction in Stock-outs 1-2% Lift in Revenue Typical Results
  • 21. 21© 2014 Steelwedge Software, Inc.. S&OP Success with Steelwedge Demand Planning, SCM/APS Systems ERP, Financial, & Transactional Systems SAP, Oracle, etc. Industry Data Single Cross-Functional Planning Environment Interactive planning for: • All S&OP Stakeholders • Plan Review • Overrides • Assumptions • Scenarios • Consensus Process • Pre-S&OP • Executive S&OP • Audit Trail Systems Landscape Product / Sub-Family Customer Revenue Product / Family Territory / Region Revenue Product / Family Promotions Revenue Product / Family Region Units & Revenue Product Stock Locations Units and Inventory Family / Series Territory / Region Revenue, Margin & Cash Family / Series / BU Geo Revenue, Margin & Cash Product Production Site Units and Capacity Family / Series / BU Geo Revenue, Margin & Cash Family / Series / BU Geo Revenue, Margin & Cash Planning TermsStakeholders Account Managers Sales Managers Marketing Demand Planners Supply Planners Production Planners Finance Executives Customers Suppliers Cross-functional Planning Environment
  • 22. 22© 2014 Steelwedge Software, Inc. Confidential. Managing the Translation between Functions Sales, Marketing, Product Management, Demand Planning Demand Inventory, Production, Procurement and Allocations Supply Profit & Loss, Balance Sheet Finance Executive Dashboards Executive
  • 23. 23© 2014 Steelwedge Software, Inc. Confidential. Planning Dashboard Steelwedge Enterprise Enabled Excel Slice of view (hierarchy) Time series of key figures Planning data for review and updates Planning Views Combine Planning, Analytics in Familiar UI Capture institutional knowledge / assumptions
  • 24. 24© 2014 Steelwedge Software, Inc. Confidential. Why Steelwedge? • 100% S&OP Focus & Best Practices • Proven Track Record of Delivering S&OP • Ease-of-use, Flexible & Scalable Solution • Power of the Cloud to Leverage Big Data • Leverages Existing Investment in Systems • Crawl Walk Run Approach “We’ve built a lot of structure to power our agility with people, process and technology at Contech. I need a holistic view and Steelwedge delivers. There are very few out there that can do what Steelwedge does.” - Randy Ramsey, Director Supply Chain, Contech
  • 25. 25© 2014 Steelwedge Software, Inc.. Steelwedge is a strong leader in S&OP and IBP “Steelwedge is an ideal solution for a heterogeneous environment with multiple S&OP processes with inputs from multiple ERP and APS technologies.” Lora Cecere Founder and CEO, Supply Chain Insights “Steelwedge has grown into one of the market's leading S&OP solutions". “Steelwedge has proven that it provides a capable and scalable Stage 3 S&OP solution suitable for global deployments.” Tim Payne Research Vice President, Supply Chain Research Group, GARTNER Steelwedge was among the highest ranked in capabilities scoring and was one of “the vendors that were notable in portfolio strategy and portfolio benefits delivered.” Simon Ellis Supply Chain Practice Director, IDC
  • 26. 26© 2014 Steelwedge Software, Inc. Confidential. Crawl – Walk – Run Approach • Key to success is incremental value • Crawl: plan ahead with end in site • Walk: implement single solution • Run: measure, improve, expand • Sprint: align, integrate, monitor • Start with quick win as phase 1 & foundation • Expand the roll-out adding value as you go