S&OP A Better Way to Run Your Business- Eyeon Solutions

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Aligning your business planning involves a focus on people, process, and technology for proper forecasting and planning.

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S&OP A Better Way to Run Your Business- Eyeon Solutions

  1. 1. 1© 2014 Steelwedge Software, Inc. Confidential. Single Line of Sight: Plan, Perform, Profit S&OP: A Better Way to Run Your Business Best Practice S&OP Aligns People, Process and Technology
  2. 2. 2© 2014 Steelwedge Software, Inc. Confidential. Speakers Danny Smith, VP Industries Steelwedge Software Jan Veerman, Managing Partner EyeOn Solutions
  3. 3. 3© 2014 Steelwedge Software, Inc. Confidential. Agenda •  S&OP: Current State and Challenges •  Realizing the Business Value from S&OP •  A Call to Action
  4. 4. 4© 2014 Steelwedge Software, Inc. Confidential. A Brief History & Review of S&OP •  S&OP: “a better way to run your business” •  Evolved out of early work in Material and Production Planning in the 1970s (by thoughts leaders like Oliver Wight, TF Wallace, others) •  Expanded to include Sales, other groups in 1980s •  Continually evolving - latest version rebranded as “Integrated Business Planning” (IBP) in 2000s •  Integrates Finance, R&D •  Executive value (i.e. risk mitigation; “what if” simulations) •  Extended to external processes
  5. 5. 5© 2014 Steelwedge Software, Inc. Confidential. Great Results when Executives are Fully Engaged “How involved is your executive team?” Closing the Gaps in S&OP Study 2013: CSCO Insights
  6. 6. 6© 2014 Steelwedge Software, Inc. Confidential. S&OP Accelerates Performance “What kind of benefits is S&OP delivering?” 0% 10% 20% 30% 40% 50% Forecast Accuracy Customer Satisfaction Asset Utilization Inventory Value Order Fill Rate Revenue Working Capital Perfect Order Return on Assets Gross Margin Inventory Turns Substantial Overwelming Sales and Operations Planning Research Study 2006: Ventana Research Most are NOT getting good results – why?
  7. 7. 7© 2014 Steelwedge Software, Inc. Confidential. Reality: Most Execs Not Fully Engaged in S&OP Process “Does your executive team own the S&OP process?” Closing the Gaps in S&OP Study 2013: CSCO Insights Why aren’t executives owning the S&OP process?
  8. 8. 8© 2014 Steelwedge Software, Inc. Confidential. Most Efforts Not Supporting Executive Needs “Rate your S&OP capabilities” 16.7% 25.4% 29.4% 35.1% 45.0% 57.4% 55.7% 57.3% 54.2% 46.1% 25.9% 18.9% 13.4% 10.7% 8.9% Integrated Supply/Demand Integrated Financial Plans Strategy Deployment Strategic Initiatives Scenario Planning Low Medium High Still operations focused vs. an enabler for executive decision makingClosing the Gaps in S&OP Study 2013: CSCO Insights
  9. 9. 9© 2014 Steelwedge Software, Inc. Confidential. Missing Big Opportunities “Rate your S&OP approach” 12.5% 70.8% 16.7% Focus Backward Results In-Between Forward Planning 29.5% 65.2% 5.3% Strategic Perspective Short Term Problem Solving In-Between Exploiting Opportunities 18.9% 67.8% 13.3% Approach to Results Passive In-Between Actionable Closing the Gaps in S&OP Study 2013: CSCO Insights Not delivering on true potential
  10. 10. 10© 2014 Steelwedge Software, Inc. Confidential. 34.2% 25.7% 28.4% 46.7% 44.4% 50.2% Hit Financial Targets Synch Operating Strategies Ensure Execution of Strategies Current Benefits Future Desired Executives Want More “Rate your current vs. desired capabilities” Reality still a long way from the potential Closing the Gaps in S&OP Study 2013: CSCO Insights
  11. 11. 11© 2014 Steelwedge Software, Inc. Confidential. Gap between Best Practices & Current Situation “Rate your S&OP process” (maturity) Closing the Gaps in S&OP Study 2013: CSCO Insights 32.2% 14.7% 8.4% 1.7% Below Average Only Adequate Excellent World Class After 30+ years of S&OP only 10% rate themselves as Excellent or World-Class
  12. 12. 12© 2014 Steelwedge Software, Inc. Confidential. Agenda •  S&OP: Current State and Challenges •  Realizing the Business Value from S&OP •  A Call to Action
  13. 13. 13© 2014 Steelwedge Software, Inc. Confidential. Key for Delivering Results: Addressing All S&OP Critical Success Factors People (Collaborate) Process (Automate/Monitor) Technology/Data (Manage)
  14. 14. 14© 2014 Steelwedge Software, Inc. Confidential. Blocking S&OP Results: Gaps with Existing Systems “How satisfied are you with your current systems capabilities?” Source: Executive Sales & Operations Planning: Process & Technology Strategies. Survey of 380 companies. Aberdeen Group 2007+ 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Demand Supply Matching What if Analysis S&OP Plan Quality & Metrics Role Based Alerts & Exceptions Fully Meets Needs Doesn't Fully Meet Needs
  15. 15. 15© 2014 Steelwedge Software, Inc. Confidential. 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 that this shouldn’t be a central piece of management software” –Rob Kugel, Ventana Research
  16. 16. 16© 2014 Steelwedge Software, Inc. Confidential. Gap between Best Practices & Current Situation “What tools do you use for S&OP?” Closing the Gaps in S&OP Study 2013: CSCO Insights 83% still using spreadsheets or limited functional- silo tools
  17. 17. 17© 2014 Steelwedge Software, Inc. Confidential. Industry Data S&OP Ground Reality: the Difficulties of Supporting the Process Marketing Operations Finance Consolidation Review, Overrides Consensus Process Pre-ES&OP Sales Manual Complex Security Risk Not Scalable Does this Give Executives an Agile Decision Making Process?
  18. 18. 18© 2014 Steelwedge Software, Inc. Confidential. People, Process & Systems Together Enable and Sustain S&OP Adoption & Values Time L1 L2 L3 L4 “Companies can have a hard time getting past basic levels of S&OP without technologies like Steelwedge to support the process” - Tim Payne, Gartner VP of Supply Chain Analysis Q1 Q2 Q3 SW Powered S&OP Q4 Value Accelerated Time to Value Step Change Maturity & Performance Avoid Process Failure
  19. 19. 19© 2014 Steelwedge Software, Inc. Confidential. Agenda •  S&OP: Current State and Challenges •  Realizing the Business Value from S&OP •  A Call to Action
  20. 20. 20© 2014 Steelwedge Software, Inc. Confidential. Next Steps •  Understand your goals for S&OP •  Translation mechanism between strategic objectives and operations •  Enforcement mechanism to deliver results •  Unifying mechanism to have all functions “march in the same direction” •  Assess your maturity •  People •  Process •  Assess your technology support •  Cross functional platform for collaboration •  Inclusiveness: easy adoption
  21. 21. 21© 2014 Steelwedge Software, Inc. Confidential. Crawl – Walk – Run Approach •  Identify gaps in people, process and systems •  Develop plans to close them •  Key to success is incremental value •  Start with quick win as phase 1 & foundation •  Expand the roll-out adding value as you go
  22. 22. 22© 2014 Steelwedge Software, Inc. Confidential. Who are we? 40 Specialists in realizing forecasting and planning improvements •  Focus on design and implementation •  System independent •  Line management experience and university educated •  Cross functional & hands-on mentality •  Proven track records in interim management •  Industry focus; industrial companies, its suppliers and customers •  Network facilitator •  Deliver concrete projects with a short throughput time (max. 100 days) and clear deliverables.
  23. 23. 23© 2014 Steelwedge Software, Inc. Confidential. EyeOn offering Research & Publications Consulting Expert Sessions / Idea Labs Benchmarks Teaching Interim … Outsourcing Industry Networks
  24. 24. 24© 2014 Steelwedge Software, Inc. Confidential. Selection of customers High Tech Food / FMCG Process Life Science Zorg Other
  25. 25. 25© 2014 Steelwedge Software, Inc. Confidential. Mythe: It is not about predicting the future.. •  “I think there is a world-market for about five computers” (Thomas J. Watson (IBM Chairman), 1943) •  “The worldwide demand for automotives will not surpass 1 million, due to the lack of qualified chauffeurs” (Gottlieb Daimler, 1901) •  “If I had asked people what they have wanted, they would have said faster horses” (Henri Ford, 1913) •  There are two sort of forecasts: Lucky or Wrong (Freek Aertsen, 1995)
  26. 26. 26© 2014 Steelwedge Software, Inc. Confidential. The objective is to enable high quality decision making!!!
  27. 27. 27© 2014 Steelwedge Software, Inc. Confidential. S&OP the cure for all diseases? GDP$growth$ S&OP$publica5ons$
  28. 28. 28© 2014 Steelwedge Software, Inc. Confidential. Most Companies Not Doing “Best Practices” S&OP Percent of respondents running S&OP process without input from the following departments Percent of respondents conducting periodic S&OP process without the following steps Source: “Recession Survival Kit; cross-industry survey conducted for Supply Chain Management Review, on behalf of Oracle and IBM, by Reed Business Information; February, 2009. Response to question: “Which factors will enable your organization to achieve your primary business goal?” n = 537 responses. 36% 47% 48% Sales Finance Manufacturing 44% 45% 47% 66% 66% Demand Planning Inventory Planning Supply Planning Supply / Demand Match Performance Review
  29. 29. 29© 2014 Steelwedge Software, Inc. Confidential. Benefits to be expected from S&OP 30%   32%   32%   34%   36%   38%   42%   50%   57%   59%   Improvements  in  the  perfect  order   Transporta=on  and  warehouse  management   Capital  planning  and  asset  management   Improving  new  product  launch   Determining  procurement  requirements   Determining  outsourced  manufacturing   Improving  asset  u=liza=on   Reduc=on  of  inventory   Improving  forecast  accuracy   Increasing  revenue   Source: Supply Chain Insights
  30. 30. 30© 2014 Steelwedge Software, Inc. Confidential. DEMAND SUPPLY Stock Stock Levels Forecast Accuracy Factory Performance (CLIP / RLIP / LAP) Service Level (On Time In Full) 1 2 3 4 4 most important performance indicators S&OP process
  31. 31. 31© 2014 Steelwedge Software, Inc. Confidential. Trends and movements in planning: Technology driven
  32. 32. 32© 2014 Steelwedge Software, Inc. Confidential. Large variety in Planning tools •  Traditional ERP vendors •  Operational focus •  Rigid •  Software as a Service (Saas) solutions •  Specific solutions •  Agile •  S&OP solutions
  33. 33. 33© 2014 Steelwedge Software, Inc. Confidential. Key Learnings S&OP Implementations •  Old school ERP implementations do not fit business requirements •  Environment is changing fast à S&OP process + platform need to be agile •  Think big, act small •  Short implementation cycles (25 – 50 days) •  SaaS Planning tools able to support S&OP process •  Master data management / data quality •  Involve business as soon as possible •  Maintenance of tool by business, not IT
  34. 34. 34© 2014 Steelwedge Software, Inc. Confidential. Ready to Keep Learning? Watch the Video Connect Your Sales Pipeline to Your Demand Plan

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