Orchestrating the Supply Chain: Harmonizing S&OP, Planning & Analytics


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866.P4D.INFO | Plan4Demand.com | Info@plan4demand.com
Presented by Sharon Nelson and Andrew McCall at SAPInsider #SCM2013 March 6th, 2013
This session reviews core elements of supply chain planning: Demand planning and forecasting, consensus forecasting, supply planning, DRP, CPFR, and the overarching S&OP process that drives these elements.
Examine components of the SAP solution, as well as discussion of how the SAP S&OP HANA environment (cloud-based) and the SAP instance need to be established to work together. Gain an understanding of the roles that different application components play. Learn how to design and blueprint so that enabling technology can be added to the process in stages. Get a clear vision of what a high-performing planning process looks like when these tools and practices are in place. Walk away from this session with a set of practical steps needed to take to get started on this process.
For more information, a PDF, or the video recording contact Jaime.Reints@Plan4Demand.com
Check out more information on additional topics at www.plan4demand.com

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Orchestrating the Supply Chain: Harmonizing S&OP, Planning & Analytics

  1. 1. March 6th, 2013 Partnering for Success
  2. 2. Page 1 Andrew McCall Sharon Nelson • Solution Director, Sales & Operations Planning @ • Managing Director @ Plan4Demand Plan4Demand • Manages all aspects of Consulting & Delivery for our • 28 Years in Supply Chain, Operations & Finance customers • Vertical Expertise in Food & Bev, CPG, Beer/Wine/Spirits, • Specializes in Business Transformation and Process Chemical, Paper & Wholesale Distribution Improvement • Brings a Holistic view of People, Process & Technology to the • Has been a CIO at IBM Network Hardware, ABB Kent Taylor space & Easton Bell Sports • Lives in the Frozen North of New Hampshire • Lives in the Warmth of Sunny South Florida
  3. 3. Page 2  Overview & Intro  Planning Today - Driving Competitive Advantage  The Role Technology Plays  Functionality  Infrastructure  Your Maturity Model – What Does Good Look Like to You?  Design Considerations – Best Practices in your industry and SCN  Phasing & Pre-Requisites  Using Technology to DRIVE Maturity, not as a stage gate activity  Measuring Success  Key Take Aways  Q&A
  4. 4. Page 3 Overview & Intro • Take Away an Understanding of Planning Today: Challenges, Changes & Opportunities • A clear picture of the evolving role of enabling technology and how it is shifting • Creating a Vision within your organization, and driving progress towards that vision • Measuring Success
  5. 5. Page 4 Planning Today • Planning?? Pervasive • Horizontal Orientation: What does it look like? • Key Points in Driving Linkage
  6. 6. Page 5 • Demand Plan • Supply Plan • Production Plan • S&OP Forecast • Rough Cut Capacity Plan • Annual Operating Plan • Finite Plan & Schedule (Budget) Tactical • Distribution Plan • Standard Cost • Transportation Plan • Brand Plan • Labor Plan • Strategic Logistics Plan • Materials Plan Operational Strategic • Strat Plan • CapEx Plan • Portfolio Plan/Product Roadmap • IT Roadmap
  7. 7. Page 6 Demand Management S&OP Supply Management History Demand Supply (Unconstrained (Constrained Inventory product market demand) availability) Sensing Supportable Demand Operational Planning & Execution Demand Signal Sourcing Production Deployment Fulfillment Sourcing, Production, Logistics & Fulfillment Planning
  8. 8. Page 7 Source: Supply Chain Insights LLC
  9. 9. Page 8  Challenges  Cross Functional Orientation: Requires that process, knowledge and data flows from area to area, and through a multitude of systems and views – creating a unified flow through these areas is easier said than done!  Different Metrics & KPI’s that need to be “harmonized” to drive towards and alignment with overall strategy  Data Explosion – Exponential: Requires and strategy to support – collection and use are two different strategies.  Multiple Supply Chains Optimize on different points: Customer Facing Supply Chain vs. Operational  External Focus: Market & Competitive Conditions continue to evolve and change while we try and get everything else aligned. In many cases, requirements are changing faster than we can address them.
  10. 10. Page 9 The Role Technology Plays • Functionality • Infrastructure • Emerging Capabilities
  11. 11. Page 10
  12. 12. Page 11 Applications – Tight coupling between application server and SAP HANA® Tight Coupling Today  With large data volumes, reading Mid-Term (Plan) information becomes a bottleneck ABAP AS ABAP AS Next Generation App  The advent of next generation Next Generation Apps OLAP enables a great deal of new Procedure code Program code capabilities in users hands Fast data  Next generation applications will compile transfer delegate data intense operations & deploy DB Data in Runtime  The runtime environment executes memory complex processes in memory SAP HANA  In-memory computing returns results by pointing apps to a location in shared memory
  13. 13. Page 12 Corporate BI Enterprise Data Warehouse (BW) SAP HANA (nxt) Local BI Virtual Virtual Virtual New Applications Data Mart Data Mart Data Mart SAP ERP 1 SAP ERP n Non SAP (or CRM, SRM, SCM) (or CRM, SRM, SCM) Bus App ... Database Database Database
  14. 14. Page 13 Mid-Term • SAP Trade Promotion Management • SAP Merchandise and Assortment Planning Short-Term • SAP Planning and Consolidation • Sales and Operations Planning • SAP Strategic Workforce Planning • Predictive Segmentation & Targeting • SAP Dynamic Cash Management • Customer Revenue Performance Mgmt • SAP Smart Meter Analytics • Demand Signal Repository • Profitability Analysis with SAP ERP • And additional solutions in the pipeline
  15. 15. Page 14 Was… Is Evolving To… Batch Driven Real Time Get the Process right before putting Use Technology to drive process technology in place maturation Cross Functional Data Silos Horizontal Data Flow Layer Disconnected Metrics Dynamic Analytical Layer Volume Forecast that is Converted to Toggle between Volume, Financial, & Financial Forecast Profitability Sales History as Driver Sales History, Channel, Consumer, Market & Category Data all being used to develop insight One Number as Goal Managing all Numbers and the drivers of differences between each simultaneously
  16. 16. Page 15
  17. 17. Page 16 Your Maturity Model: Defining Your Vision • Functionality • Infrastructure • Emerging Capabilities
  18. 18. Page 17 Key Objectives of Supply Chain & Operations Management Strategic Tactical • Optimized long range capacity • Credible Demand Forecast (production & fulfillment) • Accuracy/Stability • Effective Sourcing (Where Made, • Visibility Raw Material, Resins) • Priorities • Supported new product development/product • Alignment on Pre-Build transformation/ innovation Requirements & Lead Time Support • Alignment with Annual Operating • Visibility to planned Plan/LRStrat Plan production/deployment • Demand Responsive Inventory & Mix • Reliable production/deployment Positions execution Enablers Management Business Insight Organization & Processes, Information Scope & Oversight / Metrics Talent Policies & Technology & Interdependencies Controls Data
  19. 19. Page 18 Demand Management Supply Management  Forecast Error & Bias  Capacity Availability  Mid/Long Volume Projections  Inventory Performance & Projections  Forecast Risks & Opportunities  Customer Service Levels  Customer Projections  Demonstrated Performance  Brand Projections  Capital Requirements & Projections  Volume Assumptions 3/11/2013  TDC Performance & ProjectionsSource: Supply Chain Insights LLC  Supply Assumptions
  20. 20. Source: Supply Chain Insights LLC
  21. 21. Page 20 Measuring Success • Moving the Needle towards the Vision: Measuring Maturity • KPI’s & Benefits
  22. 22. Page 21 Executive Continuous Overall Portfolio Demand Supply Pre-S&OP Review Improvement Survey Data 1.9 1.5 1.6 1.6 1.1 1.4 1.2 MM Target 4 4 4 4 4 4 4
  23. 23. Page 22 Top Value Opportunities Delivered by S&OP  Improved customer service and revenue generation  Improved coordination between Sales / Marketing / Operations/Finance  Improved forecast accuracy  Better new-product introductions  Inventory reduction – The right mix of inventory  Reducing the cost of obsolete inventory  Capacity Utilization & Efficiency
  24. 24. Page 23 Item Best in Class Results* Inventory Reduction 15% - 20% Service Level Improvement 3% - 5% Excess & Obsolete Reduction 25% - 40% Unplanned Transfer & Expediting Cost 5% - 10% Overtime Labor Reduction 10% - 12% Difficult to Quantify/Softer Benefits  Portfolio Management Capabilities * Aberdeen Group 7/2011 * Tom Wallace - S&OP Cost & Benefits 2010  SKU Rationalization & Complexity Management  Improvement of Accountability & Control  Earlier visibility into issues  Embedded Communication & Complex Project Management Capability  Action Orientation  Exception and KPI focused
  25. 25. Page 24 Key Take Aways • Companies Successful in the space are defining an overall transformation in their planning culture – this is not a “project” • Enabling Technology has “leap frogged” from the end of a transformation to a DRIVER of transformation – this can help us push maturity faster. • It is critical to establish a vision and maturity model for YOUR planning environment • Establishing Success Criteria up front helps organization persevere through what is a long cycle of change and keep an eye on performance.
  26. 26. March 6th, 2013 Partnering for Success
  27. 27. For Additional Resources: Contact: Jaime Reints 412.733.5011jaime.reints@plan4demand.com
  28. 28. DisclaimerSAP, R/3, mySAP, mySAP.com, SAP NetWeaver®, Duet®, PartnerEdge, and other SAP products and servicesmentioned herein as well as their respective logos are trademarks or registered trademarks of SAP AG in Germanyand in several other countries all over the world. All other product and service names mentioned are the trademarksof their respective companies. Wellesley Information Services is neither owned nor controlled by SAP.