Integrated Demand Planning (S&OP) - Biel - 09-19-11

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Presentation delivered at the September 19, 2011 Business Forecasting, Predictive Intelligence Summit 2011 Business Conference, sponsored by the Altamont Group, held at the Westin San Francisco Aiprort Hotel. The topic, "Integrated Demand Planning" (S&OP, Sales & Operations Planning).

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Integrated Demand Planning (S&OP) - Biel - 09-19-11

  1. 1. 1 Integrated Demand Planning Business Forecasting Predictive Intelligence Summit 2011 Monday, September 19, 2011 The Westin San Francisco Airport Hotel Millbrae, CA (Summit Sponsor: The Altamont Group) Jim Biel Management Consultant E-Mail: bielconsulting@gmail.com Phone: 847.687.5379 http://www.linkedin.com/in/jimbiel http://www.slideshare.net/jimbiel Link to Conference Info: http://lnkd.in/s35bTSJim Biel, Ph: 847.687.5379, E-Mail: bielconsulting@gmail.com, http://www.linkedin.com/in/jimbiel (September 19, 2011)
  2. 2. 2 Professional Biography – Jim Biel Phone: 847.687.5379, Chicago, IL E-Mail: bielconsulting@gmail.com LinkedIn Profile: http://www.linkedin.com/in/jimbiel SlideShare Profile: http://www.slideshare.net/jimbiel• Multi-Functional Experience, Concentrated in Consumer Product Goods (CPG) Industry (Sara Lee, Unilever, Chiquita, Pepsi) – Retail & B-to-B• Client Services position with a SaaS (software as a service) provider of trade promotion software (Adesso Solutions)• Practiced public accounting as a CPA with McGladrey; Corporate Finance Financial Planning & Analysis (FP&A) Roles• Independent Management Consulting for large and small entities• Experience in Business Forecasting, Sales Operations & Planning, S&OP, Sales Systems, ERP, CRM, Demand Planning, Business Information Management, Supply Chain, Trade Promotion Management, IT, HR, Training & Development, and Finance (Corporate FP&A & Public Accounting, CPA)• Core understanding of multiple supply chains – frozen, fresh, cold, dry, liquid• Adept at integrating relevant business concepts and processes with enterprise- wide systems, a strong business process understanding and acumen including S&OP (boot strap and retrofit S&OP implementations). – Demand Planning / S&OP Writings Available Here: http://www.slideshare.net/jimbiel Jim Biel, Ph: 847.687.5379, E-Mail: bielconsulting@gmail.com, http://www.linkedin.com/in/jimbiel (September 19, 2011)
  3. 3. 3 Discussion Topic Integrated Demand Planning• Leverage Demand Planning To: –Improve Demand Forecasting Accuracy –Drive Decision Making• A Blend of Concept & Tactics• The Recipe: Process, People, Performance (Metrics), Platform (Systems) Jim Biel, Ph: 847.687.5379, E-Mail: bielconsulting@gmail.com, http://www.linkedin.com/in/jimbiel (September 19, 2011)
  4. 4. 4 Presentation Flow• Presentation of Concepts• Interactive As We Go – Brief Discussion / QA – Concept by Concept – Share What We All Know (Learn From Each Other)• Fuller QA at End• Welcome / Encourage Contact After Presentation – E- Mail, Phone, LinkedIn (Take a Business Card)• Will Be Available After to Talk 1-on-1• Lunch / Networking Reception, etc.• Presentation Available – E-Mail Me; Posted to My LinkedIn Profile ( LI Link: http://www.linkedin.com/in/jimbiel ); Posted to My SlideShare Site ( ShPt Link: http://www.slideshare.net/jimbiel ) Jim Biel, Ph: 847.687.5379, E-Mail: bielconsulting@gmail.com, http://www.linkedin.com/in/jimbiel (September 19, 2011)
  5. 5. 5 Polling the Room • Function • Position / Title • Industry • Interest • Your Burning Question About Integrated Demand PlanningJim Biel, Ph: 847.687.5379, E-Mail: bielconsulting@gmail.com, http://www.linkedin.com/in/jimbiel (September 19, 2011)
  6. 6. 6 Integrated Demand Planning• Leverage Demand Planning To: – Improve Demand Forecasting Accuracy • Process, Structure, & Ownership • Tools, Metrics – Drive Decision Making • Process Alignment / Integration – (Demand-Supply-Finance-GM) • “Connect the Knobs” for Leadership Jim Biel, Ph: 847.687.5379, E-Mail: bielconsulting@gmail.com, http://www.linkedin.com/in/jimbiel (September 19, 2011)
  7. 7. Demand Planning 7 (The Recipe / A Holistic View) Process, People, Performance, Platform • Leverage Demand Planning To: – Improve Demand Forecasting Accuracy • DP Starts the Process (Demand-Supply-Finance) Process / • Defines Units, Revenue, Margin $ Can Be Derived People • Ownership of Forecast: Demand Owner • Unconstrained Demand / Constrained Demand • One Forecast (Demand/Supply/Finance/GM Consensus)Performance • Metric Driven: Forecast Accuracy (Level/Time Fence) Platform / • Tool / System – Foundation For Forecast Process • Business Intelligence / Collaboration Essential Process • Debate the Assumptions Not the Number Summary • How: Tools, Collaboration, and Assumptions Managed By Demand With a Defined Accuracy Metric (Start With Baseline) Jim Biel, Ph: 847.687.5379, E-Mail: bielconsulting@gmail.com, http://www.linkedin.com/in/jimbiel (September 19, 2011)
  8. 8. 8 Demand Planning• Leverage Demand Planning To: – Drive Decision Making • Process Alignment / Integration – (Demand-Supply-Finance-GM) • “Connect the Knobs” for Leadership GM Owner Dem Pl Finance Supp Pl Jim Biel, Ph: 847.687.5379, E-Mail: bielconsulting@gmail.com, http://www.linkedin.com/in/jimbiel (September 19, 2011)
  9. 9. 9 My Bias – S&OP (Sales & Operations Planning)• My Preferred Business Model To: – Improve Forecast Accuracy – Drive Decision Making The Concept is Easy, Execution Can Be ChallengingS&OP may be known as IBF (Integrated Business Forecasting), and possibly by other names Jim Biel, Ph: 847.687.5379, E-Mail: bielconsulting@gmail.com, http://www.linkedin.com/in/jimbiel (September 19, 2011)
  10. 10. 10 S&OP Defined• APICS defines S&OP as the function of setting the overall level of manufacturing output (production plan) and other activities to best satisfy the current planned levels of sales (sales plan and/or forecasts), while meeting general business objectives of profitability, productivity, competitive customer lead times, etc., as expressed in the overall business plan. Jim Biel, Ph: 847.687.5379, E-Mail: bielconsulting@gmail.com, http://www.linkedin.com/in/jimbiel (September 19, 2011)
  11. 11. 11 The S&OP Flow Demand Finance GM Generates Controls Monthly Proformas, S&OP Cost, Risk / Ops Monthly; + Results As Needed In + Metrics Review Interim + Var to Bus Pl + Future Frcst Utilize Demand Supply Outputs as Basis + Assumptions For Forecasts, + Bulk of Meeting: Daily Annual Plans, Gaps, Opps in Strategic Plans, Weekly Add Risks / Opps / Future Frcst Monthly Other Lifts / Discount Factors Balancing As Needed+ Create Business Rules (Between Demand/Supply)+ Forecast Time Fence: Rolling 12-24-36 Months+ Functional Leads & Leader Participate in Monthly S&OP Review Jim Biel, Ph: 847.687.5379, E-Mail: bielconsulting@gmail.com, http://www.linkedin.com/in/jimbiel (September 19, 2011)
  12. 12. 12 “Connecting the Knobs” (Why Integration is Important)• “Before we had Executive S&OP in the Company, I Spent A Lot of Time Turning Knobs That Weren’t Connected To Anything” – VP & GM Quote From Tom Wallace’s Book, Sales & Operations Planning, The Executive’s Guide Page 24 Jim Biel, Ph: 847.687.5379, E-Mail: bielconsulting@gmail.com, http://www.linkedin.com/in/jimbiel (September 19, 2011)
  13. 13. 13 Best Practices• One Integrated Process (Process)• People/Functional Alignment (People)• One Common Set of Metrics (Performance)• One System of Record (Platform)• All Demand Streams (Demand Supply)• Integrate All Available Data (Internal & External) - Collaboration• One Forecast (Used by All Functions * ) * With Some Caveats Jim Biel, Ph: 847.687.5379, E-Mail: bielconsulting@gmail.com, http://www.linkedin.com/in/jimbiel (September 19, 2011)
  14. 14. 14 Process, Metrics, Results PROCESS PERFORMANCE METRICS Leadership Revenue, Cost Targets (Strategic Direction) Forecast Accuracy, Working Capital Targets, Inventory Targets New Product Launch Success Demand Feeds Service Level Targets Supply; Balancing / Cycle Time / Quality - ProcessesCapacitization / Shipment (Ops Execution, Future Forecast) Finance DESIRED RESULTS ($ Scorekeeper, Forward Looking Positive P&L Outcomes Economic Advisor) Positive Working Capital Outcomes Customer Service Levels Productivity Improvements Leadership Decision Making Improvements (S&OP Process Owner) Jim Biel, Ph: 847.687.5379, E-Mail: bielconsulting@gmail.com, http://www.linkedin.com/in/jimbiel (September 19, 2011)
  15. 15. 15 Cross Functional Alignment Functional Role Business Role S&OP Role CommunicationGeneral Manager Strategic Direction Owns the Overall Owns Monthly S&OP Process – The Process Meeting; Consulted Owner Daily/Weekly as Needed (Exception)Demand Translates Strategy into Owns the Demand Daily, Weekly > Sales Demand Generation; Forecast; Accountable Interaction with Supply > Marketing Dem Planning Reports for Excess Inventory & Finance; Owns to a Demand Leader; Generated by a Monthly Demand Unconstrained Demand Forecast Miss Component of S&OPSupply Fulfillment of Owns the Fulfillment of Daily, Weekly > Finished “Constrained Demand”, the” Constrained” Interaction with > Raw Least Cost Demand Forecast at Demand & Finance; Least Cost (Balancing Owns Monthly Supply with Demand Planning) Component of S&OPFinance Economic Oversight / Counsel, Input, Risk Provides P&L Counsel Assessment, Pro- Proformas & Risk / Formas of Future Opportunity Forecasts Assessment Jim Biel, Ph: 847.687.5379, E-Mail: bielconsulting@gmail.com, http://www.linkedin.com/in/jimbiel (September 19, 2011)
  16. 16. 16 One Forecast (Linkage – S&OP to Other Plans) Strategic Use S&OPStrategic Demand Supply Target / Financial As a Gut Plan Plan Plan Check Intent Use S&OPBusiness Annual Demand Supply As Key Financial Plan Plan Plan Plan Input / Core, Plus Risks/Ops Use S&OP Latest Interim Demand Supply As Key FinancialEst / Frcst Forecasts Plan Plan Input / Core, Plus Risks/Ops Future Future Execution Demand Supply Forecast / Details, S&OP Execution Financial Active Risk / Ops Plan Plan / Forecast Discussion S&OP Outputs Validate, Support Other Planning Processes Jim Biel, Ph: 847.687.5379, E-Mail: bielconsulting@gmail.com, http://www.linkedin.com/in/jimbiel (September 19, 2011)
  17. 17. 17 Tool Box Needed to ExecuteSystems of Record & Collaboration Tools - ERP System - Spreadsheets - Collaboration Tools - Purpose Built S&OP System Capability (i.e. SteelWedge) - Inventory Management System (i.e. SmartOps) - Metrics Scorecard CapabilityNeed a well thought-out and efficient S&OP Reporting Toolto support Meetings and interactions > Numbers > Metrics Reporting > AssumptionsMake your analysts “analysts” – not data and report generatorsJim Biel, Ph: 847.687.5379, E-Mail: bielconsulting@gmail.com, http://www.linkedin.com/in/jimbiel (September 19, 2011)
  18. 18. 18 Key Learnings / Observations• Key Learnings From My Experience – The Concept is Easy – The Initial Buy-In is Fairly Easy – The Change Management Required Can Be Hard • New Process (Includes Collaboration) • New Technologies / Systems • New Accountabilities / Roles • Traditional Functional Ownership Dies Hard – Silos • Transparency Hard For Some to Swallow – Consistency & Month-to-Month Execution is Hard – Leader Needs to Keep Functional Leads Feet to the Fire – May Need a Process Coach Jim Biel, Ph: 847.687.5379, E-Mail: bielconsulting@gmail.com, http://www.linkedin.com/in/jimbiel (September 19, 2011)
  19. 19. 19 Implementation Steps • Education • Assessment • Process Design • Roles / Responsibilities • Metrics • Tools / IT Solutions • Execution / Implementation • Process Improvement • Business Performance ImprovementJim Biel, Ph: 847.687.5379, E-Mail: bielconsulting@gmail.com, http://www.linkedin.com/in/jimbiel (September 19, 2011)
  20. 20. 20 Resources• A Book: Sales & Operations Planning, The Executive’s Guide, Thomas Wallace & Robert A. Stahl• Expanded Library of Resources Available Here, – http://www.slideshare.net/jimbiel/sampop-resource-guide-biel-04-19-11 Jim Biel, Ph: 847.687.5379, E-Mail: bielconsulting@gmail.com, http://www.linkedin.com/in/jimbiel (September 19, 2011)

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