Current State of Sales and Operations Planning

Summary
For the Supply Chain Leader Who Wants to Rise Above

Supply Chain Insights LLC Copyright © 2019, p. 2
Sales & Operations
Planning
Study Overview
W
H
Y
Objectives:
• Gain insights on how companies are
maximizing the investments in S&OP for
supply chain management.
• An S&OP process is defined as a “tactical
planning process to forecast sales and plan
operations.”
W
H
A
T
Survey Topics Include:
1. S&OP process goals, effectiveness, balance,
execution. technology and challenges
2. Supply chain agility definition, importance and
performance
3. Company performance, including team
alignment
H
O
W
Methodology:
• Surveys conducted online by Supply Chain
Insights and partners
• Survey dates:
• Mar – May, 2019
• Requiring respondents to be at least
somewhat familiar (1-5 on 5-point scale) with
supply chain planning
W
H
O
Respondents:
• 128 respondents in total
• Respondent requirements:
• Manufacturers and Wholesalers / Distributors /
Co-operatives who sell items they manufacture
• Have an S&OP process
Study Overview

Respondents
Company Overview
67%
14%
7%
7%
2%
2%
2%
1%
5%
1%
Manufacturer
Consulting
Wholesaler / Distributor / Co-operative
Software Provider
Retailer
Third-party logistics provider (3PL)
Analyst Company
Professor/Educator
Other
Looking for work / unemployed
____________________________________________________________________
Source: Supply Chain Insights LLC, Sales & Operations Study (Mar-May, 2019)
Base: HAVE A S&OP PROCESS -- Total (n=107)
Q1. Which of the following best describes where you work?

Overview
Company Overview
USER,
76%
VENDOR,
19%
OTHER,
6%
User/ Non-User
59%
32%
8%
Process
Discrete
Other
Specific Industry
____________________________________________________________________
*Distributor = Retailer/Wholesaler/Distributor/Co-operative/ Third-party logistics provider (3PL)
Q2: Please pick the one that best defines how your company operates. This is important for classification purposes.
Q3: Which industry grouping best defines your company?

Industries
59%
18%
15%
13%
8%
3%
1%
33%
13%
6%
4%
3%
1%
1%
1%
1%
1%
8%
PROCESS (NET)
Consumer Packaged Goods
Food and Beverage
Chemical – Specialty
Pharmaceuticals / Bio Technology
Oil and Gas
Chemical – Industrial
DISCRETE (NET)
High-tech and Electronics
Industrial Manufacturing
Medical Devices
Automotive Supplier
Apparel – Fashion
Automotive
Consumer Durables
Footwear and Accessories
Heavy Equipment
OTHER
Company Industry
________________________________________
Source: Supply Chain Insights LLC, Sales &
Operations Study (Mar-May, 2019)
Q3: Which industry grouping best defines your company?

Industry Type
____________________________________________________________________
Base: HAVE A S&OP PROCESS Who Select Other at Q3 -- Total (n=6)
Q4: Which of the following best describes your company's industry?
50%
17%
33%
Process industry: manufacturing processes are
about the efficient flows of materials for
conversion (eg, chemical, consumer packaged
goods, food & beverage, oil & gas,
pharmaceuticals, plastics, tire & rubber, etc.)
Discrete industry: manufacturing of discrete
items (eg, aerospace & defense, apparel,
consumer durables, furniture, high-tech,
industrial manufacturing, medical devices, etc.)
Other
Process Industry
Discrete
Industry
Other

Adoption
____________________________________________________________________
Q7: In your opinion, which of the following best describes your company's approach to investing in innovations and/or new technologies?
22%
19%
25%
28%
6%
Innovators – typically will be the first to
adopt an innovation and willing to take a
risk.
Early Adopters – typically will be fast to
adopt an innovation, but usually not the
first.
Early Majority – typically willing to adopt an
innovation, but later than innovators and
early adopters.
Late Majority – typically will only adopt an
innovation after their peer group and will
approach with skepticism
Laggards – typically will be the last to adopt
an innovation and have a general aversion
to change
Innovators
Early Adopters
Early Majority
Late Majority
Laggards

Agenda
 Study Overview
 Sales & Operations Planning
 Supply Chain Agility
 Company Performance

84% of Companies Have an S&OP Process
____________________________________________________________________
Q9r1: How many distinct S&OP processes does your company currently have?
NUMERIC RESPONSE.
One
27%
Two
14%
Three
16%
Four
9%
Five+
19%
Don't know
15%
Number of Distinct S&OP Processes
7 Processes on average
58% have Two+
S&OP Processes
S&OP Process
Definition:
A tactical planning
process to forecast sales
and plan operations.

Satisfaction is Declining
____________________________________________________________________
Q11. When compared to your peer companies, how would you rate the effectiveness of your [primary]
S&OP process? SCALE: 1=Not at all effective, 5=Extremely effective
Q13: When you compare your current state of S&OP, how does it compare to the process three years
ago? SCALE: 1=Not at all effective, 5=Much more effective
*NOTE: Respondents answered for the S&OP process with which they are personally most familiar
Extremely effective, 5%
Effective
30%
Neutral
44%
Not
effective
22%
Effectiveness of Primary S&OP Process*
35%
rate their
primary
S&OP
process as
Extremely effective,
34%
Effective
31%
Neutral
28%
Not effective, 8%
Comparison of current State of S& OP three
years ago
65%
rate their
current
state of
S&OP

Rating SAP APO Business Leaders Compared to
Current State 3 Years Ago
____________________________________________________________________
Source: Supply Chain Insights LLC, Sales & Operations Study ((Mar-May, 2019))
Base: HAVE A S&OP PROCESS -- Effective S&OP (n=30), Other (n=54)
Q13: When you compare your current state of S&OP, how does it compare to the process three years ago? SCALE: 1=Not at all effective, 5=Much more
effective
AB Higher than other group at 90% or higher level of confidence
SAP APO vs. Other Process
SAP APO Other
A B
Much more effective 13% 35% A
4 40% 31%
3 43% 30%
2 - 2%
Not at all effective 3% 2%
Average of Ratings 3.60 3.96 A

Goal
____________________________________________________________________
Q14. Which one of the following best defines the main goal of your [primary] S&OP process?
NOTE: Respondents answered for the S&OP process with which they are personally most familiar
38%
19%
18%
17%
7%
1%
Match demand with supply
Maximize opportunity and mitigate risk using channel
data
Develop a feasible plan
Determine the most profitable plan
Other
Don't know
Main Goal of Primary S&OP Process
Most
Common
Goal

The process is out of
balance with an
emphasis on sales
and marketing
processes
Easily balancing plans horizontally
between the sales/marketing teams
and the operations teams
The process is
out of balance with
an emphasis on operations
(logistics, manufacturing, and
procurement)
More focused
on the S
21%
Balanced
between the
S and the OP
41%
More focused
on the OP
36%
Ability to Balance Their Primary S&OP Process
57%
out of balance
More than One Third Consider Their Primary S&OP
Process to Balance the “S” and “OP”
____________________________________________________________________
Q15. How would you rate your company’s ability to balance the “S” and the “OP” in the evolution of your [primary] S&OP process (even if you call it
something else)?

More Than Half Report Primary S&OP Process
Is Executed at Least Most of the Time
____________________________________________________________________
Q16. After your [primary] S&OP process is generated, how well is it typically executed? Please pick
the one that describes it best.
Not tied
to S&OP
7%
Hardly execute
17%
Execute
most of time
27%
Execute
nearly
always
13%
Monitor market
and adjust
22%
Tightly
synched to
operations
12%
Don't
know 1%
How Well Execute the Primary S&OP Process
51%
execute S&OP
process most of the
time or more

S&OP Process Alignment
____________________________________________________________________
Q17: Where is the focus of your S&OP process alignment?
28%
29%
43%
At a corporate level
At a regional level (geographic)
By divisional product lines

Spreadsheets Are the Most Common Technology Used
and SAP Is Most Common Product Used
____________________________________________________________________
Q18. What specific S&OP technology, if any, does your company currently use?
S&OP Technologies
72%
30%
28%
8%
7%
6%
5%
5%
3%
2%
2%
2%
1%
1%
1%
28%
USE TECHNOLOGY (NET)
SAP ERP
SAP APO
Kinaxis
JDA
Logility
E2Open
OM Partners
INFOR SCP
Oracle SCP
Oracle ERP
09
Arkieva
QAD
Tools Group
Other
Use 8% on average

Managing Opportunities/Risk, and Managing Process Flow
Show Greatest Performance vs. Importance Gaps
70%
85% 88%
49%
72%
48% 49%
31%
49%
55%
22%
47%
33%
44%
-39% -36% -33%
-27% -25%
-15%
-5%
-60%
-40%
-20%
0%
20%
40%
60%
80%
100%
120%
Run what-if
analyses to
determine
alternatives
Manage
opportunities and
risk analysis
Collaborate between
sales and
operations
Use technologies to
determine the most
profitable plan
Manage process
flow
Deliver role-based
views for
individuals across
the company
Deliver on corporate
social responsibility
goals
Importance vs. Performance on S&OP Elements
Importance Performance Gap (Perf - Impt)
Greatest Gaps Between
Importance and Performance
____________________________________________________________________
Q19. How important is it for your company to do each of the following? SCALE: 1=Not at all important, 7=Very important
Q20. How well does your company perform in each of these same areas? SCALE: 1=Poor, 7=Excellent, 0=Not applicable
Showing those rating elements 5-7 on 7-point scale

Performance Ratings for Company
____________________________________________________________________
Base: HAVE A S&OP PROCESS -- Manufacturers (n=72), Technologists (n=22)
Q20. How well does your company perform in each of these same areas? SCALE: 1=Poor, 7=Excellent, 0=Not applicable
Manufacturing vs. Technologist Views
Manufacturers Technologists
A B
Collaborate between sales and
operations
51% 64%
Manage process flow 47% 45%
Deliver on corporate social
responsibility goals
47% 32%
Manage opportunities and risk
analysis
46% 50%
Run what-if analyses to determine
alternatives
31% 36%
Deliver role-based views for
individuals across the company
28% 55% A
Use technologies to determine the
most profitable plan
21% 32%

For Over Half, the Budget Is an Input to the S&OP Process
but Does Not Constrain It
____________________________________________________________________
Q21. Which of the following describe the role of your company’s financial budget in your [primary] S&OP process?
36%
32%
24%
22%
18%
11%
4%
3%
The budget is an input to the S&OP process, but does
not constrain it
Revenue goal alignment is determined by the data
output of S&OP
The S&OP process is an input to the budget, but is not
constrained by it
Budget goals drive and constrain the S&OP process
for inventory
Cost goals in the budget are updated based on the
output of S&OP
We do not use financial data in our S&OP process
Other
Don't know
Role of Financial Budget in Primary S&OP Process
Most
Common

How Long Ago Did Your Company Have an
S&OP Process?
____________________________________________________________________
Base: DO NOT HAVE A S&OP PROCESS -- Total (n=7)
Q23: How long ago did your company have an S&OP process?
57%
14%
14%
0%
14%
Up to 1-2 years ago
3-5 years ago
6-10 years ago
More than 10 years ago
Don't know

Most Common Challenge with S&OP Implementation
Is Getting to Right Data in Timely Fashion
____________________________________________________________________
Q28. Thinking about when your [former] S&OP process was first implemented, what were the challenges that your company encountered with the
implementation? Please select all that apply.
58%
54%
51%
43%
42%
42%
37%
36%
33%
28%
6%
6%
Difficulty getting to the right data in a timely fashion
Lack of support from other functions
Not having technologies that support the process
Lack of understanding and support from the…
Lack of clarity on how to make a decision
Lack of skilled resources
Issues with the role of finance and the budget
Poor execution of the S&OP plan
Lack of clarity of supply chain strategy and supply…
Lack of time to execute the process
Other
Don't know
Challenges with Initial S&OP Process Implementation
36% challenges on average
Most Common

Agenda
 Study Overview

Top Supply Chain Strengths:
Many and Controlled
____________________________________________________________________
Q29. For each of the following pair of words, please pick the one that best describes your company’s supply chain today.
 Higher than other answer at 90% or higher level of confidence
40%
39%
37%
37%
37%
33%
28%
27%
29%
23%
33%
25%
45%
31%
Independent silos
Cautious
Fixed
Reactive
Uncontrollable
Room for improvement
Inside-out
Supply Chain Descriptors*
Aligned
Risk-taking
Agile
Proactive
Controlled
Working well
Outside-in
WORSE BETTER
Strengths
Challenges

Company’s Supply Chain
____________________________________________________________________
Base: HAVE A S&OP PROCESS -- Effective S&OP (n=30), Other (n=54)
Q29. For each of the following pair of words, please pick the one that best describes your company’s supply chain today.
Supply Chain Descriptors*
SAP APO Other
Gap (Effective –
Other)
A B % Point Difference
POSITIVE
ATTRIBUTES
Agile 23% 22% +1%
Outside-in 27% 31% -4%
Proactive 37% 26% +11%
Risk-taking 23% 24% -1%
Controlled 30% 22% +8%
Aligned 20% 28% -8%
NEGATIVE
ATTRIBUTES
Fixed 33% 37% -4%
Inside-out 30% 26% +4%
Reactive 27% 43% A -16%
Cautious 37% 41% -4%
Uncontrollable 43% 43% 0%
Independent silos 33% 37% -4%

Most Common Definition of Supply Chain “Agility” Is the
Ability to Adapt to Variations in Demand and Supply
____________________________________________________________________
Q30. How does your company define what it means for your supply chain to be “agile”? Please select the one that fits best.
43%
24%
21%
11%
1%
Ability to adapt the supply chain to variations in
demand and supply
Recalibration in the face of market, demand and supply
volatility while delivering comparable cost, quality and
customer
Increased flexibility to make and deliver whatever is
ordered
Shorter supply cycles: reducing the time to respond
with greater reliability
Other
Company’s Definition of Supply Chain Agility
Most
Common

Agility Performance Is 37% Lower Than Importance
____________________________________________________________________
Q31. How important is it to your company for its supply chain to be “agile”? Please base your answer on however your company defines agility. SCALE:
1=Not at all important, 7=Extremely important
Q32. How agile is your company’s supply chain today? Again, please base your answer on however your company defines agility. Your best estimate is
fine. SCALE: 1=Not at all agile, 7=Extremely agile
86%
49%
10%
28%
4%
23%
Agility
Importance
Agility
Performance
Supply Chain Agility:
Importance vs. Performance
Low
(1-3)
Middle
(4)
High
(5-7)
Agility
Performance Is
37% Lower than
Importance

Vast Majority Believe Their Primary S&OP Process Is
Important for Improving Supply Chain Agility
____________________________________________________________________
Q33. How important do you think your [primary] S&OP process is to improving the agility of your
supply chain? SCALE: 1=Not at all important, 7=Extremely important
Extremely /
Very Important
52%
Important
23%
Neutral, 17%
Not Important, 8%
Importance of Primary S&OP Process for
Improving Supply Chain Agility
75%
believe their
primary S&OP
process is
important for
improving supply
chain agility

Agenda
 Study Overview

Greatest Alignment Gaps Are with Operations & IT,
Sales & Operations, Marketing & Finance, and
New Product Development & Distribution
78%
96% 94%
74%
88% 87%
79%
94%
48% 53% 48%
54%
39%
60%
70%
50%
64% 65%
59%
77%
30%
39% 35%
48%
-38% -36%
-24% -23% -23% -21% -21% -18% -18% -14% -13%
-7%
-60%
-40%
-20%
0%
20%
40%
60%
80%
100%
120%
New
Product
Dev't &
Distrib'n
Sales and
Operations
Manufact'g
&
Procuremt
Operations
& IT
Finance &
Operations
Sales &
Finance
Marketing
& Finance
Sales &
Marketing
Marketing
& IT
Finance &
IT
Sales and
IT
CSR
&
Operations
Team Alignment: Importance vs. Performance*
Importance Performance Gap (Perf - Impt)
Greatest Gaps Between
Importance and Performance
____________________________________________________________________
Q34. In your opinion, how important is it for each of the following pairs of teams to be aligned? SCALE: 1=Not at all important, 7=Extremely important
Q35. How aligned do you believe that these same pairs of teams actually are at your company? SCALE: 1=Not at all aligned, 7=Extremely aligned
*Showing those rating elements 5-7 on 7-point scale; CSR = Corporate social responsibility

Top Areas of Business Pain Are Supply Chain Visibility/
Cross-functional/Demand/Supply Volatility,
Data, Ability to use.
____________________________________________________________________
Q37. When it comes to doing your job, which of the following are your top 5 elements of business pain? Please select no more than five.
50%
50%
48%
35%
34%
31%
29%
25%
25%
24%
24%
22%
21%
18%
17%
16%
2%
Supply chain visibility
Cross-functional alignment
Demand and supply volatility
Ability to use data
Executive team understanding of the supply chain
Organizational change management
Availability of skilled people to do the job
Software usability
Increasing speed of business
Management of value network relationships
Innovation
Globalization
Product quality and supplier reliability
Risk management
Clarity of business strategy
Increasing regulations and compliance
Other
Top Five Elements of Business Pain for Respondents
Top
Elements
of Pain

Wrap-up
• Companies are significantly less satisfied with S&OP
processes today than three years ago. Business
complexity increased faster than technology and process
evolution.
• Those deploying SAP technologies—APO or IBP– rate
their S&OP processes significantly worse at a 90%
confidence level.
• While organizations attempt to collaborate, they cannot
effectively collaborate unless they are aligned. Functional
metrics and the lack of a clear mission is a barrier to
alignment. Only one in three companies are balanced
between efforts of commercial and operations.
• Business pain levels remain constant over the past five
years of doing this study. Companies deploying
descriptive analytics and easy-to-use cloud-based
technologies with what-if capabilities are making more
progress than their peer group.

What To Learn More?

Network of Networks

About Lora Cecere
• Founder of Supply Chain Insights
• “LinkedIn Influencer”
• Guest blog for Forbes
• Author of 5 books: Bricks Matter (2012), Shaman’s Journal (2014),
Supply Chain Metrics That Matter (2014), Shaman’s Journal (2015),
Shaman’s Journal (2016), Shaman’s Journal (2017)
• 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.
Contact Information:
• Email: lora.cecere@supplychaininsights.com
• Blog: www.supplychainshaman.com (15,000 pageviews/month)
• Forbes: www.forbes.com/sites/loracecere
• Twitter: twitter.com/lcecere (9,100 followers)
• LinkedIn: www.linkedin.com/in/loracecere (262,000 followers)
• LinkedIn Influencer: www.linkedin.com/today/author/446631

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