Executive S&OP

Four Points Sheraton Leominster, MA April 11, 2008 Bob Stahl R.A. Stahl Company www.tfwallace.com NSMG Northeast Supply Management Group Executive S&OP What is it? How to implement it successfully?

The Mission ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Meeting World Class Standards In Getting to AND . . . Diminishing OR

The Four Fundamentals Mix ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Demand Supply Volume Demand Supply Demand Supply Demand Supply

The Evolution . . . Most Detail Aggregate Only Exac Config. . .Precise Mat’l. . .# People. . .Capital Equip . . .Factory Space ,[object Object],[object Object],[object Object],Plant Scheduling/Pull MS S&OP / Rough Cut PTF 24 Months Time Volume Mix Detailed Forecasting & Master Scheduling Super MS

Sales & Operations Planning Demand Supply Volume Mix Executive S&OP Demand Planning Supply Planning Master Scheduling Demand Pull

What is Executive S&OP? ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

An Essential Point . . . ,[object Object],[object Object],[object Object],Whether they be traditional or Lean techniques

Survival . . . PTF Horizon Detail Suicide Quadrant Aggregate Only Quadrant ES&OP

Four Fundamentals Demand Supply MIX Volume

Step #1 Data Gathering End of Month Sales Actuals, Statistical Forecasts & Supply Actuals The Executive S&OP Process Step #5 Executive Meeting Decisions & Game Plan Step #4 Pre-S&OP Meeting Conflict Resolution, Recommendations & Agenda for Exec. Mtg. Step #2 Demand Planning Management Forecast 1st-pass spreadsheets Step #3 Supply Planning Capacity constraints 2nd-pass spreadsheets Heavy Lifting

ES&OP’s Place . . . Strategic Planning Detailed Planning, Scheduling & Execution Business Planning Disconnect!!! Executive Sales & Operations Planning Turning Disconnected Knobs?

Executive S&OP . . . Executive S&OP A process to reconcile, agree upon, & communicate the company game plan Sales/Marketing (Units or $ by Family) Operations (Units/hours/ Material) Finance (Dollars) Product Dev. (New Product Issues) President

Process versus Personality Driven Organization Supply Chain Management Executive S&OP Managing the White Space Sales & Marketing Manufact- uring Product Design Finance Logistics & Distribution President/General Manager

[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Monthly Time Commitment: 1.5 Hrs. The Role of Top Management

The Real Issue . . . ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Successful Implementation . . . ,[object Object],[object Object],[object Object]

C - Software . . . ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

B - Data . . . ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Validating Assumptions Assumption Sensitivity

A - People . . . ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Engaging Top Management ,[object Object],[object Object],[object Object],Risk

[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Three Levels of Commitment . . . Low Risk

Implementation Path 1 2 3 4 5 6 7 8 9 Months Business Improvement Executive Briefing Go/No-Go #1 Kickoff Session Phase I Preparation

Getting Started Session Day #1 Day #2 Exec. Staff Champion Design Team Supporters Champion Design Team Supporters Design Team Education Planning ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Pilot Workload . . . ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Executive Briefing & Go/No-Go Decision #1 Phase I Preparation

Implementation Path 1 2 3 4 5 6 7 8 9 Months Business Improvement Live Pilot Demonstration Go/No-Go #2 Executive Briefing Go/No-Go #1 Kickoff Session Low Risk Low Cost Phase I Preparation Phase II Expansion Phase III Financial Integration

Success Requires ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Decision Making (Sales Plans, Supply Rates, Order Backlogs, & Inventories) ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],The Implementation Task : Make Executive S&OP the Framework for Decision Making

Done Properly . . . ,[object Object],[object Object],[object Object]

Making Change ,[object Object],“ In human affairs, the willed future always prevails over the logical future .” Rene Dubos ‘ A Celebration of Life’ An essay

Thanks & Good Luck ! ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Executive S&OP

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