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Breaking bad habits with continuous supply chain planning
The webinar presentation discusses the importance of continuous supply chain planning and identifies common challenges organizations face, such as limited planning linkages and difficulties in data accessibility. It emphasizes best practices for improving supply chain outcomes, including scenario planning, collaboration, and adopting the right technology to enhance accuracy and responsiveness. The document also outlines the advantages of driver-based models and a unified planning approach to optimize supply chain performance across the business.
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Breaking bad habits with continuous supply chain planning
- 2. Breaking Bad Habitswith Continuous Supply Chain Planning Webinar Presentation Mark Smith CEO & Chief Research Officer January 2018 @ventanaresearch ventanaresearchblog.ventanaresearch.com @marksmithvr
- 3. Mark Smith CEO &Chief Research Officer Mark is responsible for the overall business and research direction of Ventana Research and drives the global research agenda covering both business and technology areas. He defined the blueprint and methodology for improving business by using benchmark research to provide guidance across people, processes, information and technology. Mark is an expert in enterprise software and business technology innovations including: business analytics, big data, cloud computing, business collaboration, mobile technology and social media. Mark started Ventana Research more than a decade ago; he has worked in the software industry for 25 years leading innovations in research and technology. Mark was rated the 2011 software industry analyst of the year by The Institute of Industry Analyst Relations (IIAR). Mark is also ranked as one of the top ten technology influencers in 2012 by Human Resources Executive magazine. © 2018 Ventana Research @marksmithVR
- 4. Vivek Soneja Global Headof Supply Chain Solutions, Anaplan Vivek is Global Head of Supply Chain Solutions at Anaplan. With more than 20 years of consulting and industry experience, Vivek’s management expertise includes business/IT/operations strategy, business transformation, enterprise improvement, supply chain management, and program management. He also has strong expertise in managing and delivering large and complex technology-enabled transformation programs. © 2018 Ventana Research
- 5. © 2018 VentanaResearch Managing Supply Chains is Complex
- 6. Unifying Supply ChainRequires Continuous Planning Planning is pervasive but not always formal and rarely coordinated. PLAN Marketing Demand Sales Forecast S&OP Supply Chain Inventory Budget Strategic Long-Range Workforce Operations Capital Spending © 2018 Ventana Research
- 7. © 2018 VentanaResearch 7 • Scenario planning • Driver-based planning • Rolling periods • Integrating planning • Effective technology • Unified data & analytics • Process support • People & Collaboration Continuous Planning Requires Sophistication
- 8. Bad Habit: LimitedLinkage in Planning Cycles • Linking summary and detail information in plans is not well done by organizations today. • Less than third of organizations have direct link between plans and updates. • Most organizations still find incompatible tools (52%) across organization impeding efforts. • Lack of linkage usually is part of having disparate spreadsheets and systems that are not integrated or unified. © 2018 Ventana Research
- 9. Bad Habit: NotMake Planning Data Accessible • Manually assembling data sets and validating their accuracy is too time consuming for fast planning cycles. • Planning data is typically kept in multiple desktop spreadsheets and separate enterprise systems. • An inability to gather data makes understanding trade-offs hard or impossible. • Centralizing planning related data will help facilitate continuous planning. © 2018 Ventana Research Data Lacking to Measure Trade-Offs Few have all the numbers they need All of the numbers Most of the numbers Limited ability to measure Unable to measure 12% 30% 41% 17%
- 10. © 2018 VentanaResearch 10 Bad Habit: Spreadsheets Create Errors & Waste Time
- 11. Bad Habit: PlansBecome Stale and Not Relevant • Planning is not set-it-and-forget-it and must be continuously updated. • Demand plans become stale and out of date for 45 percent of organizations impacting supply chain planning accuracy. • Shorter planning cycles makes frequent revisions feasible. • Faster planning cycles ensure more relevant information to assess. © 2018 Ventana Research 48% 45% 36% 33% 29% Workforce Demand Capital Spending Marketing Budget Plans Do Not Remain Relevant Few sustain relevance over the planning period
- 12. © 2018 VentanaResearch S&OP and Inventory Optimization Enables Results
- 13. © 2018 VentanaResearch Embrace Four Dimensions of Planning for Success People • Ownership, collaboration Process • Faster cycles Information • Accurate, timely, accessible Technology • The right software
- 14. © 2018 VentanaResearch Unify Inventory and Demand Planning for Supply Chain
- 15. © 2018 VentanaResearch Integrated Planning Enables Supply Chain Optimization
- 16. Agile Planning EnablesSupply Chain Optimization Continuous planning promotes short planning cycles. • Shorter lags in response to changing market and competitors’ actions • Ability to explore a broader set of scenarios. • Optimize use of inventory for demand chain. • Plan, re-plan and assess at any time. © 2018 Ventana Research
- 17. © 2018 VentanaResearch Enable Workflow and Approval for Supply Chain Planning
- 18. A Better Approach:Driver Based Models Driver-based models’ advantages: • Explicitly separates units and rates to clarify assumptions and performance. • Better representation of the interconnected relationships of a business. • Easier to update for short planning cycles. • Can be built around key performance indicators to focus managers on business elements that have the greatest impact on results. © 2018 Ventana Research
- 19. © 2018 VentanaResearch
- 20. Best Practice: ScenarioPlanning for Supply Chain Key Insight: Organizations who enable scenario planning find plans more accurate. • Almost three quarters (73%) of organizations who allow for scenarios to be explored find their plans overall accurate plans. • The other third (36%) who allow limited exploration of scenarios have overall accurate plans. • Allow planning to explore and support scenarios to get more accurate plans. © 2018 Ventana Research
- 21. Best Practice: IncreaseAccuracy of Supply Chains Key Insight: Supply chain planning has highest percentage of organizations who find it accurate. • Half (47%) of organizations find supply chain planning accurate though it has room for improvement. • Below the average is S&OP which is somewhat accurate at 40 percent with plenty to do to improve. • State of planning and accuracy points to lack of focus to improve planning to best support needs of business. © 2018 Ventana Research
- 22. Best Practice: CollaborationOptimizes Planning Key Insight: Collaboration is a critical driver to the success of planning. • Over fourth fifths (85%) of organizations that collaborate effectively manage the planning process well. • The remaining set of organizations that do not collaborate effectively do not manage planning well. • Utilization of collaboration to fine tune and coordinate needs will more effectively plan their needs for supply chain. © 2018 Ventana Research
- 23. Best Practice: ProperlyEvaluate Planning Systems Key Insight: Organizations looking to evaluate software should prioritize usability, reliability and manageability as part of their deployments. • Usability has an overall importance to 92 percent of organizations. • Reliability has overall importance to 84 percent of organizations that support the performance and scalability needs of an enterprise for planning. • Balance evaluation criteria for planning systems to ensure you are able to support the overall needs of business. © 2018 Ventana Research
- 24. The Right SoftwareMatters Continuous planning requires a dedicated planning application. • Enables a company to forecast, plan, communicate and coordinate supply chain to business performance. • Supports fast cycles of iteration and optimization. • Connects all of the planning units in an organization in a single environment. • Gives a coordinate planning level flexibility that can adapt to demand and supply chain changes. • Scales to the requirements of the supply chain for continuous planning. • Automates administration – workflows, notifications, progress tracking, etc. • Facilitates collaboration along the process and workflow of the supply chain. 24© 2018 Ventana Research
- 25. Connecting Plans toImprove Supply Chain Performance 25© 2018 Ventana Research 63% said that connecting finance and business plans is important to improving performance. Continuous Planning Budget Demand Sales Forecast S&OP Supply Chain Inventory Project Strategic Long-Range Workforce Operations Capital Spending
- 26. Plan for Successin Supply Chain Seven characteristics of effective supply chain planning: © 2018 Ventana Research • Connects supply chain and business. • Accurately anticipates requirements and allocates required resources. • Everyone is on the same page aligned to the same objectives. • High participation to promote buy-in and gather front line intelligence. • Contingency planning. • Performance management oriented. • Continuously improving.
- 27. Maximize Return fromPlanning Investments © 2018 Ventana Research
- 28. Business Decisions IncreasinglyMade Outside ‘Planning’ Applications ERP CRM HCM Marketing WMS Mfg. Transactional Systems BW Essbase MDM BOBJ Tableau Data & Analytics Tools BPC APO Hyperion Planning Applications Custom Point SolutionDecision Support Day-to-day operations Data Collection Plan Systems of Record Ongoing Analysis & Collaboration Execute against plan Enable reporting against plan Enter the plan during each period Periodic decisions & assumptions Strategy / Innovation Marketing Sales Finance & HR/IT/Assets/ Facilities Supply Chain and Operations Decision Makers
- 29. Anaplan Connects &Streamlines Decision Making Across the Enterprise ERP CRM HCM Marketing WMS Mfg. Transactional Systems BW MDM BOBJ Tableau Data & Analytics Tools BPC APO Hyperion Planning Applications Day-to-day operations Data Collection Plan Systems of Record Ongoing Analysis & Collaboration Execute against plan Combine analytics & decision making Complement or replace legacy tools Ongoing analysis and decision making Data People Plans Strategy / Innovation Marketing Sales Finance & HR/IT/Assets/ Facilities Supply Chain and Operations Decision Makers
- 30. Real-life Example ERP System MESSystem Transportation Management System Warehouse Management System MRP System HCM Tool Microsoft (excel) Financial Planning system CRM Tool S&OP Management Reports Inventory Management MPS Forecasting Tool Strategic Pricing Tool Supply Optimization Tool Order Fulfillment Tool
- 31. …the new way- Connected Planning …to run your business …and realize the benefits Across one department or area Across the company One business process Speed Agility Visibility 1.5% SG&A savings through improved visibility and better decisions Forrester TEI study Faster planning cycle times —2 weeks to 2 days Del Monte Expense variance reduced by 50% from increasing exchange rate planning frequency from quarterly to monthly Intel Security Single, secure source of planning and decision dataData People Plans Greater collaboration, deeper insights, faster alignment Dynamic, continuous planning for any area of your business Across the Value Chain Network Plans optimized to minimize risk and maximize profitability Extension Ecosystem Planning: Where applicable, integration across vendors / suppliers, customers / consumers, partners / providers
- 32. Connect your datato your people and plans Integrate all your supply chain data from any source Maintain a single repository of supply chain data Quickly and systemically adjust data in one place Product Portfolio Management Demand Planning S&OP CRM ERP Distribution Planning Supply Planning HRIS
- 33. Anaplan for SupplyChain An overview of functional value drivers Product Portfolio Management • Sunset under- performing products in the most cost effective way • Forecast NPIs across demand and supply to evaluate profitability • Visibility of critical path to NPI success Demand Planning • Forecast, consolidate, and shape demand from all sources and scenarios • Maximize downstream visibility • Increase forecast accuracy at scale Supply Planning • Constrain demand and identify capacity gaps at all levels • Plan by exception for maximum productivity • Manage supply trade-offs with clear visibility of impact Sales & Operations Planning • Review both plans and metrics across all critical business functions • Address trade-offs and escalations across planning silos • Align on a common goal Strategic Policy Management Product & Customer Segmentation, Service Policy, Distribution Strategy, Allocation Rules
- 34. Collaborate in RealTime Across Your Global Network Raw Material Suppliers Contracted Producers 3rd Party Logistics Distribution Center Warehouse Customer Channel Customers Production Facilities 3rd Party Logistics Channel Partners connecting trade partners across the entire supply chain…
- 35. Executing Strategic Prioritieswith Anaplan Drive Top- line Growth Lower Operational Costs Deliver Bottom-line Results Account Segmentation Rev. & Vol. Planning Marketing Performance Mgmt. Trade Spend Mgmt. Field Sales / Retail Execution Planning New Product Modeling Demand Management Capacity Planning S&OP Inventory Optimization Production Planning Strategic Planning Brand Portfolio Planning M&A Modeling Workforce Planning Project Portfolio Planning OpEx Planning CapEx Planning Revenue Planning / Forecasting AOP Zero Based Budgeting Make Strategic Choices Commodity Price Forecasting Sales / Commercial Finance Supply Chain Corporate Product Profitability Modeling Long Range Planning
- 36. Kimberly-Clark’s Anaplan Journey DriveTop- line Growth Lower COGS Deliver Bottom-line Results Account Segmentation Rev. & Vol. Planning Marketing Performance Mgmt. Trade Spend Mgmt. Field Sales / Retail Execution Planning New Product Modeling Demand Management Capacity Planning S&OP Inventory Optimization Production Planning Strategic Planning Brand Portfolio Planning M&A Modeling Workforce Planning Project Portfolio Planning OpEx Planning CapEx Planning Revenue Planning / Forecasting P&L Modeling / AOP Zero Based Budgeting Make Strategic Choices Commodity Price Forecasting Sales / Commercial Finance Supply Chain Corporate Product Profitability Modeling Long Range Planning 2 6 4 4 1 1 1 1 5 5 1 7 1 3 3
- 37. 37 Case Study: DairyFarmers of America Integrated performance management solution – leveraging cloud architecture enables real time demand scenario analysis on market changes Data Source Data Staging Analytics Application Reporting Benefits • Cloud environment & Agile methodology • In-memory block technology supporting real-time driver based modeling • Self service for all users • Real-time demand scenario analysis on market changes • Profitability analysis at material level for budget/forecast • Sales and Operational planning Master Data Management and Data Governance SAP ECCSAP ECC GLGL GLCOPA GLMM GLSD GLMaster Data Anaplan Connect Anaplan Connect In-Memory Cloud Data Hub Model SAP Data Scvs In Memory Models Sales & Operational Planning Demand Planning and Optimization Standard COGS Models Workforce Planning SG&A to Plant Allocations Anaplan Reports In Memory Cloud Dashboards Excel Reporting on Cloud SAP BI/BOBJ Markets MEI – Trade Spend ADP - Workforce
- 38. Productivity Gains • 125%Increase Cost Savings • Supporting twice as large a sales force with a 63% reduction in staff Efficiency Gains • Sales Planning completed 3X faster Plan (10%) Analysis (30%) Data (60%) Plan (30%) Analysis (60%) Data (10%) Before Anaplan After Anaplan 2011 2012 2013 2014 2015 • Non Anaplan • 22 Resources • 1,200 Reps • Anaplan • 10 Resources • 1,600 Reps • Anaplan • 9 Resources • 1,900 Reps • Anaplan • 8 Resources • 2,200 Reps • Anaplan • 8 Resources • 2,400 Reps Cost Value Create Plan & Execute (12 Weeks) Prior Anaplan Create Plan & Execute (8 Weeks) Anaplan (Sales & Sales Finance) Non Anaplan (FP&A & HR) Create Plan & Execute (4 Weeks) Anaplan (Sales, Sales Finance, FP&A, and HR) Value Delivered 1 3 2
- 39. Connect Planning Benefits 1.5%SG&A savings through improved visibility and better decisions Forrester TEI study Informed decisions Headcount reduced by 50% in the capacity planning team Royal & Sun Alliance, Plc Productivity 40% time savings in the reporting and forecasting cycles Legal & General Plc Speed 537% ROI Forrester TEI Study
- 40. Questions? Twitter @marksmithvr & @ventanaresearch LinkedIn http://www.linkedin.com/company/ventana-research AnalystPerspectives http://marksmith.ventanaresearch.com Electronic Mail mark.smith@ventanaresearch.com
- 41. Breaking Bad Habitswith Continuous Supply Chain Planning Webinar Presentation Mark Smith CEO & Chief Research Officer January 2018 @ventanaresearch ventanaresearchblog.ventanaresearch.com @marksmithvr