operation management

1. <Insert Picture Here>
<Insert Picture Here>
Top 10 Success Factors for Sales and Operations Planning
Joachim Schulte, Senior Sales Consultant

2. The following is intended to outline our general
product direction. It is intended for information
purposes only, and may not be incorporated into
any contract. It is not a commitment to deliver any
material, code, or functionality, and should not be
relied upon in making purchasing decision. The
development, release, and timing of any features
or functionality described for Oracle’s products
remains at the sole discretion of Oracle.
Safe Harbor Statement

3. <Insert Picture Here>
Agenda
• Challenges with
Sales & Operations Planning
• Oracle Demantra overview
• Using Oracle Demantra

4. Company
• One of South Africa’s leading CPG companies, producing tea, coffee, biscuits, and
snacks
• Many new product introductions
• Extensive promotional activity
Planning problem solved
• Consensus demand and supply plans
Unique aspects of implementation
• Introduction of an integrated Sales and Operations Planning Process
• Improved forecast accuracy by 13%
• Cut finished goods stock levels by 20%
• Improved service levels from 94% to 96%
• More effective production planning
Consensus demand and supply plans
National Brands Ltd.

5. Demand Driven leaders have:
• 15% less inventory
• 17% stronger order fulfillment
• 35% shorter cash-to-cash cycle
times
Which translates to:
• 60% better profit margins
• 65% better EPS
• 2-3x the ROA
0
50
100
150
200
250
300
350
Strong Weak
Perfect Order Inventory
Cash-to-Cash SCM Costs
Source: AMR Benchmark Analytix
Improved Demand Management
is the first important step !
Demand Driven – Significant Benefits

6. Multiple,
non-integrated
systems
Manual processes
Multiple data sources
Financial
Planning
New Product
Planning
Sales
Quotas
Production
Planning
Measurement
and Reporting
Marketing
Forecasting
Your Company
Low forecast accuracy
Departmental orientation to demand forecasting
Misalignment between metrics and objectives
Not tied to Sales and Operations Planning process
?
Traditional Approach – Disconnected
High latency, limited collaboration, no consensus forecasting

7. • Eliminate decision making latency by focusing
on excellence in demand visibility
• Sense demand more frequently and closer to the point of consumption
• Replace spreadsheets with one number demand management -
Collaborate with all constituents
• Improve your forecast accuracy
• Use advanced analytics and statistics
• Shape demand
• Promotion excellence and decomposition
• Leverage granular demand signals (customer, channel, store, shelf)
• Identify and simulate cross selling opportunities
• Evolve to real-time S&OP
• Profitable demand response
• Identify supply side opportunities
• Define and monitor customer based metrics
• Get real time visibility to sales tactics (price breaks, promotions, deals)
Better Approach
Real-time demand sensing and collaborative consensus forecasting

8. Top 10 Success Factors for S&OP
1. Use graphical presentation
2. Make it easy to grasp what has changed and any
issues
3. Ensure an “integrated” tool is used -- same tool for
each step in the process
3 Critical Success Factors -- Tools
Adapted from Top 10 Success Factors for Sales and Operations Planning by Oliver Wight

9. Sense Demand Real-Time
• Sense demand real-time, at more granular level,
and closer to the point of consumption
• Report and measure demand in the ways important to your business -
role-based Collaboration Workbench for coordinated demand response
• Support different demand data for each customer and channel
• Easily add additional sources of information, such as external syndicated
and POS data, using data integration profiles
• Use multiple units of measure and multiple currencies
• Collect information from multiple source ERP instances
• Out-of-the-box integration for Oracle EBS, JDE E1
• Leverage built-in intelligence to automatically
select which level’s data to use for forecasting
• Roll up data across unlimited hierarchies
• Forecast at any level of time, product, and location aggregation
• Completely meta data driven – change on the fly
• Weekly and daily forecasting support
• Simulate and compare different demand scenarios
• Automate collaboration through workflow
• Ensure all constituents submit numbers on time
• Configurable push exception management automates review process
Involve all constituents and forecast closer to the point of consumption

10. Improve Forecast Accuracy
• Bayesian mix modeling
• 15 model library
• Auto-regressive moving average (ARMA)
• Regression integrated winters
• Logistic and logarithmic models
• Ridge regression, Markov chain regression
• Intermittent regression
• Unlimited causal factors
• Seasonality, weather, market indicators
• Base + price + multi-event lift decomposition
Historical data
Bayesian
Estimator
Forecast
Estimator’s models
Multiple causal
factors
Bayesian
combined model
Superior Bayesian-Markov Analytics
• Promotion effects
• Cross-product and cross-location effects
• Pre and post event
• Automatic outlier detection
• Trend long, short, dampening
• Missing data interpolation
• Shape modeling and auto-correction
• Regime change
• Fit and forecast validation
Designed for planners, not programmers (“PhD in a box”)

11. Shape Demand for Profitability
• What incremental volume will result from a
marketing program?
• How will it impact the sales of other products?
• How does a marketing program at a brand or
product family level impact a specific item?
• What were the indirect effects such as
cannibalization and consumer stockpiling?
• What is the ROI on my marketing and trade
spending?
• What is the predicted impact of future activity?
• How does a promotion impact shipments and DC
replenishments?
6 Period 11
Cannibalization
Pre- and post-effects
Competitive switching
Category growth
Baseline
Actual
0
500
1000
1500
2000
2500
3000
3500
4000
Period 1 Period 6 Period 11
Cases
Cannibalization
Pre- and post-effects
Competitive switching
Category growth
Baseline
Actual
Past Future
Leverage Advanced Forecasting and Modeling to understand the real impact
of promotions and sales incentives

12. Company
• Leading producer of juices and jams
• > Mio $750 Mio. revenues world-wide
• Thousands of different promotions per year
Planning problem solved
• Promotion planning synchronized with demand planning
Unique aspects of implementation
• „One-Number“ Forecast as base for improved forecasting
• Promotion planning integrated with demand planning
• > 100 sales reps plan promotions
• Post event analysis of promotions
• Increased forecast accuracy at SKU level
• Enables trade promotion planning to be integrated with RT S&OP
• Reduced supply chain costs
• Improved HQ and sales planning productivity
Live on Demand Management, Trade Management
Welch’s

13. Top 10 Success Factors for S&OP
1. Roles and responsibilities are defined and
communicated
2. Manage by exception – and focus on the key issues
• Gap closure (volume, revenue, and profit expectations)
• Resource issues
• Alignment of demand, supply, and new product plans
• Performance issues
3. Implement quickly and improve each month
3 Critical Success Factors -- Process
Adapted from Top 10 Success Factors for Sales and Operations Planning by Oliver Wight

14. Top 10 Success Factors for S&OP
1. Senior executives do not delegate their participation
in the S&OP process
2. Senior executives utilize S&OP as their process for
managing the business
3. Senior executives insist on the truth
3 Critical Success Factors -- Leadership
Adapted from Top 10 Success Factors for Sales and Operations Planning by Oliver Wight

15. Consensus Planning
• Create consensus plan
through continuous
collaboration across sales,
marketing, finance and
customers
• Each participant gets tailored
view
• Configurable worksheets
• Combine top down business
planning with precise bottom
up forecasts to project
payments
• Automate process with
workflow
• Send reminders
• Task notifications in dashboard
Inclusive consensus process improves plan quality and
acceptance
Sales
Mgrs
Sales
Forecast
Sales: Plan by Product Line
Plant
Mgrs
Operations
Forecast
Manufacturing: Plan by Plant
Sales Reps
Marketing
Forecast
Marketing: Plan by Region
Asia Americas
Finance
Forecast
Finance: Budget in Dollars

16. Inputs display from
entire collaboration
group – Finance,
Marketing, Operations,
Key Customers and
Suppliers
Integrated approval
workflow process
Each S&OP
participant has a
configurable role-
based view
Review historical
accuracy for each
input
Evolve to Real-Time S&OP

17. Interactive Management Review
• What has changed since last month?
• Are we on plan financially?
• How are we performing to performance
metrics?
• What new risks do we need to consider?
• What decisions need to be made now?
• What decisions need to be made in the near
future?
• How are product families performing?
• Are we on track with product development?
• Do we have any critical constraints?
• Is there any need to revise long term plans?
Adapted from “Enterprise Sales and Operations Planning”
by Palmatier & Crum
Typical S&OP Management Review agenda
Sales and Operations Planning Process
Product Review
Demand Review
Supply Review
Execute and
Measure
Management
Review
Sense
Respond
Shape

18. Company
• $1 billion in revenues, operating worldwide
• Leading provider of cordless phones and electronic children’s toys
• 85% of US revenues through Wal-Mart, Target, Best Buy, and Circuit City
Planning problem solved
• Real-time S&OP process driven by one demand number
• Seasonal demand plans
Unique aspects of implementation
• Generates forecasts from customer POS data
• Web-collaboration with customers
• Automatic forecast evaluation and exception management
• Implementation within 90 days
• Increased order fill rate from 55% to 95%
• Increased inventory turns by 100%
• Reduced price protection claims by 40%
• Reduced logistics costs by 65%
Live on Demand Management, Real-Time S&OP
VTech

19. Top 10 Success Factors for S&OP
Adapted from Top 10 Success Factors for Sales and Operations Planning by Oliver Wight
People Tools
Process

20. Execute
Demand Planning Supply Planning S&OP Meeting
Market Demand
Forecasting
New Product
Forecasting
Promotion Planning
Consensus
Forecast
Safety Stock Demand
Inventory
Optimization
•Constraint-Based
Production
Scheduling
•Strategic Network
Optimization
Evaluate Supply
Constraints
Measure Financial and Customer Service Level Results
S&OP Outputs:
Service levels
Profitability
Inventory Levels
Promotions
DRP
MPS
S&OP Review
Oracle Closed Loop S&OP Planning
Demand
Data
EDI 867
IMS data
Excel
Pedigree
xml

21. Oracle Demantra Overview
Complete, best-in-class and integrated planning process platform
Future *
Integrated
Planning
Functions
Products
Platform
E1 EBS …
Legacy
ERP
* *
WFL Common planning
data model
Connectors
Network
Design Demand Sensing
And Shaping
Postponement
Optimization Holistic
Supply
Planning
Promise,
Distribute, and
Replenish
Execute to plan
Embedded
Analytics
Role-based Portals
Preconfigured
Worksheets and
Workbenches
Operational
Excellence
Real-Time
S&OP
Demand driven
adaptive planning
Multi-Enterprise
Collaboration
Trading Partners
Best in class
Business
Processes
Supply Chain
Risk Management
Strategic
Network
Optimization
Inventory
Optimization
Real-Time
Sales &
Operations
Planning
Demand
Management
& Advanced
Forecasting
Predictive
Trade
Planning &
Optimization
Advanced
Supply
Chain
Planning
Production
Scheduling
Global
Order
Promising
Collaborative
Planning
Demantra

22. State-of-the-art and Scalable Architecture
• Scalable
• Handle millions of combination
• Web-based user interface
personalization
• Dynamically configure
• Drag-and-drop
• Tailor workflow processes to unique
company requirements
• Demand Management adapts to your business
process
• Create alerts and exception rules
• Customize reports on-the-fly
• Dynamic open link to MS Excel
• Work in disconnected mode
Enterprise Technology Stack
• SOAP / XML / HTML / HTTP(S)
• J2EE Server
• RDBMS
Enterprise Technology Stack
• SOAP / XML / HTML / HTTP(S)
• J2EE Server
• RDBMS
Demantra Infrastructure
• User / Role Security Services
• Administration & Configuration
• Business Object Services
Demantra Infrastructure
• User / Role Security Services
• Administration & Configuration
• Business Object Services
Data Integration Services
Unified Demand Data Repository
Business Application
Language
OLAP
Optimiz-
ation
Business
Logic
GUI
Workflow &
Exceptions
Predictive
Modeling
Data Integration Services
Unified Demand Data Repository
Business Application
Language
OLAP
Optimiz-
ation
Business
Logic
GUI
Workflow &
Exceptions
Predictive
Modeling
Wendy's has ~1M combinations, 730 history daily buckets,
48 half-hour buckets per day for 90 historical days and 90 future days
- over 9B data points

23. Proven Success – Many Live Customers

24. Oracle Demantra Demand Management
Eliminate
spreadsheets
Manage rolling forecasts
Collaborate with all constituents
on one number
Use basic statistics, alerts, and
seeded worksheets
Tailor worksheets for individual
users
Leverage POS and channel data
Forecast new product
introductions
Collaborate with customers
Use advanced statistics and
causal factors
Complex alerts and custom
worksheets
Forecast based on attributes and
product characteristics
Compute promotional lifts and
analyze impact of demand drivers
Assumption based forecasting
From less complex to best in class
Manage rolling forecasts
Collaborate with all constituents
on one number
Use basic statistics, alerts, and
seeded worksheets
Tailor worksheets for individual
users
Leverage POS and channel data
Forecast new product
introductions
Collaborate with customers
Use advanced statistics and
causal factors
Complex alerts and custom
worksheets
Manage rolling forecasts
Collaborate with all constituents
on one number
Use basic statistics, alerts, and
seeded worksheets
Tailor worksheets for individual
users
Start
anywhere
Evolve at your own pace to a best-in-class solution

25. <Insert Picture Here>
Summary

26. Oracle Demantra Demand Management
• Sense demand real-time
• Sense demand more frequently, closer to the point of consumption
• Capture demand and forecast at more granular level (store, shelf,
attributes, product characteristics)
• Achieve consensus demand number more quickly by involving all
constituents at the same time, including customers
• Quickly identify and react to demand changes and exceptions
• Improve forecast accuracy
• Leverage advanced statistics for more accurate demand number
• Use any combination of quantitative or qualitative data to establish your
base line forecast
• High precision statistical forecasting, no statistical background required –
Superior Bayesian-Markov forecast analytics
• Forecast based on attributes and characteristics
• Leverage Advanced Forecast Modeling for promotion lift decomposition
and causal analysis
• Shape demand for profitability
• Plan new product introductions
• Plan promotions and sales incentives
• Identify cross selling opportunities
• Evolve to real-time S&OP
• Profitably balance supply, demand, and budgets
Shipments
Marketing
forecast
Order
history
CHANNEL DATA
Customer
sales
Collaboration
Workbench
Demand Hub and Seeded Worksheets
Real-time demand sensing and collaborative consensus forecasting