The document discusses supply chain insights and the evolution of sales and operations planning (S&OP). It notes that S&OP has progressed from a manufacturing-driven focus on delivering a feasible plan, to a sales-driven focus on matching demand and supply, and increasingly to a demand-driven and market-driven focus on sensing demand signals and orchestrating supply across markets. Emerging technologies can help organizations achieve greater benefits by supporting demand translation, network modeling, constraints-based planning, and optimization of financial drivers.

1. Supply Chain Insights
Delivering Actionable Advice to the Supply Chain
Leadership Team
Supply Chain Insights, LLC © 2012

2. BRICKS Book
Publishes
Matter
in August
2012
The Role of Supply Chains
in Building Market-Driven
Differentiation
LORA M. CECERE
CHARLES W. CHASE JR.

3. What’s in
a name?
A rose by any other
name would smell as
sweet.
William Shapespeare
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4. What is in a name?
 Integrated business planning (IBP) refers to the technologies, applications and
processes of connecting the planning function across the enterprise to improve
organizational alignment and financial performance. IBP accurately represents a
holistic model of the company in order to link strategic planning, and operational
planning, with financial planning. By deploying a single model across the enterprise
and leveraging the organization’s information assets, corporate executives, business
unit heads and planning managers use IBP to evaluate plans and activities based on
the true economic impact of each consideration.
 Sales and operations planning (S&OP) is an integrated business management
process through which the executive/leadership team continually achieves focus,
alignment and synchronization among all functions of the organization. The S&OP plan
includes an updated sales plan, production plan, inventory plan, customer lead time
(backlog) plan, new product development plan, strategic initiative plan and resulting
financial plan. Plan frequency and planning horizon depend on the specifics of the
industry. Short product life cycles and high demand volatility require a tighter S&OP
planning as steadily consumed products. Done well, the S&OP process also enables
effective supply chain management.
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6. 6
Typical Organization
CEO
Chief
Customer COO
Officer
Chief
VP of Supply VP of
Marketing Sales CFO
Chain Manufacturing
Officer
Account Customer
Procurement Logistics CIO Quality
Teams Service
Growth Volume Cost
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7. The Questions to Ask
 What is the goal?
 How do we make decisions?
 What do we measure?
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8. Progression
Organizational Driver Goal Focus
Manufacturing visibility Feasible Plan Inside-out
Improve customer Match demand and Inside-out
service supply
Align plans Profitable plan Inside-out
Demand driven Sense and shape Outside-in
demand
Market driven Align and orchestrate Outside-in
demand market to
market
Supply Chain Insights, LLC © 2012

9. A Supply Chain is a Complex System with Complex
Processes with Increasing Complexity
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10. Looking at Supply Chain as a Complex System
Growth
Corporate Revenue Cost of Goods
Trade-offs
Working Capital
Corporate Social Responsibility
Investment
Trade-offs R&D Strategy and Investment Asset Strategy and Investment
Forecast Accuracy Customer Service Inventory
Supply
Chain Product and Service
Channel Strategy Supplier Strategy
Portfolio
Trade-offs
Sales Distribution Manufacturing Logistics Procuremen
Policies Policies Policies Policies t Policies
Supply
Chain Backorders First Pass Material
Returns Empty Miles
Waste Obsolescence Yield Yield

11. Apply the Technology
Network Design: What is the role of inventory in our network design?
Inventory Configuration: What is the right Form & Function of
Inventory?
Inventory Policy: What is the Right Level of inventory?
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12. What drives Variability?
Value: Price, trade incentives, new products,
services, freshness, responsiveness
Variety: Configurations, items, platforms,
components, brands, processing technologies
Velocity: Lead-times, order to delivery, inventory
turns, time to market
Volatility: Demand, inventory, schedules,
reliability, yields
Volume: Plants, warehouses, distribution
centers/points, product flow
Supply Chain Insights, LLC © 2012

13. Getting to Letter Perfect….
Common Practice Market-driven Focus
S Ask sales Focus on market drivers:
How do we best shape demand?
& Direct integration to supply Design of the value chain to
optimize trade-offs, minimize risk,
balance cycles, and orchestrate
demand
OP Manufacturing plan Trade-offs between make, source
and deliver
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14. The Need for Balance
S: Go-to-
OP: Demand
Market
Strategies & Orchestration
Goal
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15. The Need for Balance
Increasing need for value
network strategy alignment
Business Planning
Demand-Driven Forecasting
Constrained Forecast
Increasing levels of
granularity
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16. S&OP Evolution
Greater Benefit
Business- • Growth
Sales Driven • Resilience
planning Driven
Match Demand • Efficiency
Coordination
with Supply
of Plans
Manufacturing- Demand Market Driven
Driven Driven Orchestrate
Deliver a Feasible Sense and Demand
Plan for Operations Shape Demand Market to Market
Supply Chain Insights, LLC © 2012

17. Technology
Goal
A feasible plan • Model the network
• Recognize and respect
constraints
• Gain plan visibility
Match demand with supply • What-if analysis
• Multi-tier inventory analysis
• Network design
Deliver the most profitable • Demand translation
• Supply orchestration
Plan • Optimize financial drivers
Demand-driven • Sense channel demand
• Shape demand
• Drive the most profitable
response
Market-driven • Sense buy and sell-side market
conditions
• Bi-directionally orchestrate
demand
Key:
Demand Planning Supply Planning Inventory Planning Financial Planning Demand Translation Market Sensing
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Platform

18. Historically, we have:
• Tried to get precise on inaccurate data.
• Believed that the most efficient supply chain is the most
effective supply chain.
• Built efficient chains, but not effective networks.
• Focused inside-out, not outside-in.
• Rewarded the urgent, not the important.
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19. Ask the Right Questions
 What is the goal?
 How do we make decisions?
 What do we measure?
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20. Who is Lora?
•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.
Supply Chain Insights, LLC © 2012

21. Where do you find Lora?
Contact Information: loracecere@gmail.com
Blog: www.supplychainshaman.com (3500
pageviews/month)
Twitter: lcecere 2900 followers. Rated as the
top rated supply chain social network user.
Linkedin: linkedin.com/pub/lora-
cecere/0/196/573 (2300 in the network)
Supply Chain Insights, LLC © 2012