In this presentation Torben S Hansen talks about his experiences working with Nike and their S&OP processes. He describes how their S&OP uses combined, with using Big Data wisely have helped them become the global brand they are today. Hansen goes into the pros, cons, structure, teamwork needs and steps for success.

1. Manage constant
business
evolution
NIKE S&OP PROCESS

2. Torben S Hansen
S&OP director Apparel and
Action Sports
About myself:
•! 15 years at Nike
•! Apparel
•! Equipment
•! S&OP
•! Inventory Planning
•! Demand Planning
•! Sourcing
Prior to Nike:
•! Logistics & Sales
•! Pharmaceuticals & Seafood
business
•! Worked/lived in Denmark,
England, Greenland &
Netherlands

3. 24 BILLION GLOBALLY
22 OCTOBER 2012 | PAGE 3

4. 6 BILLION - 235M EUROPE
22 OCTOBER 2012 | PAGE 4
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5. 165K
22 OCTOBER 2012 | PAGE 5

6. 1DC * (* 2 SATELITE DC’S RUSSIA & TURKEY)
22 OCTOBER 2012 | PAGE 6

7. FUNCTIONAL EXPERTISE
22 OCTOBER 2012 | PAGE 7
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8. DATA & INFO

9. SO WHAT’S THE CHALLENGE ??
22 OCTOBER 2012 | PAGE 9

10. ORG CHANGE => MULTIPLE VIEWS
22 OCTOBER 2012 | PAGE 10

11. CATEGORY
22 OCTOBER 2012 | PAGE 11

12. LINE CONSTRUCT
22 OCTOBER 2012 | PAGE 12

13. PRODUCT ENGINE
22 OCTOBER 2012 | PAGE 13

14. DISCONNECT ?
22 OCTOBER 2012 | PAGE 14
Category
Product engineFinance

15. CHALLENGES
22 OCTOBER 2012 | PAGE 15
1.! Translate multiple views into one consolidated forecast
2.! Different understanding of “burning” supply chain issues
3.! Multiple point of views - which one to execute
4.! Short term fire fighting – distracts long term focus
5.! Mismatch in Demand & Supply – under/over utilisation of resources
6.! Data sources & definitions not (always) aligned x-functions

16. GREAT TEAM - FOCUS
22 OCTOBER 2012 | PAGE 16

17. RE-EDUCATE
22 OCTOBER 2012 | PAGE 17
1. DEFINITION:
S&OP a continuous process for making Demand & Supply decisions across
functions focused on reliable achievement of margin & growth plans &
link day-to-day operational realities with business goals and functional plans.
3. SUCCESS:
S&OP is successful when multiple levels of alignment are achieved, and functions
use one aligned S&OP number as the operating plan to avoid surprises and to
optimize results.
2. PURPOSE:
S&OP enables decision-makers to reach consensus on a single x-functional
operating plan including the allocation of critical resources to reach corporate
performance targets.

18. STRUCTURE
22 OCTOBER 2012 | PAGE 18
1.! Visibility & Awareness (performance processes)
2.! Co-ordination & Collaboration (cross-functional & cross CAT. / PE)
3.! Decisions, Actions & Results (demand & supply results, EBIT)

19. RELAY
22 OCTOBER 2012 | PAGE 19

20. STEPS
Step 1:
Planning
(Long range)
2-3 years out
Step 2:
Merchandizing
9–12 months out
Step 3:
Selling
6 months out
what do we bring
to market
what’s our growth plans
Financial plans
Long range source plan
Step 5:
Supplying
Step 4:
Buying
6 months out
when and how much
do we buy
what will we
sell
Primary focus:
Product engine
Execution
22 OCTOBER 2012 | PAGE 20
will products be
on time)
Step 6:
Retailing
Sell through
Primary focus:
Category Planning
Step 7:
Cleaning
“keep market clean”
Seasonal “learning’s”

21. STEPS
Step 1:
Planning
(Long range)
2-3 years out
Step 2:
Merchandizing
9–12 months out
Step 3:
Selling
6 months out
what do we bring
to market
what’s out growth plans
Financial plans
Long range source plan
Step 5:
Supplying
Step 4:
Buying
6 months out
when and how much
do we buy
what will we
sell
Primary focus:
Product engine
Execution
22 OCTOBER 2012 | PAGE 21
will products be
on time)
Step 6:
Retailing
Sell through
Primary focus:
Category Planning
Step 7:
Cleaning
“keep market clean”
Seasonal “learning’s”

22. STEPS
Step 1:
Planning
(Long range)
2-3 years out
Step 2:
Merchandizing
9–12 months out
Step 3:
Selling
6 months out
what do we bring
to market
what’s our growth plans
Financial plans
Long range source plan
Step 5:
Supplying
Step 4:
Buying
6 months out
when and how much
do we buy
what will we
sell
Primary focus:
Product engine
Execution
22 OCTOBER 2012 | PAGE 22
will products be
on time)
Step 6:
Retailing
Sell through
Primary focus:
Category Planning
Step 7:
Cleaning
“keep market clean”
Seasonal “learning’s”

23. S&OP TOPICS
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25. CLEAR R&R
22 OCTOBER 2012 | PAGE 25

26. 22 OCTOBER 2012 | PAGE 26
PRODUCT MANAGEMENT
- Align on SKU number requirement
- Agree product spread offering through Season
- Actions to maximize on time commercialization
FORECAST, SELL & BUY
- S&OP number aligned on supply and demand
- Align on Buy Risk for Season
- Mid Range capacity planning based on projections
- Review Negative Sales Actuals and Forecast
SOURCE & MAKE
- Air freight strategy
- Factory capacity issues and/or delays
DELIVERY AND ORDER MANAGEMENT
- Holds and contract management
- Inventory Re-alloaction
- Inbound/Outbound flow planning
RETAIL AND CONSUMER
- Review G2N performance and create action plan
- Inventory account cover: issues &opportunities
SEASONAL CLEAN UP
- Last season and prior inventory review and liquidation strategy
- Dynamic life cycle
Product Mgt
LEG 1
Forecast, Sell &
Buy
LEG 2
Source and
Make
LEG 3
Delivery and
OM
LEG 4
Retail and
Consumer
LEG 5
Seasonal Clean
up
LEG 6
KPI
Systematic review process by category through a logical grouping
of seasonal activities and KPI’s
One source, one definition and clear KPI’s
for all related functions
METRICS
FY Forecast
Sales Demand Forecast Accuracy
Demand Planning Forecast Accuracy
Buy Risk
Cancellations Tracking
Returns Forecast
GFP Capacity Simulations +2 Quarters
Order Entry Adherence
Order Spread
SOURCE
FFP
PE
PE
PE
FFP
FFP
OM
Sales
Sales
Specific KPI’s and targets per Leg

27. 22 OCTOBER 2012 | PAGE 27
S&OP OPERATING MODEL

28. BALANCE
ServiceCost
22 OCTOBER 2012 | PAGE 28

29. THERE IS NO FINISH LINE
22 OCTOBER 2012 | PAGE 29

30. KEY LEARNING’S
•! Open to constant business evolution
•! Roles & Responsibility evolve over time
•! Create (shared) understanding “who does what”
•! Clear timelines for critical business decisions
•! Constant education of S&OP participants
•! We are never “done” with S&OP process
•! Positive & receptive to change
•! Don’t forget to have fun along the journey
22 OCTOBER 2012 | PAGE 30

31. ULTIMATE S&OP GOAL
31
Product
Creation
SELL and
BUY
PRODUCT
AVAILABILE
DELIVER
CONSUMER
APETITE
MANAGE
INVENTORY
NIKE SUPPLY CHAIN

32. KEEP IMPROVING
22 OCTOBER 2012 | PAGE 32