7 Principles of Highly Effective Sales & Operations Planning

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Steelwedge Agility Webinar Series

Presenter: Peter Bolstorff, author of Supply Chain Excellence

Successful supply chain planning is not just a function of ‘doing more’ leading practices. The best supply chain planning organizations have picked appropriate leading practices as dictated by the markets they serve and integrated them together with their chosen technology platform to achieve competitive advantage.

Sales and operations planning (S&OP) is a foundational leading practice that cuts across all industries, according to Peter Bolstorff, an internationally recognized supply chain practitioner, speaker, educator, consultant and author. Actionable research from Mr. Bolstorff’s project experience suggests that in addition to S&OP, the best supply chain planning organizations have adopted seven principles:

1. Systematic management of ‘master data’
2. Synchronized S&OP, tactical planning, and execution processes and horizons
3. Mature collaborative processes for both key customers and suppliers reconciling forecast, orders, and yearly volume
4. Data oriented understanding of the inputs to the forecast
5. Intense focus on ‘point-of-sale’ or ‘sell through’ data (versus sales orders and ‘sell in’)
6. Disciplined product life cycle management process
7. A continuous improvement approach to understanding consumer or user behavior

Join Peter and Steelwedge for an interactive webinar featuring examples of these principles from some of the best demand-driven organizations.

Published in: Technology

7 Principles of Highly Effective Sales & Operations Planning

  1. 1. Single Line of Sight: Plan, Perform, Profit 7 Principles Of Highly Effective Sales & Operations Planning August, 21 2012 © 2012 Steelwedge Software, Inc. Confidential. 1
  2. 2. Agenda• Global Business Requires Agility• S&OP: Where to Start• Powering Agility: Examples © 2012 Steelwedge Software, Inc. Confidential. 2
  3. 3. Interdependent: Business Reality Agility Required © 2012 Steelwedge Software, Inc. Confidential. 3
  4. 4. The Agility Gap How good are you at responding to rapid change? 90%Agility iscrucial tobusiness 27% Are good at agility *May 15 S&OP Agility Research, Supply Chain Insights © 2012 Steelwedge Software, Inc. Confidential. 4
  5. 5. Benefits of S&OP © 2012 Steelwedge Software, Inc. Confidential. 5
  6. 6. Agenda• Global Business Requires Agility• S&OP: Where to Start• Powering Agility: Examples © 2012 Steelwedge Software, Inc. Confidential. 6
  7. 7. Continuous Improvement Approach © 2012 Steelwedge Software, Inc. Confidential. 7
  8. 8. Continuous Improvement Example Process Design & Change ManagementCompass Express Process Pilot 1. S&OP Sales (Demand and Process Adoption Refinement Revenue) 2. S&OP Advanced Fin/Inventory 3. Executive S&OP/Full IBP © 2012 Steelwedge Software, Inc. Confidential. 8
  9. 9. 1. Connect the Right People and Right Process Steelwedge S&OP Consensus Demand Plan Demand (Unconstrained) Forecasts Supply Plan Supply (Constrained) Plans Analytics Open Apps Solver Finance Plans Finance Plans Supply & Pre-meeting Demand Balancing Nightly Executive Executive S&OP Transaction S&OP Files Inputs Planning Processes Steelwedge Sales, Backlog, O Inputs and Balancing & Scenario pportunities, Inv., Business Unit Business Unit Scenario Review & Issue Outputs POs, Budget Supply Plans Finance Plans & Master Data Planning Resolution © 2012 Steelwedge Software, Inc. Confidential. 9
  10. 10. Consensus Demand Planning Steelwedge S&OPStatistical BaselineForecast ForecastMarketing Marketing Forecast Analytics Open Apps SolverAccount AccountManagement ForecastSales SalesManagement Manager ForecastDemand DemandPlanning Forecast NightlyConsensus Transaction ConsensusTeam Files Forecast Inputs Planning ProcessesSteelwedge Forecast, Sales, Orders,Inputs and Demand Opportunities, NPI & EOL, Account Level Sales Region ConsensusOutputs Budget & Review and Product Forecast Forecast Forecast Master Data Geo Forecast Volume © 2012 Steelwedge Software, Inc. Confidential. 10
  11. 11. Constrained Supply Planning Steelwedge S&OP ConsensusUnconstrained DemandForecast ForecastSourcing Source Plan Analytics Open Apps SolverInventory Inventory PlanProcurement Procurement Supplier Plan Plan Rough CutProduction Capacity Plan Nightly Transaction Files Inputs Planning ProcessesSteelwedgeInputs and Inventory, Inventory Rough Cut Source Procurement Purchase Orders Targets & CapacityOutputs & Master Data Allocations Forecast Projections Planning © 2012 Steelwedge Software, Inc. Confidential. 11
  12. 12. 2. Map Software to Your Planning Process.. © 2012 Steelwedge Software, Inc. Confidential. 12
  13. 13. 3. …Make it as Unique as Your Business with Apps Open Architecture Apps Demand Policy Inventory Segmentation Stocking Strategy © 2012 Steelwedge Software, Inc. Confidential. 13
  14. 14. 4. Leverage and Connect Your ERP Investment Demand Supply ExecutiveS&OP Process Consensus Constrained Supply Executive Review Demand Integrated Business Planning Demand, Supply & Financial S&OP Technology Demand, Supply & Finance DataERP Backbone Forecasting, Demand SCM, ERP Business Intelligence, Plan, ERP, CRM Data Warehouse Technology Demand Products Supply Products & Revenue, Units Data & Customers Suppliers Accelerated Time To Value © 2012 Steelwedge Software, Inc. Confidential. 14
  15. 15. 5. Ensure Quick Time to Value through the Cloud  Reduce support costs  Increase user adoption  Deploy 45% faster  Increase flexibility © 2012 Steelwedge Software, Inc. Confidential. 15
  16. 16. Agenda• Global Business Requires Agility• S&OP: Where to Start• Powering Agility: Examples © 2012 Steelwedge Software, Inc. Confidential. 16
  17. 17. Industrial Products: Going Lean to LeadVolatility Challenge• 100 year old, complex company vs. nimbler, smaller competitors• More Global, Less predictable demand• Transitioning to lean manufacturing © 2012 Steelwedge Software, Inc. Confidential. 17
  18. 18. Industrial Products:Product Level Approach Statistical Collab & Forecast Exception Impact Stocking Strategy: Min/Max, Safety Stock, etc Complexity © 2012 Steelwedge Software, Inc. Confidential. 18
  19. 19. Industrial Products:Going Lean to Lead Blueprinted IBP process design: week 1 Full plan from demand, supply to exec. IBP: week 10. Sequenced by product line; done internally “What if” tool key to regular management strategy $30M savings in working capital; improved customer levels 10%; grew market share © 2012 Steelwedge Software, Inc. Confidential. 19
  20. 20. Consumer Electronics: Taming ComplexityVolatility Issue:• Commoditizing market• Competitive leverage: bundling strategy-- but complex to manage• Equally complex ERP infrastructure• © 2012 Steelwedge Software, Inc. Confidential. 20
  21. 21. Synching a Single Plan • Single plan for globe • Managed complex configurations with statistical bill of materials (sBOM) • Synched 75 demand planners, 150 sales managers, 50 supply planners © 2012 Steelwedge Software, Inc. Confidential. 21
  22. 22. Consumer Electronics:Taming Complexity Test drive with company data proved case for solution United data for better collaboration and consensus: internally and with suppliers Executive review monthly vs. bi-annually 3X faster response, 10% better fulfillment, 35% less inventory excess, 5% margin improvement © 2012 Steelwedge Software, Inc. Confidential. 22
  23. 23. Steelwedge Test DriveWhy Test Drive Live System = Real User Input = Real Proof Point Validate Requirements Assumptions (Customer & SW) Validate Data Health and Availability (Customer & SW)What is a Test Drive Compass Express “Best Practices” platform hosted by SW One time data load 8 hours of Hands-on TrainingOptional: Integrated Planning Assessment / Design workshop © 2012 Steelwedge Software, Inc. Confidential. 23
  24. 24. Thank you!© 2012 Steelwedge Software, Inc. Confidential. 24

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