Post on 01-Dec-2014
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1 © 2014 Steelwedge Software, Inc. Confidential.
Single Line of Sight: Plan, Perform, Profit
A Practitioner’s Guide to Successful S&OP and Demand Management
Seema Phull, NorthFind Partners
Karon Evanoff
2 © 2014 Steelwedge Software, Inc. Confidential.
• Global partnership of practitioners
• Passion for turning insights into action.
• Enabling value-chain transparency,
synchronicity and goal alignment.
Today’s Presenter
Seema Phull, Partner
3 © 2014 Steelwedge Software, Inc. Confidential.
Today’s Presenter
• With over 20 years in Supply Chain, she has
extensive knowledge and experience
working within the S&OP process.
• Early in her career, she cut her teeth as a
buyer. As she rose through the ranks on a
fast track she always found herself at the
forefront of change.
• She has been responsible for building a
Supply Chain teams and processes from
ground zero in startup VC funded
environments as well as revamping existing
teams and processes within the supply
chain discipline.
Karon Evanoff
4 © 2014 Steelwedge Software, Inc. Confidential.
Why Do Most S&OP Initiatives Fail?
How to get started with S&OP and how to sustain success?
What’s the power of proven S&OP processes and technology?
What works and What doesn’t
Questions for Practitioners
5 © 2014 Steelwedge Software, Inc. Confidential.
Why do most S&OP initiatives fail?
6 © 2014 Steelwedge Software, Inc. Confidential.
• Project vs. Journey
• Functional vs. Enterprise
• Sound bites vs. Data and actions
Why do most S&OP initiatives fail?
7 © 2014 Steelwedge Software, Inc. Confidential.
Journey
“… a traveling from one place to another, usually taking a rather long time;
passage or progress from one stage to another” 2
Quantified Mission
Project
“… a temporary endeavor with a defined beginning and end… typically constrained by
dates or funding” 1
1. Chatfield, Carl. "A short course in project management".
2. Dictionary.com Unabridged, Based on the Random House Dictionary, © Random House, Inc. 2009.
Effective approach to S&OP… • A comprehensive, multi-year endeavor
• A permanent change to how we do business planning
• An enabler to long-range strategic planning initiatives
Manage S&OP as a Journey
8 © 2014 Steelwedge Software, Inc. Confidential.
• Define the goals – year-by-year, quarter-by-quarter
• Understand the risk areas – people, processes, data
• Links to other initiatives – is S&OP a driver or enabler?
• Track progress diligently – make sure we cover the hard and soft sides
Constructing the Roadmap…
Long
Range Multi-Year
Medium
Range This Year!
Monthly &
Quarterly Tracking to Goals
Clearly Chart the Journey
Connect the process to the desk level in order to get the results
9 © 2014 Steelwedge Software, Inc. Confidential.
Ideal State
Succeeding
Improving
Beginning
• Demonstrate Success every 30 days
• Make it a Standard
• Establish Point of Diminishing Returns
• Non-statistical forecast
• Low S&OP knowledge
• Disconnected plans
• Formal process in place
• Demand-supply alignment
• Organization roles clear
• Customer & market data
• Finance involvement
• Standard work, clear R&R’s
• Product lifecycle planning
• Constraint Planning
• Optimization Scenarios
• Disparate data sources
• Non-standard reporting
• Fewer data sources
• Stabilized month-to-month
• Standard reporting
• Alignment alerts, control limits
• Forecasting software
• Receipts-to-cash data linkage
• One S&OP Reporting Tool
• Scenario comparisons
• ‘Real-Time’ reporting
Ideal State Succeeding Improving Beginning
Process Maturity
Sys & Data Maturity
Strong relationship between Process and Data maturity
2013
Call To Action:
Do S&OP!
2014
Expand &
Standardize
Q4 2014 2014
Set Policy &
Deliver Tools
A Framework for Success
Q1 2015
Enables Executive Mgmt Sponsorship
10 © 2014 Steelwedge Software, Inc. Confidential.
• 3 easy steps
Turn Data into Action
Put all your SKUs on the table
Isolate SKUs that
matter
Create plan for
every SKU
11 © 2014 Steelwedge Software, Inc. Confidential.
• Key Components
• People, Process, and Technology
• Vision: connect manufacturing floor to CEO
• Tactical results every 30 days!
• Transparency
• The right context from your data
• A Common vocabulary
• Deal with the demons
• Air them quickly
• Implement reactive and proactive solutions
Transparency…Translation…Trust…Transformation
Data Brings Transformative Change
12 © 2014 Steelwedge Software, Inc. Confidential.
How to get started with S&OP and how to sustain
success?
13 © 2014 Steelwedge Software, Inc. Confidential.
• Large manufacturing companies with revenues between $500M
up to $10B, Simple to complex supply chain
• Global Manufacturing, Distribution, Supply Networks covering the
globe
• Consumer, Services, Industrial, and Commercial products
• Problem: S&OP “Food Fight”
• Missing delivery + growing inventory
• 2 to 3 turns against industry average of >5 and 7
• Manufacturing costs exceeding budgets
• Sporadic S&OP
Case Studies
14 © 2014 Steelwedge Software, Inc. Confidential.
• Step 1: Data Driven Diagnostic
• Demand, Supply, Operations, and Mgmt. team
• Process, Technology, and Organizational talent
• Findings:
• Bad demand forecast driving unchecked manufacturing
• Safety stock built without understanding uncertainty risk
• No formal metrics.
• Blind adherence to a ‘system’ no one owned
• Lack of formal training on planning
• Procurement completely out of the loop
Methodology for Resolution
15 © 2014 Steelwedge Software, Inc. Confidential.
• Step 2: Data Driven Action Plan
• Part Segmentation defines plan for every part
• Isolate root cause…
– 5K of 25K parts drove company’s profitability
– 1/3 of active parts had no activity in 12 months
– Customer signal 30% more inaccurate than statistical forecast
– Top 25% suppliers impacted majority of revenue
– Safety stock not needed on 20% of the part numbers
– Some parts have excess of 6 mos of supply on hand
Methodology for Resolution
16 © 2014 Steelwedge Software, Inc. Confidential.
• Step 3: Get Off the Bench
• Started with one product family
• 3 month pilot: connected whole organization
• Exposed root causes and implemented corrective actions
• Focused the organization on data driven metrics
• Put in place 30 day ‘true S&OP process’
• MADE DECISIONS; Delivered RESULTS
Methodology for Resolution
17 © 2014 Steelwedge Software, Inc. Confidential.
Ready to launch to entire business!!!
• 20% less safety stock
• $13 million less inventory
• Monthly executive S&OP meeting
driving decisions
• Right forecasting methodology
• Right purchasing plan
• Right constraints evaluation
• Right supply plan constraints
• Working capital driven
customer-driven products
3 to 5 cycles later…
All was not perfect but it was proactive!
18 © 2014 Steelwedge Software, Inc. Confidential.
• Conduct a diagnostic that is built real business practices
• Focus on Change Management aspects
• Develop a Plan for Every Part
• Model impact on key metrics such as customer service and inventory
• Create one ‘well of truth’
• Centralized analytics with context and consensus
• Establish a culture of accountability
• By enabling effective metrics and performance mgmt.
Summary of what enables success
19 © 2014 Steelwedge Software, Inc. Confidential.
What’s the power of proven S&OP processes and
technology?
20 © 2014 Steelwedge Software, Inc. Confidential.
• Technology helps to mature and sustain a good S&OP process
• Technology replaces spreadsheet ‘islands’ with integrated
planning platform
• Demand, supply, inventory plan transparency enables better financial
alignment
• Connect to all execution processes including customers and
suppliers so that organization is able see leading indicators that
could negatively impact performance
• Enables internal collaboration and escalation of issues in real time
Power of proven S&OP processes and technology
21 © 2014 Steelwedge Software, Inc. Confidential.
What works and What doesn’t
22 © 2014 Steelwedge Software, Inc. Confidential.
Keys to S&OP Planning Success
Effective Metrics and Performance Management
Executive Involvement and Leadership
Dedicated S&OP Manager
Monthly Process Cadence
Both Tactical and Strategic
Collaboration
Common Language and Data
Financial Integration
Fast and Accurate Demand Plan
23 © 2014 Steelwedge Software, Inc. Confidential.
• 60% effort should be in changing the culture
• What changes the culture?
• Making the change personal… make the mission THEIR mission not yours
• Establish beach heads and connect shop floor to CEO
• Use technology for insights and robust diagnostics
• Expose ‘ugly babies’ to leadership
• Conduct Root Cause Corrective Action immediately
• Create 2 parallel paths:
• Execution action to drive benefits
• Process development and maturation journey
• Deliver RESULTS every 30 to 60 days
What works and What doesn’t
Get the change in the DNA of the organization
24 © 2014 Steelwedge Software, Inc. Confidential.
• Beware of executive ‘lip service’
• Endless process mapping
• Lack of thought leadership on process or change mgmt.
• Lack of technology and process integration
• Careful with technology
• Transactional systems vs. Best of Breed?
• Does it enable true collaboration
• Does it enable proactive perspective
What doesn’t work
25 © 2014 Steelwedge Software, Inc. Confidential.
“ Steelwedge has grown into
the market's leading S&OP
solution in the cloud. ”
Rating: Positive
Global market share leader
Offices: USA, Europe, Japan & India
Founded in 2000, 50%+ year over year growth
Global organization focused on global delivery
Cloud Based Integrated Business planning platform
100% cloud-based for rapid deployment & value realization
Steelwedge: The S&OP Company
26 © 2014 Steelwedge Software, Inc. Confidential.
• Steelwedge drives organization alignment
Visibility across systems landscape
Make better decisions, quickly
• Flexible, Scalable and Easy to Use
• Accelerated Time to Value
• Leverages Existing Systems Investment
Steelwedge S&OP Platform
27 © 2014 Steelwedge Software, Inc. Confidential.
Q&A Contact Us
Email: hsookias@steelwedge.com
Telephone: North America +1 (855) 980.8800
United Kingdom +44 (0)121.232.4668
Netherlands +31 (0)70.7999.288
Japan +813-6277-8521
28 © 2014 Steelwedge Software, Inc. Confidential.