June 12th S&OP Webinar by Supply Chain Insights, LLC

TM
S&OP:
State of the Union
June 2013

Supply Chain Insights LLC Copyright © 2013, p. 2#sciwebinar
Presenters
Benji Green
Avaya
Lora Cecere
Supply Chain
Insights
Jack Lyon
Enterasys

Supply Chain Insights is focused on delivering
independent, actionable and objective
advice for supply chain leaders. A company
dedicated to research, turn to us when you
want the latest insights on supply chain
trends, technologies to know and metrics that
matter.
About Us

Sales & Operations Planning:
State of the Union
Jack Lyon
Vice President, Operations
Enterasys Networks
June 2013

• Network Powered by INNOVATION
• Delivering the Highest Quality User EXPERIENCE
• Guiding Principles PEOPLE  TECHNOLGY 
SERVICE
• Solutions WI-FI MOBILITY DATA CENTER
UNIFIED MANAGEMENT
5
Leader in Wired and Wireless Network Infrastructure
and Security Solutions

Getting To Mature S&OP
• Journey started in 2004
• Faced a number of challenges
• Collaborative approach
• Tools played a big part
• Short time to measured success
• Setting up for the long term
Enterasys in the Cloud: Quote to Demand
6

• Stay committed to the process
– Over communicate with
shareholders
• Set aggressive targets
– post mortems & lessons learned
• Continuous Improvement
– Drive initiatives to move the process
forward
7
Driving Towards Orchestrating

CUSTOMERS
THEREISNOTHINGMOREIMPORTANTTHANOUR
OUR BELIEF

• Avaya is the global business communications expert delivering open and
flexible communication systems, that transform the way people collaborate to
enhance performance and enable growth for companies small to large at
lowest possible total cost of ownership.
Who is Avaya?
Unified
Communications
Call
Center
Data
Networking
Services &
Maintenance
Small & Medium
Enterprise
Enterprise
Gov Solutions Midsize Enterprise

Future State
• BIC FA at 85+%
• Balanced Scorecard Fact-Based Decision
Making with Aligned Incentives
• Fully Integrated Supplier & Distributor Co-
Planning & Advanced Funnel Analytics
• Simplified and controlled Portfolio
• Kinaxis driven Scenario Modeling, Decision
Support, and Alert System
49FY13-15 Strategic Planning Avaya – Confidential & Proprietary -- For Internal Use Only
S&OP Maturity Model
Key Takeaways
• S&OP Maturity measured across people, processes, and tools
• Customer collaboration is significant opportunity to improve S&OP process & results
• Transition management (customerproduct)
Organization
Supplier
Collaboration
Customer
Collaboration
Demand
Determination
Tools &
Enablers
Outputs
Measurements
Level 1
Non-existent
Level 2
Developing
Level 3
Basic
Level 4
Advanced
Level 5
World-class
No forecast
accountability
Forecast availability
based on past supply
Multiple forecasts based
on historical data and
current inventorylevels
Based only on historical
sales and simple allocation
to functional areas
No data integrity,
simple tools;
no data mining
Forecasts not
disseminated
Forecast accuracy below
50% or not measured
Centrally managed forecasting
system with decentralized
adjustment process
Vendor managed inventory
(VMI), Profit Sharing
Customer collaboration
(CPFR)
Consensus demand plan based on
key account forecasts and multi-tier
forecasting
Future intelligence historically
based
Consensus forecasts used in
related planning
Defined composite matrix/
Score card that is aligned with
supply chain roles
Bestpractices
AVAYA
AVAYA
AVAYA
AVAYA
AVAYA
AVAYA
AVAYA
Theater
FA, Exp
SFDC
Utilizaton
Disty
Replen Demand
Shaping
Acct Trs
Mngmt
VMI&Prft
Share
Common
Incentive
Consens
Fcst
Kinaxis
RR
Risk
Mngmt
Bottom’s
Up Plan
Metric
Optimize
COE
Supplier
Co-Plan
Environment
• Limited funnel visibility @ code level
• Lack of Disty Collaborative Fcst
• Short customer lead-times; long supplier
lead-times
• Increased Asia sourcing & migration to
ocean in order to lower costs
• Excessive # of SKU’s
• Portfolio Redundancy
• High-mix/low-volume business
• Difficult transition management
Aggressive Portfolio Simplification
- Reduce Code Count by 50%,
- Eliminate Portfolio Redundancy
- Component Standardization
Accelerate Forward Visibility
- Increase SFDC Utilization
- Distributor Co-Planning
- Advanced Funnel Analytics
Integrated S&OP IT Platform
- Single Source of Data
- Multi-variable Statistical modeling
- Integrated Supply/Demand Scenario Analysis
Robust Transition Management
- Sales Supporting ‘Center of Excellence’
- Top 50 Customer Transition Roadmap
- Partner & Customer Demand Shaping
Begin with the End in Mind?
Dynamic Supply Flexibility
- CM Component Flexibility Model
- Vendor Managed Inventory & Logistics Hubbing
- Kinaxis EtoE component to Disty Inventory visibility




Developing S&OP Agility?
Understand
the Risk!
• Forecast are wrong, which way is the greatest volatility
• Operational risk vary dramatically by code
Operational Impact
• Expedited Freight
• Inventory Costs
• Carrying Costs
• PCR Roadmap
• RFMV Risk
• Mfg Transitions
• Supply Flexibility
• Customer Sat
•Sales Margin
Demand Volatility:
• Forecast Accuracy
• Demand Volatility
• Market Trend
• Large Bids
• Lifecycle
• Order Fill to Track
• Disty Sales Out
• Disty Days On Hand
How much and which direction
might my forecast be wrong?!
Which way and how much can I
afford to be wrong?!
Develop a
Playbook!
• What risk mitigation strategy’s can we deploy in advance
• What actions/levers can drive recovery if we’re wrong?

Study Overview

Study Results

Build with the End in Mind

Greatest Alignment Opportunity:
Sales & Operations

Gaps

Top S&OP Challenge

Operating Margin Is Among Most Tracked
and Used to Meet Corporate Goals

• Important, but progress is inching along
• S&OP improves agility and alignment
• The understanding of the executive team
is a barrier
Conclusion

Our Focus
2-DAY PUBLIC
TRAINING
Princeton – June 24-25
Minneapolis – August 8-9
$1500
GLOBAL
SUMMIT
PODCASTS
www.supplychaininsights.com
#sciwebinar

PAST SUPPLY CHAIN INDEX WEBINARS:
AVAILABLE ON DEMAND
• From September 24, 2012:
The Supply Chain Index, 20 Years in the Making:
A Focus on Process Industries
• From October 26, 2012:
The Supply Chain Index, 20 Years in the Making:
A Focus on Discrete Industries
Webinars
www.supplychaininsights.com/upcoming-webinars
UPCOMING WEBINARS
• June 27th: Supply Chain Index III, Technology/
Apparel/
• July 11th: Big Data Supply Chains and the Future
of Analytics
• August 15th: State of Supply Chain Talent:
Missing Link in the Supply Chain

June 12th S&OP Webinar by Supply Chain Insights, LLC

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June 12th S&OP Webinar by Supply Chain Insights, LLC

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