What Great Sales & Operations Planning (S&OP) Feels Like!

EXECUTIVE S&OP by Tom Wallace WWW.TFWALLACE.COM
Tom Wallace/Agility Series Webinar
September 17, 2013
What Great S&OP Feels Like

Two Ways to Measure:
• Quantitative
- Checklists
- Maturity Stages
• Qualitative- How Does It Feel?

1. A Visible Increase in Teamwork
Successful S&OP = Better Teamwork
• When Teamwork does not improve,
S&OP wasn’t implemented properly
• Improved Teamwork is a given, if . . .
you do it right.
“This process enables my staff (the vice
presidents) to view the business through
my glasses.” Division President

Check Up
Question: has teamwork in your
company visibly improved from
before S&OP?

2. Demand and Supply
Normally in Balance
This is S&OP’s most fundamental task.
If it can’t do this, you can forget about the rest
“Tom, I used to spend most of my day out on
the plant floor expediting and putting out
fires. Now, I have to remind myself to get out
of my office and make an appearance in the
plant.” Plant Manager

Check Up and Poll Question
Question: has “fire fighting”
decreased from before S&OP??”
A. We do very little fire fighting anymore
B. It’s about the same as before S&OP
C. It’s worse than before S&OP

3. Communications
Clearer and More Certain
“We need better communications
around here.”
The Executive S&OP process is
“communication rich” and “collaboration driven”
• open and complete communications
• cross-functional collaboration
for resolution of issues and problems

Check Up
Question: are fewer things “falling
through the cracks?”

4. Fewer Surprises -
Resolved Quickly
“Window Into The Future”
• Keep potential problems from
becoming real problems
• Resolve real problems quickly
“With S&OP and one set of numbers,
we can now resolve problems in less
time than we needed to decide whose
numbers to use.” VP Product Supply

Question: when “surprises” occur, such as
demand spikes or supply crashes, does
your S&OP process allow for mid-period
adjustments to be made quickly?
A. Yes, we are much more agile than before
B. We’ve improved but need to do better
C. No change from before S&OP

5. Eighteen Months or More
Forward Visibility
Q. Why 18 months?
A. 18 months “wraps around” the fiscal year
Example:
• Fiscal Year Ends 12/31
• Start working on next year’s plan in
August of the current year
• 18 months covers all of next Fiscal Year
• Demand Plans, Supply Plans, Finished
Goods Inv Plans + Others already exist

Check Up
Question: does your annual financial
planning process use demand plans
and supply plans from Executive S&OP
or does all of the data it uses come from
other sources?

6. One Set of Numbers Internally
Multiple Display Formats/Multiple Units of Measure
- Sales
- Marketing
- Finance
- Operations
- Supply Chain . . .
. . . all coming from one set of data
Underpromise & Overdeliver
S&OP doesn’t care what you tell Wall Street
or Corporate. Tom Wallace

Question: is everyone singing off the same
sheet of music . . . or not?
A. Absolutely. We run with 1 set of numbers
B. Some departments are still not on board
C. It’s the same as before S&OP

7. Top Management engaged
and enthusiastic
“Tom, when I think back to last year, before
we had S&OP, I can’t imagine how we
were able to run this business.” CEO
Attendance at monthly Exec S&OP Meeting?
- Good News
- Bad News

Question: does your executive team, up to
and including the leader of the business,
participate hands-on in the Exec S&OP
meeting each month?
A. Absolutely.
B. It’s spotty.
C. It’s the same as before S&OP

8. Executive S&OP helping to
achieve strategic goals
From S&OP: Beyond The Basics:
1. BASF – Strategic Goal: become #1 in the world
“While BASF does many things well, S&OP has
contributed significantly to helping us achieve
our present #1 position in the industry.”
Business Process Education Manager

achieve strategic goals – cont’d
2. Cisco Systems – Strategic Goal: create a new
business far different from its traditional
products
“We at Cisco consider the Telepresence story a
great example of how S&OP can make major
contributions to the company’s strategy. Being an
early mover into a new market requires a different
approach than when we take on more mature
markets, regardless of our market position.”
Director, Sales & Operations Planning

achieve strategic goals – cont’d
3. Dow Chemical – Strategic Goal: integrate
the Rohm and Haas acquisition into Dow
Implementation of Executive S&OP within
our combined businesses played a
significant role in helping to integrate the
two companies. This was a driving force for
enabling cost and growth synergies.”
VP Supply Chain

Check Up
Question: is your company’s use of
S&OP confined to balancing demand
and supply, integrating financial and
operational plans – the basics – or is it
also being used in a major way to
support strategic initiatives?

Recap –
1. A Visible Increase in Teamwork
2. Demand and Supply Normally in Balance
3. Communications: Clearer and More Certain
4. Fewer Surprises - Resolved Quickly
5. Eighteen Months or More Forward Visibility
6. One Set of Numbers Internally
7. Top Management Engaged and Enthusiastic
8. Executive S&OP Helping to Achieve Strategic Goals

News Flash #1
New on LinkedIn:
Tom Wallace’s S&OP/Q&A Group
Mission: for people working with S&OP, to help them get
clear, easy to understand answers to their questions
Fair Warning: I don’t have all the answers. Sometimes
I may be asking you for answers
So don’t be bashful; asking questions is easy
and quite painless

News Flash #2
My latest book: Sales & Operations Planning: Beyond
the Basics, is available to participants in this webinar for
a 25% discount.
To order, go to www.tfwallace.com. In the Bookstore, as
you purchase the book, use discount code
STEELWEDGE 9-17.
That will get you the friendly price for that book
plus other items.

24© 2013 Steelwedge Software, Inc. Confidential.
Nari Viswanathan/Agility Webinar
September 17,2013
Technology: Making S&OP Feel Even Better

• How Does Technology Help S&OP Feel Better?
• Gets Everyone on the Same Page
• Collaborative planning: aggregates team, data
• Gets Supply, Demand and Finance in Balance
• From Fire Fighting to Integrated Reconciliation
Agenda

Demand Collaboration: Everyone on the Same Page
Marketing
Forecast
Account
Forecast
Sales
Manager
Forecast
Demand
Forecast
Inputs
Forecast,
NPI & EOL,
Product
Volume
Sales, Orders,
Opportunities,
Budget &
Master Data
Account Level
Forecast
Sales Region
Forecast
Demand
Review and
Geo Forecast
Consensus
Forecast
Planning Processes
Nightly
Transaction
Files
Demand
Analyst
Marketing
Account
Management
Sales
Management
Demand
Planning
Consensus
Team
Compass Inputs
and Outputs
Consensus
Forecast
Insight
S&OP Apps
Customer
Collaboration
NPI/EOL Modeling
Promotion Modeling
Historical
Demand
Analysis
Statistical BOM
Inverse SBOM
Supersession
S&OP
Sales
S&OP
Ops
Executive S&OP
Collaboration
Performance
Current Plan
Finance
Waterfall
KPI Dashboard
Collaboration
• Demand Collaboration
• Classic example of multi-
functional collaborative
process
• Critical to engage Sales
and Marketing
• Majority of S&OP
implementations fail due
to lack of sales or
management executive
participation

Modeler
Update the marketing forecast in
units and revenue
Add Macro Economic Data
to influence the forecast
Product View for all
customers
Add Market Size to determine the
market share percentage
Outlook Metrics
• VP of Marketing
• Key participant missing
in many S&OP
Processes

Products by Customer
Rapid entry of Update
Unit and ASP Forecast
• Sales Personnel
• 1000’s of users
• Remote regions
• Have inhibition using
supply chain tools

Performance report
SalesSales analysis
• Metrics drive behavior
• Key to be flexible and
agile in terms of metrics
• Cross-functional as well
as functional metrics are
required

• Gets Supply, Demand and Finance in Balance:
Scenario Modeling for Tradeoff Visibility
• From Fire Fighting to Integrated Reconciliation
Agenda

2.90 Consensus plan
• Finance Plan is a
key input to S&OP
as well as output

Agenda
• Gets Supply, Demand and Finance in Balance
• From Fire Fighting to Integrated Reconciliation:
• Real Time Exception Handling

Exception Handling: Sales Beyond the S&OP Cycle
VP of Sales
• Gets Real-time
Updates on Sales
Performance
• Can Trigger ad-hoc
S&OP Cycles

Exception Handling: Supply Beyond the S&OP Cycle
• VP of Supply
• Integrated Scenario
Management
• Drives Reconciliation
and Tradeoffs

ROI of Steelwedge S&OP Solution
• Average savings $5-$10M
per $1B in revenue
• Better scale
• Master data
management
• Collaborative planning
• Scenario modeling
• Single view of your
business

What Great Sales & Operations Planning (S&OP) Feels Like!

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What Great Sales & Operations Planning (S&OP) Feels Like!