Bob Stahl September 9-10, 2010 InterContinental Hotel Boston, Massachusetts September 9-10, 2010...

Bob Stahl www.tfwallace.comm www.RAStahlCompany.com

September 9-10, 2010InterContinental HotelBoston, Massachusetts

September 9-10, 2010InterContinental HotelBoston, Massachusetts

Bob Stahlwww.RAStahlCompany.com

www.tfwallace.com

Bob Stahlwww.RAStahlCompany.com

www.tfwallace.com

Sales & Operations Planning:Sales & Operations Planning:

Beyond the BasicsBeyond the BasicsSales & Operations Planning:Sales & Operations Planning:

Beyond the BasicsBeyond the Basics

IE GroupIE GroupSales & Operations Planning SummitSales & Operations Planning Summit

IE GroupIE GroupSales & Operations Planning SummitSales & Operations Planning Summit


With apologies to With apologies to Charles Charles

Dickens . . .Dickens . . .

With apologies to With apologies to Charles Charles

Dickens . . .Dickens . . .•Worst of Times . . .

These are perhaps the worst economic conditions in a generation or two . . . and it may get worse.

•Best of Times . . . For those who choose to use them, we have terrific tools in our hands today to deal with the uncertainty!


Beyond the Beyond the Basics . . .Basics . . .Beyond the Beyond the Basics . . .Basics . . .• Basics

– Volume Balance– Gross Revenue Projections

• Simpler & Better Tools– Market-Facing Family Forecasting– Simplifying Data Assumptions about MIX– Rapid Simulation & What-If Analysis– Full Financial Integration (P&L and Balance Sheet, etc.)

• Beyond the Basics– Strategic Planning– Scenario Analysis with Financial Consequences– Risk Management including Cash Flow & Capital Investment

Top Management’s Handle on the Business


‘The Books’‘The Books’

QuickTime™ and aTIFF (LZW) decompressor

are needed to see this picture.

QuickTime™ and aTIFF (LZW) decompressor

are needed to see this picture.


Step #5ExecutiveMeeting

Decisions &Game Plan

Step #4Pre-S&OPMeeting

Conflict Resolution, Recommendations &

Agenda for Exec. Mtg.

Step #1Data

Gathering

End of Month

Sales Actuals, Statistical Forecasts

&Supply Actuals

Step #2DemandPlanning Management Forecast

1st-pass spreadsheets

Step #3Supply

Planning Capacity constraints2nd-pass spreadsheets

Heavy

Liftin

g

The Executive S&OP ProcessThe Executive S&OP Process

Creates a Disciplined Rhythm

Creates a Disciplined Rhythm


Beyond the Beyond the Basics . . .Basics . . .Beyond the Beyond the Basics . . .Basics . . .• Basics

– Volume Balance– Gross Revenue Projections

• Simplified Tools– Market-Facing Family Forecasting– Simplifying Data Assumptions about MIX– Rapid Simulation & What-If Analysis– Full Financial Integration (P&L and Balance Sheet, etc.)




Customer View

Customer View

Historical View

Historical View

Market View

Market View

Reconciliation Process(The DAM Meeting)

Reconciliation Process(The DAM Meeting)

ConsensusForecast

ConsensusForecast

Applying “Puts & Takes”Applying “Puts & Takes”

CompanyForecastCompanyForecast

Multiple Views . . .Multiple Views . . .Multiple Views . . .Multiple Views . . .


Simplifying Simplifying Data Data

Assumptions . . .Assumptions . . .

Simplifying Simplifying Data Data

Assumptions . . .Assumptions . . .RRP Run Rate Conversion

Units to Hours Control Chart

0.42

0.44

0.46

0.48

0.5

0.52

0.54

0.56

Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb

2006 2007 2008

Hours per Unit

UCL LCL Hours per Unit Linear (Hours per Unit)

AssumptionSensitivity


An Example . . .An Example . . .An Example . . .An Example . . .Resource Requirements Plan - Dept #8

0

50

100

150

200

250

Oct Nov Dec Jan Feb Mar Apr May Jun JulAug Sep Oct Nov Dec Jan Feb Mar

2007 2008 2009

Hours Per Month

Normal Capacity Normal Capacity +25%Medium Widget Required Capacity Large Widget Required Capacity


2007 Fiscal Year Status

$-

$5,000

$10,000

$15,000

$20,000

$25,000

$30,000

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Revenue in 1000's Dollars

Cumulative Actual YTD Cumulative Original Plan 2007 Latest Call 2008 S&OP Plan

Original Plan 25,400$ Latest Call 25,540$ 2008 S&OP 27,959$

2007 Fiscal Year

Fiscal Information . . .Fiscal Information . . .


Beyond the Basics . . .Beyond the Basics . . .Beyond the Basics . . .Beyond the Basics . . .

• Basics– Volume Balance– Gross Revenue Projections

• Simplified Tools– Market-Facing Family Forecasting– Simplifying Data Assumptions about MIX– Rapid Simulation & What-If Analysis– Full Financial Integration (P&L and Balance Sheet, etc.)




““Strategic Planning . . Strategic Planning . . ..

forward in forward in reverse”reverse”

““Strategic Planning . . Strategic Planning . . ..

forward in forward in reverse”reverse”

Ro

ber

t H

aye

sH

BR

-No

v/D

ec 1

985

Str

ateg

ic P

lan

nin

g -

fo

rwar

d i

n r

ever

se

Exec

utiv

e S&

OP

Strategy

Tactics

Execution

ExecutiveS&OP

Ann

ual B

usin

ess

Plan

Master Schedule

DoingTheRightThings

DoingThe

ThingsRight

WidgetsWidgetsWidgetsWidgets

Two Scenarios:

1. Supply Leveled against Consensus Demand

2. Supply Leveled against High Demand

Consensus ForecastConsensus Forecast

High ForecastHigh Forecast

16Gross Revenue – High Forecast

17Direct Margin – High ForecastDirect Margin – High Forecast


Center of Gravity . . Center of Gravity . . ..Center of Gravity . . Center of Gravity . . ..

Customers

Employees(Suppliers, Community, Country, Planet)

Owners

ExecutiveS&OP

ExecutiveS&OP

Desired Force = CentripetalNatural Force = Centrifugal


Path of Success . . Path of Success . . ..Path of Success . . Path of Success . . ..

1 2 3 4 5 6 7 8 9

Months

Business

Improvement

Phase IPhase IPilot Demo

Phase IIPhase IIExpansion

Live PilotDemonstrationGo/No-Go #2

Phase IIIPhase IIIFinancial Integratio

n

ExecutiveBriefing

Go/No-Go #1

KickoffSession

Low CostLow RiskHigh ImpactQuick Results

Low CostLow RiskHigh ImpactQuick Results


Done Done Properly . . . Properly . . . Done Done Properly . . . Properly . . .

Simpler(Not Easier)

Better(in 90 Days!!!)


Good Luck & Good Luck & Thanks for Thanks for Listening Listening

Good Luck & Good Luck & Thanks for Thanks for Listening Listening

Bob Stahl

508-226-0477

[email protected]

www.tfwallace.com

Bob Stahl September 9-10, 2010 InterContinental Hotel Boston, Massachusetts September 9-10, 2010...

Documents

Transcript of Bob Stahl September 9-10, 2010 InterContinental Hotel Boston, Massachusetts September 9-10, 2010...