High Tech Perspective: Overlooked Opportunity from S&OP

© 2013 Steelwedge Software, Inc. Confidential. 1 Plan. Perform. Profit.

High Tech Perspective: Overlooked Opportunity from S&OP

Jan 15, 2013

Single Line of Sight: Plan, Perform, Profit


Presenter: Dennis Omanoff

Dennis is a seasoned executive in Supply Chain and Procurement with experience across security, storage, networking, telecom and retail sectors. Recent leadership positions at Seagate and McAfee resulted in low inventory backlogs, low cost of goods as a percentage of sales , and high annual inventory turnover rates. Dennis was appointed by the U.S. Secretary of Commerce to serve as a Malcolm Baldridge National Quality Examiner. A member of the advisory board for SCM World, he lectures at universities and is a frequent keynote speaker at industry events.

President, Omanoff Consulting Twitter: @DennisOmanoff


High-Tech Challenges •  Volatility: Manufacturing supply chains face ever-increasing threats from unexpected natural disasters such as the Japanese tsunami and Thai floods

Increasing High Tech Demand/Supply Pressures:

•  Escalating Variability: Configure-to-order customization demand growing

•  Uneven Markets: Emerging markets lead growth but high buy/use fluctuation

•  Fickle demand: Consumers change mobile devices every 7 months


The Over Looked Value of S&OP In High Tech: Driving Top Side Revenue


Poll #1

Do you use S&OP to deliver top side revenue? 1. Yes 2. Not yet, but it is a priority for 2013 3. Not yet, but want to understand how to do it 4. No


Value Captured from S&OP Today

Source: SCM World, 2012


•  Leadership/Internal Engagement •  Customer Engagement •  Connecting the “other side” of the order: Supplier Engagement •  Information Visibility

Getting to the Value of S&OP


Poll #2

Who runs your S&OP? 1. Finance/General Management 2. Sales & Marketing 3. Supply Chain/Operations 4. Other


Supply Chain Runs Most S&OP Today



When Sales is involved in S&OP, things work better



Connecting Customers and Suppliers to the “Other Side” of the Sales Order

Common practice: focus

on sales order

Downside: Supply disruptions - amplified by poor visibility into customer inventory and supplier capability

Value of getting it right:

Maximize revenue and customer loyalty; Create stockholder and stakeholder value


The Missing Link: Flexibility Pricing



Poll #3

What are you doing to deliver information visibility? 1. Collecting data in functional systems for respective departments (CRM for sales, SCM for operations, ERP for finance, etc.)

2. Connecting functional data manually with spreadsheets for monthly S&OP meetings

3. Connecting company-wide data with S&OP specific tools for monthly S&OP meetings

4. Connecting company-wide data with S&OP tools for updated access anytime


Getting Better Insight from Information Power Internal/External Collaboration

With an integrated S&OP technology platform, you can: ü Connect sales forecast, revenue plan and operational budget ü Visualize external demand from channel partners, VARs, and

distributors ü Anticipate vendors’ supply disruptions, constraints ü Balance inventory levels, on–time delivery and customer service levels ü Forecast option attach-rates ü Allocate capacity and raw materials across multiple suppliers ü Plan new products via historical performance and curve modeling ü Enable configure-to-order as well as build-to-stock business models in

the same environment.


High Tech Case Study •  High value, configure-to-order product mix •  Extremely volatile global demand

A single, inaccurate forecasting decision can cost $5M in lost revenue/surplus inventory

Therefore, planning MUST: •  Allow visibility across sales, manufacturing and senior executives •  Access latest customer demand and supplier constraints •  Deliver aggregate and drill-down level of data views for meaningful

insights •  Provide an automated, forward-looking estimate of working capital

investment


Steelwedge Solution •  Scalable data-integration platform integrates:

–  Oracle (CRM), SAP (Manufacturing), Business Objects (Sales), Essbase (Corporate Finance)

•  Powers collaboration and forecast visibility between 150 users •  Institutionalizes consistent demand data and revenue risk assessment

–  8 global business units and 17 customer accounts

•  24/7 reporting: real-time data and on-the-fly reports –  Customers (~ 15 parameters across 2000 locations) –  Products (~ 20 parameters across 115 SKU’s) –  Demand Opportunities (~ 40,000 across 7 years) –  Data @ Historical Points-in-time (~ 180 = 6 months) –  Forecast Perspectives (3 – Account Managers, Sales VP + Manufacturing)


Optimizing S&OP for High Tech Manufacturers

For the Sales Team ü  Collaborative forecasting:

VARs, distributors, customers & sales

ü  Plan at any level of detail: including configuration packages

ü  Opportunity management: CRM integration ü  AOP visibility ü  View Cross-functional

demand



For the Product Management Team ü  Develop attach-rate forecasts ü  Support Fixed Bill of Material Planning ü  Forecast at the option level or the planning

BOM level ü  Control planning granularity



For the Planning Team ü  Drive company specific planning

processes with One-Click Planning™ alert-driven workflow

ü  Provide planning process visibility and progress reporting

ü  Drive assigned or exception-based review policies



For the Executive Team ü  Consolidate supply, demand and

finance hierarchies into one model ü  Model business complexity and

global volatility risks ü  Explore options to resolve gaps ü  Generate upside/downside demand

scenarios ü  Enable capacity-adjusted scenarios

to resolve exceptions. ü  Enable detailed planning

assumptions


For more information, contact us at www.steelwedge.com

High Tech Perspective: Overlooked Opportunity from S&OP

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