Sales & Operations Planning

Update

October 2011

Todd Kyriss

Agenda

» Review of S&OP & Critical Success Factors

» S&OP Assessment Process & Must Have Standards

» Upcoming S&OP Training Programs

Sales & Operations Planning

What Is S&OP? Sales & Operations Planning is a set of cross-functional decision-making processes with four Objectives:

▪ To balance supply and demand (and inventory)▪ To align volume and mix▪ To integrate financial and operating plans▪ To set strategy and policy regarding demand and

supply

S&OP Goal - Drive excellence in:▪ Inventory, Service, Cost

S&OP Review

S&OP Operating Rhythm

S&OP Product Family Integrated Information Display

Strategic Planning

Business Planning

Executive Sales and Operations Planning (S&OP)

VOLUME

Master Production Scheduling (MPS)

MIX

Detailed Planning & Execution

SystemsMRP, Plant scheduling,

Supplier scheduling, transport scheduling,

etc…

Fore

cast

ing &

Dem

and

pla

nn

ing C

apacity

/ invento

ry p

lannin

g

S&OP Planning Processes

Critical Success Factors

»Leadership and Participation ▪ President treats S&OP as a top GBU priority; uses process to

integrate financial and operating plans▪ Executives and other key leaders actively participate in S&OP

monthly operating rhythm

»Extending our forecasting horizon to 18 months▪ Short-term forecasting at mix level▪ Long-term forecasting at volume level▪ Tight integration of CDI, Sales, Marketing and Supply Chain are

needed to support this

» Integrated Information Display▪ A single holistic picture of a product family’s demand, supply and

inventory

Critical Success Factors

» Flawless Execution of the Four Key S&OP Processes ▪ Executive S&OP ▪ Master Production Scheduling ▪ Demand Planning ▪ Supply Planning

» Execution of Monthly Operating Rhythm▪ Data Close▪ Demand Agreement Meeting ▪ Supply Agreement Meeting ▪ Integration Meeting▪ Executive Meeting

» Global Roll-up ▪ By Region by Product Family▪ Total roll-up for GBU

Global S&OP: Entities

» In most cases there are multiple smaller “entities” within the GBU▪ Includes both demand and supply

▪ Have their own S&OP process

» Global consolidation at the GBU level▪ Combines S&OP plans from all the entities

▪ Reviewed in a single Global Executive Meeting

Step 1:

Data Close/

Update

Step 2:

Demand

Planning

Step 3:

Supply

Planning

Step 4:

Integration

Meeting

Step 5:

Executive

Review

Step 6:

Global

Roll-up

Step 7:

Global

Exec. Mtg

Entity A

Entity B Entity C Entity D

GBU

GBU

» S&OP Assessments for 2012

’12 Assessments

» Coming October through April

» 80% of score based on Must-Have Standards

» 20% on Recommended Best Practices

» Schedule is available on the sharepoint at xxxxxxx

Types of S&OP Assessments

Regional Other Entity GBU

1.Fundamentals

2.Data Close/Update

3.Demand Planning

4.Use of Metrics

Most entities will, by definition, require a full assessment with all seven sections.

1.Fundamentals

2.Data Close/Update

3.Demand Planning

4.Supply Planning

5.Integration

6.Executive Review

7.Use of Metrics

(APAC, EMEA, LA, NA)

Some entities will be treated as regions

serving a single GBU

Combined report out with roll-up of

regional & entity assessments

Overall GBU scores will be calculated as an average weighted by sales in each entity and/or region

Must Have Standards & Recommended Best Practices

» Activities identified as must-have standards:

▪ Fundamentals & Use of Metrics

▪ Best Practices for the Planning Processes

▪ Rigor Around the S&OP Operating Rhythm

» Activities identified as recommended best practices:

▪ History for at least 2 years

▪ Specific reports/metrics are generated and used

▪ Data and metrics for top customers are discussed

▪ Organizational structure defined that supports S&OP

Must Have Standards: Fundamentals & Use of Metrics

» Standard reports are generated to support the operating rhythm

» Annual calendar is published showing meeting dates

» Participants in the process have relevant S&OP objectives in their annual review

» Use of a single integrated information view for S&OP by month looking forward 18 months and backwards 3 months

» All required metrics are being measured and have documented targets

Must Have Standards: Best Practices for Planning Processes

» Data Close & Update▪ Products mapped correctly to the

hierarchy▪ Historical data is cleansed▪ Statistical forecast is generated

monthly

» Demand Planning▪ 18 month rolling forecast for volume ▪ Input received from Marketing &

Sales

» Supply Planning▪ E&O root cause is identified▪ Capacity constraints are identified

and reviewed regularly▪ Total requirements are an input to

master scheduling

» Integration▪ Action item list is generated▪ Agenda for Executive Review

meeting is prepared

» Executive Review▪ Integrated S&OP information view

is current, visible, and available▪ S&OP plan is compared to

financial planStrategic Planning

Business Planning

Executive Sales and Operations Planning

(S&OP)

VOLUME

Master Production Scheduling (MPS)

MIX

Detailed Planning & Execution Systems

Fore

cast

ing

& D

em

an

d p

lan

nin

g Cap

acity

/ inven

tory

pla

nn

ing

S&OP Planning

Processes

Must Have Standards: Rigor around the S&OP Operating Rhythm

» Contacts are defined and communicated within and across each entity

» Required meetings are held in order with a documented agenda

» All required participants attend the meetings

» Decisions are communicated as appropriate

» S&OP Training Program

Course Curriculum & Delivery Methods

Course Audience Delivery

S&OP Process Overview All E-Learning

Fundamentals & Use of Metrics Executives Instructor Led

Data Close & Update Some Marketing & Demand Planning

E-Learning

Demand Planning & Demand Agreement Meeting

Sales, Marketing, Demand Planning, & Finance

Instructor Led

Supply Planning & Supply Agreement Meeting

Supply, Sourcing, Materials Instructor Led

Integration Activities & Meeting Sales, Marketing, Demand, Supply, Finance

Instructor Led

Executive Meeting Executives Instructor Led

Taking Classes

» E-Learning Courses▪ Accessed through xxxxx

▪ Courses are now available

▪ Overview course is prerequisite for instructor led classes

» Instructor Led Classes▪ Self-enroll through xx

▪ Classes start in November and go through June ’12

▪ Campus based at xxxx xxxx Training Campuses

▪ Some of you will be asked to travel to another campus for one class to facilitate cross-GBU collaboration