Webinar Slides Forecasting for Sucess_ Integrating Sales and Demand Planning

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Forecasting for Success: Integrating Sales and Demand Planning

April 7, 2016

Forecasting for Success: Integrating Sales and Demand Planning

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Tony Kratovil Industry Director Manufacturing & Automotive

Manufacturing’s Future: Going Beyond-the- Product

A Diversity of Manufacturing Customers Driven by Customer Success

Diversified Industrials Durable Goods Heavy Industrials Automotive

Connectivity Revolution in Manufacturing

1970s 1900s 1700s Today

Mechanization

Mass Production

Automation

Connectivity

More Empowered Connected 24x7, mobile-first, social,

enabled by data

Connectivity Drives Demand for Deeper Engagement

New Experience Bar

Smart-enabled

Services Always-on

Relationship Personalized

Engagement

Demand: Engagement Beyond the Product

Going Beyond-the-Product Needs Digitization at 3 Levels

Front-office Engagement 1:1, data-driven, proactive marketing, sales, service

Value Chain Alignment Real-time collaboration around the customer

Agile Innovation Real-time connected product insight driving

new services

Systems of Record

Manufacturers Invested in Systems of Record Digitizes operations, not engagement

Logistics EDW MES ERP Demand Planning HR

Internal Focus Operations – Supply Chain – Infrastructure – Procurement

rely on spreadsheets to track customer

data

61%

Source: 2016 Connected Manufacturing Service Report

Systems of Record

Manufacturers Need a System of Engagement

Logistics EDW MES ERP Demand Planning HR

want to reimagine service with digital

engagement

87%

Systems of Engagement Mobile Cloud Social

Data

Science Internet of

Things

Roadmap to Go Beyond-the-Product

Customer Success Platform for Manufacturing

Inquire-to-Order Unlock ERP

Service Excellence Connected Products

Digitize the Front Office Digitize Alignment Digitize Innovation

Personalize & accelerate customer acquisition

Expedite 1:1 service everywhere

Drive real-time global alignment

Predict & personalize with real-time insight

Cloud Mobile Social Data Science IoT

Unlock ERP

Unlock Data Integrate legacy data into a real-time, extensible, standards-based, scalable cloud platform

Mobile-ize Insight Lightning development UI to build employee & partner apps across HR, Operations, PLM, Quality, Inventory Management

Align Everyone Mobile collaboration, built-in analytics & 3600 customer view, driven by CRM & ERP data, for everyone to align around the customer

Align disconnected value chain globally

Digitize the Front Office Digitize Alignment Digitize Innovation

What is a Fullforce Solution

Transformational Industry Use Cases High Impact, Unique Horizontal Use Cases & Focus Products

Partner Industry Expertise + proven success at anchor customer + Salesforce Customer Success Platform = Fullforce Solution

Improving Sales Forecast Accuracy

INCORPORATING CUSTOMER SALES FORECASTS INTO S&OP 2016

• Historically inaccurate

• Not timely

• Too many versions/ spreadsheets

• Inaccurate/incomplete forecast

© 2015 Acumen Solutions. All Rights Reserved. www.acumensolutions.com

CONSEQUENCES OF HAVING POOR SALES FORECASTING DATA FOR MANUFACTURERS

Manufacturers have struggled to accurately forecast sales for decades. They lose revenue and carry excess inventory. It is a very expensive issue

WHY THE LACK OF CONFIDENCE IN DATA?

ACCURATE SALES FORECASTS

REVENUE 10%-15%

• Lower level of on-hand inventory (20% vs. 35%) as a % of total sales

• Less unfulfilled backlog (10% vs. 14%)

• Reduced level of obsolete inventory (less than half )

Source: Answering the Sales Forecasting Challenge For Manufacturers by Right90 May 2010)

Three issues are pervasive. The first is supplementing (predicted) historical and market data with (actual) input from customers and distributors


• What tools and processes help you capture forward looking customer demand?

• What information do you gather to forecast future demand for products and services?

• How often do you review demand forecasts with customers?

• Is there a process for measuring customer forecast accuracy?

CUSTOMER INPUTS REPRESENT INSIGHT INTO TRUE DEMAND HOW DO YOU DO THIS TODAY?

Extrapolative Demand

Statistical Forecast

Judgmental Test

Customer Inputs

Forecast Accuracy


TYPICAL SALES AND DEMAND PLANNING PROCESS CREATE FORECASTS LACKING INTEGRITY AND THUS CONFIDENCE

Issue two: Typical sales forecasting/demand management is a long, manual process supported by spreadsheets. It cannot support timely changes and updates

Sales Rep and Customer develop 4-

24 month demand forecast

Sales Rep uses Excel template to record

forecast

The Demand Team consolidates

templates

The Demand adjusts data, models scenarios and

calculate customer volumes

Demand Team output used to create

financial forecast

The MRP process translates volumes to

the Build List and component parts

4-24 month Component forecast

sent to suppliers

Done w/o customer input or market data

Limited Controls = poor data

Manual and time consuming

Based on inaccurate data

Compensates for poor data

Based on inaccurate data

Overcompensation= excess inventory

Customer sends 0-4

month delivery

schedule weekly


DATA ACCURACY + $000K IN SAVINGS + 60% REDUCTION IN ORDER ENTRY TIME

The third issue is incomplete data that lacks the details that demand planning teams need. Imagine if there were a solution that addressed all three

ACCURATE FORECASTS REVENUE

• Lower level of on-hand inventory

• Less unfulfilled backlog

• Reduced level of obsolete inventory

Key factor for success #1 Allow those that have a critical sales forecasting role to use the same system

4/7/2016 © 2015 Acumen Solutions. All Rights Reserved. www.acumensolutions.com 6

SALES REPRESENTATIVE

• From the Opportunity

• Create sales forecast

• Overview of forecast page

• Transfer Volume to Build Lists

• Control distributor access

• Update sales forecast

• Add notes and submit the sales forecast

DISTRIBUTER

• View the sales forecast

• Update the sales forecast

• Add notes and comments

• Add notes and submit the forecast

DEMAND TEAM

• Global forecast lock

• Ability to update forecast

• Global Unlock

• Add notes and comments

Key factor for success #2 Make it easy to provide information for all key players involved


COLLECT INPUT FROM SALES AND SALES OPS TEAMS

SUPPORT UPDATES TO MULTIPLE ACCOUNTS

PROVIDE CONTEXT USING ERP DATA

ALLOW DEMAND TEAMS ACCESS/CONTROL

Key Factor for success #3 Allow sales/distributer teams to forecast based on the data they have


CALCULATE COMPONENT QUANTITIES FROM PRODUCT FORECASTS

© 2015 Acumen Solutions. All Rights Reserved. www.acumensolutions.com 9

Successful sales forecasting solutions allow teams to provide accurate customer forecasts when supply agreements are signed and as demand is updated

• Captures high level product forecasts and maps them to component parts

• Aggregates sales and market forecast data while providing sales reps context on actuals from ERP systems to improve accuracy

• Supports integrated business planning between sales and demand teams

• Highlights shifts in demand using near real-time information

• Ease of use: Captures forecast data from sales, using a sales system

• Scales to complex sales organizations with geographical territories, global clients

• Configurable to support your forecasting measures

• Built on the Sales Cloud, App Cloud and the Communities Cloud

SALES & DEMAND TEAMS COLLABORATE ON SALES FORECASTS WITH FULL VISBILITY

MILLIONS LESS THAN EQUIVALENT ERP APPS

• Inaccurate forecast, Lack of details • Incomplete forecast that are not timely • Too many versions/ spreadsheets

WE ADDRESS THE CHALLENGES THAT RESULT IN POOR DATA INTEGRITY

4/7/2016

Fortune 100 Global Equipment Manufacturer increased operating income by 7.5%

© 2015 Acumen Solutions. All Rights Reserved. www.acumensolutions.com 10

• Our client, a global equipment manufacturer, sells products across distribution channels (OEM Stores, Distributors etc.)

• Both Manufacturing and supply chain organizations had limited visibility to ensure right products were manufactured and delivered to its customers

BUSINESS SITUATION

• Inaccurate short term sales forecasts were resulting in inaccurate demand and excess inventory

• Existing forecasting process was manual, supported by spreadsheets with data and version control issues. Collected data sets were hard to manage given complex catalogs across industries

CHALLENGE

• Acumen Solutions conducted blueprint and vision sessions with executives to define current and target business

• Acumen Solutions delivered role based solution to manage demand cycle with formal notification cycles and shorten order entry

KEY ACTIVITIES AND OUTCOMES

KEY BENEFITS

• Enabled Short Term Forecasting (STF) monthly for

up to 27 months ahead

• Long Term Forecasting (LTF) annually for up to 10

years

• Data on Actual’s, Orders and Business Plan for -12

months to +27

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Webinar Slides Forecasting for Sucess_ Integrating Sales and Demand Planning

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