Who Owns the “S” in S&OP?
2 © 2014 Steelwedge Software, Inc. Confidential.
Speaker
• Danny Smith, VP Industries
• Responsibilities/Role
• In-house expert on S&OP/IBP
• Leads Industries initiatives
• Background
• BS Industrial Management; MS Decision Sciences
• Strategic Planning, Fortune 300: corporate planning efforts (i.e. S&OP)
• Career: “an effort to find a better way”
• Most recent – global solution champion for Integrated Business Planning at Oracle
• Danny Smith, VP Industries
• Responsibilities/Role
• In-house expert on S&OP/IBP
• Leads Industries initiatives
• Background
• BS Industrial Management (Georgia Tech); MS Decision Sciences (GSU)
• Strategic Planning, Fortune 300: corporate planning efforts (i.e. S&OP)
• Career: “a 20+ year effort to find a better way”
• Most recent prior to Steelwedge – global solution champion for Integrated Business Planning at Oracle
3 © 2014 Steelwedge Software, Inc. Confidential.
3
“The successful business
executive is a forecaster first,
everything else follows.”
Peter Bernstein
‘Against the Gods: The
Remarkable Story of Risk’
Predict
4 © 2014 Steelwedge Software, Inc. Confidential.
Our benchmarking studies show that the best
forecasters have 15% less inventory, 17% stronger
fulfillment, and 35% shorter cash-to-cash cycle times, all
having a direct impact to the bottom line.
“
”
Who Owns the “S”: Visibility to the Customer Matters
Rob Bois, AMR Research (now Gartner) S&OP Benchmarking Report
5 © 2014 Steelwedge Software, Inc. Confidential.
How Often Is Sales Involved in S&OP?
64%
Involved
NOT Involved
AMR Research (Gartner) S&OP Benchmarking Report
6 © 2014 Steelwedge Software, Inc. Confidential.
How Far Can You Forecast?
70% said “one quarter
or less” CFO Magazine Survey
7 © 2014 Steelwedge Software, Inc. Confidential.
“Expectation Lead Time” & the Bullwhip Effect
Operations
Wrong products
are deployed
Excess inventory;
Stock outs
Financials
Wrong numbers
promised to street;
Missed results
Loss of credibility;
Share price impacts
Customers
Customers don’t
receive orders
Lost sales;
Lost customers Miss on revenue, product,
customer, or timing
Placing a Bet
on the Future
Stock market reactions when
“supply chain” glitches reported:
• Ramp-up/roll-out issues: -11%
• Delays in prod. dev.: -10%
• Production problems: -10%
• Quality problems: -9%
• Parts shortage in mfg.: -7.5%
Source: Dr. Vinod Singhal, Georgia Institute of Technology
Expectation Lead Time:
“customers don’t want to wait”
vs.
Supply Chain Lead Time:
“it takes time to supply”
8 © 2014 Steelwedge Software, Inc. Confidential.
Classic Disconnects…
Most: Inward Focus
but remember…
Demand-Driven Leaders
(Outward Focus)
Out-Perform Competition
9 © 2014 Steelwedge Software, Inc. Confidential.
Everything Is Increasingly Connected
Internet of Things
September 2012:
• Facebook: 900 Million
• LinkedIn: 177 Million
• Twitter: 140 Million
Today:
• Facebook: 1.3 Billion
• LinkedIn: 277 Million
• Twitter: 646 Million
Social Listening for Competitive Advantage:
Bruce Richardson, Chief Enterprise Strategist, Salesforce From Steelwedge Webinar April 2014 “Social Supply Chain: Linking Sales Intelligence to Supply Chain and Finance”
11 © 2014 Steelwedge Software, Inc. Confidential.
Are We Using the Information?
Customers Traditional Approach:
Statistics
?
12 © 2014 Steelwedge Software, Inc. Confidential.
Is this the Answer?
missing something?
3%
5%
5%
8%
10%
13%
12%
15%
22%
3%
6%
5%
5%
6%
7%
10%
9%
12%
8%
14%
16%
3%
7%
7%
6%
8%
10%
11%
6%
12%
14%
13%
Other
Lack of external cross-functional collaboration
Managing relationships + processes with outsourcing partners
Cost volatility
Logistics constraints, performance, or costs
Supplier performance/variability
Lack of visibility across supply chain
Supply chain talent
Lack of internal cross-functional collaboration
Supply chain network complexity
Difficulty or inability to coordinate and synchronize end-to-end SC processes
Forecast accuracy + demand variability
Ranked First Ranked Second Ranked Third
Sum = 51%
42%
30%
29%
32%
31%
20%
17%
11%
16%
Q07. What do you consider to be the top three obstacles to achieving your
organization's supply chain goals and objectives?
14%
6%
... and it
has been
this way for
years!
Despite Spending All That Money on Planning …
Tim Payne, Research Vice President, Gartner
From Steelwedge Webinar June 2013 “From Re-think Your Planning Technology Priorities”
14 © 2014 Steelwedge Software, Inc. Confidential.
Poll 1: Who Owns “S” in S&OP?
A: Sales
B: Supply Chain
C: Finance
D: Other
15 © 2014 Steelwedge Software, Inc. Confidential.
Who Owns the “S” in S&OP?
Purists: SALES
Realists: SUPPLY CHAIN
Risk – Averse: FINANCE
…Humans!
Peer
Katie Vas
Janella
16 © 2014 Steelwedge Software, Inc. Confidential.
Humans Talking to Humans
Customers
Janella
Peer
?
17 © 2014 Steelwedge Software, Inc. Confidential.
Janella Pre-ESOP
Trying It With Spreadsheets
Demand Planning, SCM/APS Systems
ERP, Financial, & Transactional Systems
Consolidation, Review,
Overrides
Data Collection,
Reconciliation Consensus
Process ESOP
Sales
Manual
Complex
Security Risk
Not Scalable
Does this Give Executives
an Agile & Predictable
Decision-Making Process?
Peer
18 © 2014 Steelwedge Software, Inc. Confidential.
How Long Does it Take?
18+ days
27%
9%
18%
12-17 days
6-11 days
3-5 days
Time Required for Exec S&OP Preparation %
AMR Research/Gartner S&OP Benchmarking Report
19 © 2014 Steelwedge Software, Inc. Confidential.
Somebody Had to Have Seen it Coming!
20 © 2014 Steelwedge Software, Inc. Confidential.
Humans Talking to Humans Gives Management Great Information
Customers
Janella
Peer
Insight When I Need It!
21 © 2014 Steelwedge Software, Inc. Confidential.
Steelwedge: The S&OP Platform Single Cross-Functional Platform for Planning & Analytics
APS Systems
ERP, Financial, & Transactional Systems SAP, Oracle, etc.
Industry
Data
Product / Sub-Family Customer Revenue
Product / Family Territory / Region Revenue
Product / Family Promotions Revenue
Product / Family Region Units & Revenue
Product Stock Locations Units and Inventory
Family / Series Territory / Region Revenue, Margin & Cash
Family / Series / BU Geo Revenue, Margin & Cash
Product Production Site Units and Capacity
Family / Series / BU Geo Revenue, Margin & Cash
Family / Series / BU Geo Revenue, Margin & Cash
Planning Views Stakeholders
Account Managers
Sales Managers
Marketing
Demand Planners
Supply Planners
Production Planners
Finance
Executives
Customers
Suppliers
Cross-functional Planning Environment
Systems Landscape
22 © 2014 Steelwedge Software, Inc. Confidential.
What You Need to Be Successful
• Make gathering the information quick and easy
• Unify demand streams for single view (big deals/new, run-rate, 3rd party)
• Gather & mine sales reps views, but don’t add more work for them!
• Facilitate the collaborative vetting process for sales management
• Leverage experience of management team for credible numbers
• Capture qualitative information
• Drive sales planning improvement
• Track/monitor, measure, so you can improve process
23 © 2014 Steelwedge Software, Inc. Confidential.
Make it Easy – Pull Pipeline Information Directly from CRM
Key Pipeline
Information in
Salesforce.com
Key Information in
Salesforce.com
24 © 2014 Steelwedge Software, Inc. Confidential.
Give Sales Management Complete View for Vetting
New Opportunities
and Run-Rate
Drill to Details
Quantitative and
Qualitative
Information
25 © 2014 Steelwedge Software, Inc. Confidential.
Track
Everything!
Who is More
Accurate?
Give Leadership the Right Tools to Improve the Business
Is there
Bias?
Steelwedge Case Study: Microsemi
Improving Forecast Accuracy at Microsemi
Challenges
• Operations was challenged in building the right supply due to manual, ad hoc planning & forecasting tools
• Planners couldn’t run their own reports, had no historical information, & didn’t have data at the right granularity
• Poor planning visibility led to excess inventory
Solutions
• Enabled monthly & exception-based forecasting and capacity planning • Ensured all product data, including sales pipeline, is centralized &
easily accessible • Adjusted forecast easily on hundreds of part numbers with rationing
feature
Results
• Increased forecasting accuracy • Reduced forecasting time by half • Increased overall fiscal planning accuracy by using Steelwedge to
validate numbers • Improved forecasting for inventory and safety stock
“We love Steelwedge. It
has streamlined our
forecasting process, but it
goes beyond that. It’s great
to have so many systems
pulled into one place, and
it’s changed our lives. This
is a metamorphosis for our
company. We’ve taken
control of our S&OP
process.”
Laura Finkelstein
Vice President of Product
Management
Microsemi
Company Microsemi (Formerly
Symmetricom)
Headquarters Aliso Viejo, CA USA
Industry High Tech
Products and Services Semiconductor and system
solutions for communications,
defense & security, aerospace
and industrial markets
Employees 3,000+
Revenue US$984 million
Web Site www.microsemi.com
37% reduction in inventory
© 2014 Steelwedge Software, Inc. Confidential.
20% improvement in customer
order fulfillment
Success by the Numbers:
20%
reduction in
manufacturing lead times
Steelwedge Case Study: Extreme Networks
Driving Consistent Growth at Extreme Networks
Challenges
• Outdated & inaccurate planning data • Delayed orders • Long product life cycles • Excess inventory
Solutions
• Enabled executive-sponsored collaboration among S&OP departments • Normalized data in Steelwedge • Determined product sales in near real-time & adjusted accordingly
Results
• Facilitated timely & accurate information through automation • Enabled cross-functional alignment through collaborative planning • Streamlined, end-to-end process: profits up, supply chain cost down • Doubled inventory turns year over year • Created demand-driven, customer-focused, responsive supply chain with
visibility, data, & analytics • Forecast error (MAPE): averaging 31% • Revenue impact less than 1% of revenue
“A global, collaborative and
integrated S&OP process,
along with the internal and
external alignment of demand
and supply, have resulted in
revenue growth and increased
profitability for Extreme
Networks.”
Jack Lyon
Vice President, Supply Chain
Extreme Networks
Company Extreme Networks
Headquarters San Jose, CA USA
Industry High Tech
Products and Services Provides high performance,
open networking innovations for
enterprises, hosting companies
and Internet Exchange Points
Customers More than 6,000 in more than
50 countries
Revenue US$600 million
Web Site www.extremenetworks.com
2x inventory turns
(Year over Year) © 2014 Steelwedge Software, Inc. Confidential.
97%+ customer fulfillment
(ATP)
20% increase in new
customers
Success by the Numbers:
Steelwedge Case Study: Contech
Increasing Demand Planning Visibility at Contech
Challenges
• Unpredictable pricing and access to raw materials like steel and aluminum
• Lack of centralized team approach and consistency throughout the organization (ex: multiple demand plans and fragmented systems)
• Lack of ability to respond to marketplace changes with agility
Solutions
• United the plethora of distributed system data into one cloud-based system for easy integration and access
• Created a centralized view of the demand plan • Facilitated the management of forecast, statistical forecast, historical
data, and future quotes that inform a single demand plan, and collected and rationalized all of this information in Steelwedge
Results
• Improved ability to project inventory & impact on financial model • Improved visibility & reporting with process-driven communication &
collaboration • Leveraged “what-if” modeling to explore a myriad of business scenarios
and improve decision-making
“There’s no doubt we’ve got
payback. And it isn’t just
about discrete financial
metrics. There are numerous
opportunities we wouldn’t
have been able to go after.
We wouldn’t have been fast
enough, integrated enough,
agile enough to capitalize.
Today we power more
strategic initiatives and grab
more market share from our
competitors.” Randy Ramsey
Director of Supply Chain
Contech
Company Contech
Headquarters West Chester, OH USA
Industry Industrial
Products and Services Site solution products and
services for the civil engineering
industry
Employees 1,000+
Revenue Private
Web Site www.conteches.com
40% decrease in
working capital © 2014 Steelwedge Software, Inc. Confidential.
10% increase in on-time
customer service
18 month forecast visibility
Success by the Numbers:
29 © 2014 Steelwedge Software, Inc. Confidential.
Poll 2: Do Casual Planners Add Value?
A: Yes
B: No
30 © 2014 Steelwedge Software, Inc. Confidential.
Who Owns the “S” in S&OP?
• You Do!
• You have good information out there…
• …But you’ve got to make it easy to get the data
• You need to quickly connect information from the frontlines with
decisions in the boardroom
• Steelwedge Initiatives:
• Sales Pipeline Bridge
• Sales Planning
• Social Supply Chain
31 © 2014 Steelwedge Software, Inc. Confidential.
Q&A
32 © 2014 Steelwedge Software, Inc. Confidential.
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