strategies for making the most of sap technology that supports sales and operations planning...
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866.P4D.INFO | Plan4Demand.com | [email protected] Presentation from SAP Insider SCM 2012 Conference, March 19TH Orlando, Florida. The session, titled “Strategies for making the most of SAP technology that supports sales and operations planning (S&OP),” offers attendees expert advice, strategies, and technology guidance to increase efficiency in the S&OP process. McCall and Cecere provide a critical overview of the evolving and changing S&OP maturity model for today's supply chain, examine a realistic approach to evaluate an organizations’ S&OP maturity level, and reveal tips for overcoming obstacles and achieving positive results. “We feel privileged to be recognized by the SAP conference planning committee as an expert in the field of business forecasting and planning. Collaborating with Lora Cecere is a great opportunity and our presentation is packed with analysis of current S&OP models, as well as advice on how to improve upon those models and increase a business’s S&OP process efficiency,” stated McCall. “It seems that 95% of companies are unclear how to use their SAP solutions for S&OP,” said Cecere. “It starts with answering three basic questions and then applying the answers to these questions to a roadmap. Andrew, and I are partnering together to unveil these insights at SAP Insider.”TRANSCRIPT
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Strategies for making the most of
SAP technology
that supports
Sales and Operations Planning
(S&OP)
March 19th, 2012
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Introduction
Goals For This Session
S&OP – An Evolving Process Model
Bringing the Maturity Model & Technology Together
The Bottom Line
Questions & Comments
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Provide an overview of the evolving and changing S&OP maturity
model for today's supply chain, and understand how it differs from
general models of the past.
Examine an evaluation of your organization's S&OP maturity level.
See which elements of SAP match specific levels of maturity of your
S&OP process – allowing you to develop the technology portion of
your S&OP roadmap
Gain insights that will help you determine if additional SAP technology
investments are in order
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A Look at History
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Process Evolution
&
Enabling Technologies
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Align
Resilient Reliable
Adapt
Efficient
Building Horizontal Connector
Continuous Testing
Learning Improving
Orchestrate
Sense Demand
and Supply
Shape Demand and Supply based
on Market
Demand Volatility
Supply Volatility
Right Product
Right Place
Right Time
Right Cost
Cost
Procure to pay/order to
cash
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Stage 1: Characteristics
Discussion: What is the most feasible plan?
Technologies: Constraint-based planning with a focus on volume.
Decision: Trade-offs between deliver and make to meet a fixed sales
plan.
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Goal:
A feasible plan • Model the network
• Recognize and respect constraints
• Gain plan visibility
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Demand Planning Supply Planning
Key:
Processes Enabled Enabling Technology
• Statistical Demand Forecasting
• Supply Planning
• Production Planning & Scheduling
• SCM: Demand Planning
• SCM: Basic Supply Network Planning
• ECC: Production Planning
• BO: Reporting & Analytics to Support KPI’s
Key Technology Points
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Stage 2 Characteristics: Discussion: What is the right trade-off between go-to-market
strategies and supply chain capabilities (usually make and
deliver)?
Technologies: Advanced planning solutions with a focus on
volume. Increased needs for what-if analysis for both demand and
supply.
Decision: Trade-offs between go to market plans and supply
chain design.
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What benefits have you received from your work with S&OP processes?
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Inventory Planning
Goal:
A Feasible plan • Model the network
• Recognize and respect constraints
• Gain plan visibility
Match Demand with Supply
• What-if analysis
• Multi-tier inventory analysis
• Network design
Demand Planning Supply Planning
Key:
Processes Enabled Enabling Technology
• Statistical Demand Forecasting
• Supply Planning
• Inventory Planning
• Production Planning & Scheduling
• Network Validation & Rationalization
• Scenario Management
• SCM: Demand Planning
• SCM: Advanced Supply Network Planning
• SCM: PP/DS
• Smart Ops: Multi Echelon Inventory Planning
• SCM: Supply Chain Analytics
• SCM: Strategic Supply Chain Design
Key Technology Points
Demand Translation Platform
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Level
Form Function
Raw Material Cycle Stock
Semi-finished Product Forward coverage of Events:
Promotions, New Product Launch, etc.
Finished Product Safety Stock
Finished Product in the Channel Seasonal Stock
SLOB: Slow and Obsolete
Form & Function
How much?
Where?
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What is the right form?
What is the right function for
inventory to play in the supply
chain?
Inventory Definitions:
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Network Design: What is the role of inventory in our network design?
Inventory Configuration: What is the right Form & Function of
Inventory?
Inventory Policy: What is the Right Level of inventory?
Make Service Sell Source Deliver
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Stage 3 Characteristics: Discussion: What is the right trade-off between
go-to-market strategies and supply chain
capabilities to improve profitability? Mitigate
risk?
Technologies: Advanced planning solutions
combined with financial modeling and inventory
optimization with a focus on profitability. Need
for a demand translation platform.
Decision: Trade-offs between go to market
plans and supply chain design to maximize
profitability.
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Increasing levels of
granularity
Increasing need for
value network strategy
alignment
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Letter Stage 1-2 Stage 3-5
S Ask sales Focus on market drivers:
How do we best shape demand?
& Direct integration to supply
Design of the value chain to
optimize trade-offs, minimize risk,
balance cycles, and orchestrate
demand
OP Manufacturing plan Trade-offs between make, source
and deliver
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Demand Translation Platform Financial Planning Inventory Planning
Goal:
A Feasible plan • Model the network
• Recognize and respect constraints
• Gain plan visibility
Match Demand with Supply
• What-if analysis
• Multi-tier inventory analysis
• Network design
Deliver the most
Profitable Plan
• Demand translation
• Supply orchestration
• Optimize financial drivers
Supply Planning
Key:
Demand Planning
Processes Enabled Enabling Technology
• Financial Impact Analysis
• Business Planning & Consolidation
• Consensus Demand Planning
• Capacity Planning
• SAP BO: S&OP Tools
• SAP BO: Financial Analytics & Scenarios
• Business Analytics: Asset Analytics
Key Technology Points
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Stage 4 Characteristics:
Discussion: How do we shorten the time to
sense market changes to make the right trade-off
between go-to-market strategies and supply
chain capabilities to improve profitability and
mitigate risk?
Technologies: Advanced planning solutions
combined with financial modeling and inventory
optimization, plus demand sensing with a focus
on profitability. Need for a demand translation
platform and S&OP execution capabilities.
Decision: Trade-offs between go-to-market
plans and supply chain design to maximize
profitability.
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Demand Shaping includes:
• New product launch
• Price management
• Trade promotion
• Sales incentives
• Marketing programs
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To Sense and Shape Demand to
Drive a Profitable Response
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Market Sensing Demand Translation Platform Financial Planning Inventory Planning Supply Planning
Key:
Demand Planning
Goal:
A Feasible plan • Model the network
• Recognize and respect constraints
• Gain plan visibility
Match Demand with Supply
• What-if analysis
• Multi-tier inventory analysis
• Network design
Deliver the most Profitable
Plan
• Demand translation
• Supply orchestration
• Optimize financial drivers
Demand Driven
• Sense channel demand
• Shape demand
• Drive the most profitable response
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Goal:
Demand Driven
• Sense channel demand
• Shape demand
• Drive the most profitable response
Market Sensing Demand Translation Platform Financial Planning Inventory Planning Supply Planning
Key:
Demand Planning
Processes Enabled Enabling Technology
• Demand Sensing
• Demand Shaping
• Profitability Management
• Demand Sensing
• Trade & Promotion Management
• Business Analytics: Asset Analytics
• Business Objects: Dashboards
Key Technology Points
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An adaptive network focused on driving value-based
outcomes by sensing and translating market changes
(buy and sell-side markets) bi-directionally with near-real
time data latency to align, sell, deliver, make, and
sourcing operations.
A horizontal process to sense and optimize from market to
market.
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Goal:
A Feasible plan • Model the network
• Recognize and respect constraints
• Gain plan visibility
Match Demand with Supply
• What-if analysis
• Multi-tier inventory analysis
• Network design
Deliver the most Profitable
Plan
• Demand translation
• Supply orchestration
• Optimize financial drivers
Demand Driven
• Sense channel demand
• Shape demand
• Drive the most profitable response
Market-driven
• Sense buy and sell-side market
conditions
• Bi-directionally orchestrate demand
Market Sensing Demand Translation Platform Financial Planning Inventory Planning Supply Planning
Key:
Demand Planning
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Goal:
Market-driven
• Sense buy and sell-side market
conditions
• Bi-directionally orchestrate demand
Market Sensing Demand Translation Platform Financial Planning Inventory Planning Supply Planning
Key:
Demand Planning
Processes Enabled Enabling Technology
• Supply and Demand Collaboration
• Variability Management
• End to End Planning
• SCM: Distribution & Supply Network Collaboration
• Business Analytics: Supplier InfoNet
Key Technology Points
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Where are you on your journey?
Buy technology with the Goal in mind
S&OP process definition is changing.
Are your technologies aligned to support the change?
To meet Today’s needs, we need to change
Supply Chain Paradigms.…
Are You Up to the
Challenge??
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