the road to sales & operations planning · the road to sales & operations planning robert...

Tompkins Supply Chain Leadership Forum | August 31–September 2, 2015 Copyright © 2015 Tompkins Supply Chain Leadership Forum | August 31 – September 2, 2015

Your Supply Chain. The Right Way.

The Road To Sales &

Operations Planning

Robert Machado – MillerCoors

Brewster Smith – Tompkins International

Tompkins Supply Chain Leadership Forum | August 31–September 2, 2015 Copyright © 2015

S&OP Warriors

Driver - Stacy Duda: Manager, Sales & Operations Planning

Champion - Kevin Nitz: Director, Forecasting, Planning & Commercialization

Sponsor - Robert Machado: SVP, Customer Supply Chain

2


S&OP

S&OP:

What & Why

3


Daily Activities of the S&OP Team

4

Regional Demand Collab Calls

Monthly Capacity Review

START

STOP

Supply/Demand Alignment

Production Planning

Pre-Supply Review

TEAM

Financial Reconciliation

Media Investments

Capitol Projects

Inventory Planning

Materials Supply

Supplier Management

Out of Stocks

FGL

Materials Obsolescence

Distributor Communication

GPI

MBO

Sales Call Planning

Project Volume

P&L Balance Sheet

Annual Budget

Business Transformation

There are a huge number of considerations on a daily basis for the S&OP team


Daily Activities of the S&OP Team

5


MillerCoors S&OP Journey: Background

6

Consultants diagnosed

current processes

across 6 SABMiller

Regions globally.

Company-wide interviews were held.

Massive amounts of data captured.

Comprehensive opportunity list aligned with

SABMiller global best practices was developed.

MillerCoors S&OP team gaining ground

though implementation & wins along the way.


MillerCoors S&OP Journey:

Big Bucket Action Plan

7

•Formal venues for Portfolio Review, Demand Review, Supply Review, Pre-S&OP, Exec S&OP

•Clearly documented information flow

Formalization & Ownership

•Less focus on current month

•Concentrate efforts where we have the most control - mid-long term horizon

Rolling Horizon

(3-18mo)

•Clearly define gaps and create action plans to address

•Enforce accountability for closure

•Action oriented, not reporting the news!

Gap analysis & review

•Establish scorecards & KPIs for each step in the process

•Establish S&OP process adherence scorecards

•Discuss metrics during meetings, driving accountability at each stage in the process

Metrics & KPI Review


S&OP

S&OP at

MillerCoors

8


MillerCoors S&OP Overview

• Target gap resolution & communication

• Exception handling

• Supply interruptions

• Performance metrics review

• Driven by CSC with inputs from rest of org

9

Portfolio Review

TEAM (Tactical Evaluation Action/Alignment Meeting)

Demand Review

Supply Review

Pre-S&OP

Executive S&OP

Monthly Current +3-18

Weekly Current to

current +2

Approved

unconstrained

Demand Plan

Committed S&OP Plan

Issue

escalation

Issue

escalation &

monetization

Gap Analysis

KPI/Dashboard Review

Scenario Planning

Action Plans

Monthly and Weekly Key Routines in the S&OP Process


Portfolio Review

What is it? The Portfolio Review is the forum where we align on what products we are going to make and how to shape the portfolio. Not only new items coming into the portfolio, but also the products that will be discontinued from the portfolio.

Who is involved? Sales, Innovations, Marketing, Portfolio Governance, Finance, Supply Chain

What is discussed? Innovation pipeline review, product launch timing & impacts, SKU rationalization, portfolio optimization, financial impacts, after action review

Why it is important? To provide clear direction/prioritization on what we are going to make and execute the portfolio strategy.

What are the challenges? Prioritization and financial implications can be difficult to define, portfolio strategy is not prevalent, easy to get down in the weeds.

10


Demand Review

What is it? The Demand Review is the forum where we align on the current forecast including, risk and opportunities, and set the one number that the rest of the organization will plan to.

Who is involved? Sales, Marketing, Finance, and Forecasting/Demand Planning

What is discussed? Unconstrained demand plan, variances to budget, opportunities, risks, and financial implications

Why it is important? To gain enterprise alignment on the plan and send a unified signal to downstream partners.

What are the challenges? Clearly defining risks/opportunities, hard to focus on a future horizon beyond current year.

11


Supply Review

What is it? The Supply Review is the forum where we align on how we will supply products within our constraints and levers.

Who is involved? Forecasting, Supply Planning, Manufacturing, Engineering, Quality, Procurement, and Finance

What is discussed? Constraints impacting demand, trade offs available, upcoming capability needs, and financial implications

Why it is important? To ensure we can supply the agreed on demand plan.

What are the challenges? Understanding capabilities and capacity across network, balancing service and cost, determination of what capital needs may exist and the financial implications, focusing on a rolling 18 month horizon.

12


Pre-S&OP

What is it? The Pre-S&OP forum is where demand and supply plans are “cashed up” to provide visibility to the financial components of the business.

Who is involved? Finance (Sales, Marketing, PP&A), Forecasting

What is discussed? Financial roll up (P&L), gap closure options, and prep for Exec S&OP

Why it is important? Understanding financial risks or opportunities to plans allows us to address gaps in a timely fashion. Alignment across the functions on the financials provides clarity and accountability of the results in Exec S&OP.

What are the challenges? Focus is currently on Sales & Marketing opportunities with less emphasis on supply chain, looking at a further out horizon.

13


Executive S&OP

What is it? The Executive S&OP forum is where we close out the process and provide approval and/or follow up to the enterprise plan that was created through the previous forums.

Who is involved? Senior Leadership team from Sales, Marketing, Finance, Operations, and CEO

What is discussed? Business performance, major decisions made during process or need to be escalated, gaps to plan (volume and financials), and adjustments/approval of the proposed plan.

Why it is important? Ensures top level alignment to the plans that the organization will execute and drives accountability from the bottom up and the top down.

What are the challenges? Scheduling of participants, balance of details vs. high level, defining what items are for decision and what is an inform, focusing on a longer term horizon.

14


S&OP Content & Contributors

The monthly S&OP process consists of 5 standard routines involving the highest

level leadership and provides business direction for underlying planning activities

15

Demand Review Supply Review Pre-S&OP Executive S&OP Portfolio Review

OpCom

Innovation – David Kroll

Brand – Gannon Jones

Sales Ops – Jim Kanter

CSC – Robert Machado

START – Brian Treinen

Demand – Kevin Nitz

S&OP – Stacy Duda

Sales – Ed McBrien


Revenue Mgmt – TBD

Finance – Bob McCann,

Jim Meier


Marketing – Andy England

T&B – Scott Whitley

S&OP - Stacy Duda

Engineering –Deon Van As

Manufacturing – Colleen

Reiter

Demand Planning – Kevin

Nitz

Quality – David Ryder


Procurement – Jim Sheehy

Finance – Jeff Morgan

S&OP – Stacy Duda

Finance – Greg Tierney

Finance – Jim Meier

Finance – Bob McCann

Finance – Mike Sikorski


S&OP – Stacy Duda

OpCom - SLT

Marketing Finance – Jim

Meier

Sales Finance – Bob

McCann




S&OP – Stacy Duda

Who

Innovation pipeline

review

Product launch timing

& impacts

SKU Rationalization

Portfolio Optimization

Cost of complexity

AAR

National roll up of

collaboration calls

Unconstrained volume

plans

Gaps understood

Financial implications

understood

Capacity and resource

constraint review

Supply issues

resolved using

established levers

Cash up the plan

Review financial

forecast & resolve

gaps/constraints

Review risks

Understand P&L roll

up

Align on plan Acknowledge financial

implications of plan Decide on risk

mitigation or opportunity exploitation

Understand gap closure needs with follow up & next steps

What

Align on what we are

going to make

Align on how much we will

make

Align on how & where we

will make it

Cash up the plan and

align on gap

closure activities

Final alignment on volume, gap closure &

opportunities Purpose

START

STOP

Commercial

Connection

Regional Collab Calls

Pre-Supply Review

Supply/Demand

Alignment Review

Capacity Management

Process

Weekly tactical supply

meetings

Monthly Financial LE Monthly S&OP roll up

OpCom Inputs


S&OP Implementation Progress

16


S&OP

Output

of the

Process

17


S&OP Process Adherence Checklist

18

Company: MillerCoors

Period: May-15

Average ( not weighted) 2.60

# Checklist Category Checklist Rate (1-3) Comments

1.0 Portfolio Review Meeting May 4, 2015 Meeting Average: 2.71

1.1 Preparation Was a pre-read sent minimum 24hrs prior to the meeting? 3

1.2 Participation Did all key participants attend the meeting? 2 No T&B representation

1.3 Actions/decisions Were open actions and decisions required adequately followed-up? 3

1.4 Performance review Was market performance reported and reviewed as needed? 2 Reviewed current performance/Dashboard stil l needed

1.5 Horizon coverage Was the medium-longer term innovation pipeline adequately reviewed? 3 Focus on early 2016

1.6 Key inputs Were portfolio risks adequately vetted prior to discussion 3

1.7 Key outputs Was the portfolio validated (at required level) and decisions minuted? 3

2.0 Demand Review Meeting May 7, 2015 Meeting Average: 2.86


2.2 Participation Did all key participants attend the meeting? 3 All key attendees were represented


2.4 Performance review Was DP performance reported and reviewed? 3 DP metrics, no sales or marketing

2.5 Horizon coverage Was the medium-longer term Demand Plan adequately reviewed? 2 More focus on short term

2.6 Key inputs Was the Demand Plan up to date and informed by all relevant inputs and monetized? 3

2.7 Key outputs Was the DP validated (at required level) and decisions minuted? 3

3.0 Supply Review Meeting May 18, 2015 Meeting Average: 2.43

3.1 Preparation Was a pre-read sent minimum 24hrs prior to the meeting? 2 Sent day before, but not prior to 2PM CT

3.2 Participation Did all key participants attend the meeting? 2 No BP&S representation


3.4 Performance review Was E2E Supply performance reported and reviewed? 3 Some supply metrics reviewed - not E2E

3.5 Horizon coverage Was the medium-longer term E2E Supply Plan adequately reviewed? 2 Not tactical, but not roll ing 18

3.6 Key inputs Was the E2E Supply Plan up to date and informed by all relevant inputs & monetized? 2 ISC financials included

3.7 Key outputs Was the SP validated (at required level) and decisions minuted? 3

4.0 Pre-S&OP May 22, 2015 Meeting Average: 2.43

4.1 Preparation Was a pre-read sent minimum 24hrs prior to the meeting? 2 Sent day before, but not prior to 2PM CT

4.2 Participation Did all key participants attend the meeting? 3


4.4 Performance review Were the financial impact of DP and E2E SP reviewed? 2 Demand only

4.5 Horizon coverage Were the financial impact of possible scenarios reviewed? 2 Demand only

4.6 Key inputs Was the E2E Demand/Supply Plan monetized by up to date inputs? 2 Demand only

4.7 Key outputs Was the DP/E2E SP or related options selected for Exec S&OP? 3

5.0 Exec S&OP June 1, 2015 Meeting Average: 2.57


5.2 Participation Did all key participants attend the meeting? 3


5.4 Performance review Was E2E SC performance reported and reviewed? 2 Introduced metrics dashboard

5.5 Horizon coverage Were the medium-longer term Demand/Supply Plans adequately reviewed? 2 Minimal supply

5.6 Key inputs Were Demand/Supply Plans up to date and informed by all relevant inputs? 3


Executive S&OP Monthly Highlights:

May 2015

19

Portfolio Review

Key Decisions & Takeaways

Key Follow Ups

Attendees

Demand Review Supply Review Pre-S&OP Exec S&OP

Redd’s 8oz PR can

approved

Approved capital request

to support additional

stubby bottle capacity in

Golden

Aligned on current LE and

risk picture

Agreed on additional

Redd’s risk

None this month Outlined media spend

picture for review in Exec

S&OP

Aligned on updated EBITA

gap for review in Exec

S&OP

Current plan approved

Agreed to re-allocate

$13.9M in marketing

spend to NFL in T3 to

combat ALL risk in back

half of year

Blue Moon White IPA: -

decision point on capital

for extra tanks needed this

fall

Review marketing

reallocation opportunities

to mitigate Miller Lite risk

Update /decision required

on Shenandoah inventory

contingency planning in

upcoming Supply Review

Put together 18 mo pint

view to start collaboration

with commercial teams on

promotional activity in

2016

None this month Revisit gap closure

activities after May results

are in

Jim Kanter, Brian Treinen,

David Kroll, Gannon Jones,

Andy England, Ed McBrien,

Kevin Doyle, Tracey Joubert,

Jim Meier, Fernando Palacios,

Robert Machado, Stacy Duda,

Allison Ball

Scott Whitley, David Kroll, Ed

McBrien, Gannon Jones, Jim

Meier, Stacy Duda

Matt Williams, Jim Sheehy,

Jason Davis, Kevin Nitz, Jeff

Morgan, Colleen Reiter, Deon

Van As, Jeff Lahl, Stacy

Duda, Kelli Colligan, Robert

Machado

Kevin Nitz, Jim Meier, Greg

Tierney, Bob McCann, Mike

Sikorski, Stacy Duda

Andy England, Fernando

Palacios, Robert Machado,

Kevin Nitz, Bob McCann,

Gannon Jones, Gavin

Hattersley, Jim Meier, Scott

Whitley, Tracey Joubert, Kevin

Doyle, Stacy Duda

Monthly Process Monitor

Overall 2.71 Overall 2.86 Overall 2.43 Overall 2.43 Overall 2.57

Preparation 3 Preparation 3 Preparation 2 Preparation 2 Preparation 3

Participation 2 Participation 3 Participation 2 Participation 3 Participation 3

Actions/decisions 3 Actions/decisions 3 Actions/decisions 3 Actions/decisions 3 Actions/decisions 3

Performance review 2 Performance review 3 Performance review 3 Performance review 2 Performance review 2

Horizon coverage 3 Horizon coverage 2 Horizon coverage 2 Horizon coverage 2 Horizon coverage 2

Key inputs 3 Key inputs 3 Key inputs 2 Key inputs 2 Key inputs 3

Key outputs 3 Key outputs 3 Key outputs 3 Key outputs 3 Key outputs 2


S&OP

How Will We

Measure Success

20


S&OP Maturity Assessment Results –

Between Stages 2 and 3

21

Stage 1: (Lagging) Stage 2: (Defined) Stage 3 (Advanced) Stage 4 (Leading)

Opportunity areas include increased focus on longer

term horizon and adoption as “how we do work”

Lower score largely due to lack of

KPIs and fragmented MRP

Increased presence, review and accountability

of KPIs needed to improve this process

Strong analytical techniques

& tools drive solid score.

Portfolio review and

commercial involvement in

forecast will continue to

increase this score

Driven by focus on process

implementation in 1st half of

2014 and active involvement

by Finance teams

Driven by adoption of

advanced tools such as SAS

and SAP. BT will continue to

drive improvement.

Career development, focused

Supply/Demand planning

recruitment and increased

cross-functional teamwork

will drive the people process


Macro Themes –

2015 Maturity Assessment Target

22

Strategy /S&OP

Awareness

Process, scope and governance

Rolling 18 months

Demand

NPD forecasting improvements

Increased commercial integration

Rolling 18 months

Supply

Monetization

Planning integration (Project EASE)

Formalize KPIs

Rolling 18 months

Performance management

Define and utilize performance metrics across

monthly meetings

Utilize enhancements to the assessment tool


The Road To Sales & Operations Planning

Discussion

23

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