J im Biel, Ph: 847.687.5379, E-Mail: [email protected], http://www.linkedin.com/in/jimbiel (April 19, 2011)
Sales & Operations Planning & Analysis 2011
Sales & Operations Alignment
Tuesday, April 19, 2011
Hotel “ W” City Center
Chicago, IL
Jim Biel
Management Consultant
E-Mail: [email protected]
Phone: 847.687.5379
http://www.linkedin.com/in/jimbiel
1
J im Biel, Ph: 847.687.5379, E-Mail: [email protected], http://www.linkedin.com/in/jimbiel (April 19, 2011)
Who I Am – J im Biel
• 20 Years Multi-Functional Experience, Concentrated in CPG Industry (Sara
Lee, Unilever, Chiquita, Pepsi) – Retail & B-to-B
• Experience in Business Forecasting, Sales Operations & Planning, S&OP,
Sales Systems, ERP, CRM, Demand Planning, Business Information
Management, Supply Chain, Trade Promotion Management, IT, HR,
Training & Development, and Finance (Corporate & Public Accounting, CPA)
• Core understanding of multiple supply chains – frozen, fresh, cold, dry,
liquid
• Independent Management Consulting for large and small entities
• Client Services position with a SaaS (software as a service) provider of
trade promotion software (Adesso Solutions)
• Practiced public accounting for 4+ years – McGladrey; Corporate Finance
FP&A Roles
• Adept at integrating relevant business concepts and processes with
enterprise-wide systems, a strong business process understanding and
acumen including S&OP (boot strap and retrofit S&OP implementations)
2
J im Biel, Ph: 847.687.5379, E-Mail: [email protected], http://www.linkedin.com/in/jimbiel (April 19, 2011)
Polling the Room
• Function
• Industry
• Interest
• Experience with S&OP
• Desired Outcome with S&OP
• Your Burning Question About
S&OP Alignment
3
J im Biel, Ph: 847.687.5379, E-Mail: [email protected], http://www.linkedin.com/in/jimbiel (April 19, 2011)
Presentation Flow
• Presentation of Concepts
• Interactive As We Go – Brief Discussion / QA – Concept
by Concept – Share What We All Know
• Fuller QA at End
• Welcome / Encourage Contact After Presentation – E-
Mail, Phone, LinkedIn (Take a Business Card)
• Will Be Available After to Talk 1-on-1
• Lunch
• Presentation Available – E-Mail Me and Posted to My
LinkedIn Profile
4
J im Biel, Ph: 847.687.5379, E-Mail: [email protected], http://www.linkedin.com/in/jimbiel (April 19, 2011)
Overview of Discussion Topics
• Results Through Integration & Performance
Management
• Cross Functional Alignment Through Effective
Communication
• Accountability Systems For Internal
Stakeholders
• Alignment Between Corporate Strategy and
Operational Execution
• Methodological Approach Measuring, Managing,
and Executing Strategies
5
J im Biel, Ph: 847.687.5379, E-Mail: [email protected], http://www.linkedin.com/in/jimbiel (April 19, 2011)
Closing Remarks
(Now & Later, Too)
• Key Learnings From My Experience
– The Concept is Easy
– The Initial Buy-In is Fairly Easy
– The Change Mgt Required Can Be Hard
• New Process
• New Technologies / Systems
• New Accountabilities / Roles
• Traditional Functional Ownership Dies Hard – Silos
• Transparency Hard For Some to Swallow
– Consistency & Month-to-Month Execution is Hard
– Leader Needs to Keep Functional Leads Feet to the Fire
– May Need a Process Coach
6
J im Biel, Ph: 847.687.5379, E-Mail: [email protected], http://www.linkedin.com/in/jimbiel (April 19, 2011)
“ Connecting the Knobs”
(Why Integration is Important)
• “Before we had Executive S&OP in the
Company, I Spent A Lot of Time Turning
Knobs That Weren’t Connected To
Anything”
– VP & GM Quote From Tom Wallace’s Book,
Sales & Operations Planning, The Executive’s Guide
Page 24
7
J im Biel, Ph: 847.687.5379, E-Mail: [email protected], http://www.linkedin.com/in/jimbiel (April 19, 2011)
Alignment/Integration Defined
• One Integrated Process (Process)
• People/Functional Alignment (People)
• One Common Set of Metrics (Performance)
• One System of Record (Platform)
• All Demand Streams (Demand Supply)
• Integrate All Available Data (Internal & External)
• One Forecast (Used by All Functions * )
• An Integrated Business Management Model
• Buy-In, Accountability, & Trust
• Transparency
* With Some Caveats
8
J im Biel, Ph: 847.687.5379, E-Mail: [email protected], http://www.linkedin.com/in/jimbiel (April 19, 2011)
One Forecast Caveat
(Linkage – S&OP to Other Plans)
Latest
Est / Frcst
S&OP
Business
Plan
Demand
Plan
Supply
Plan
Financial
Strategic
Target /
Intent
Strategic
Plan
Demand
Plan
Supply
Plan
Financial
Annual
Plan
Demand
Plan
Supply
Plan
Financial
Interim
Forecasts
Future
Execution
/ Forecast
Financial
Supply
Plan
Demand
Plan
Use S&OP
As a Gut
Check
Use S&OP
As Key
Input / Core,
Plus Risks/Ops
Use S&OP
As Key
Input / Core,
Plus Risks/Ops
Future Execution
Forecast / Details,
Active Risk / Ops
Discussion
S&OP Outputs Validate, Supports Other Planning Processes
9
J im Biel, Ph: 847.687.5379, E-Mail: [email protected], http://www.linkedin.com/in/jimbiel (April 19, 2011)
Results Through Integration & Performance Management
• Desired Results
– Positive P&L Impact
• Increased Revenue
• Reduction / Stabilization of Costs
• Supply Chain Conversion Costs
• Procurement Costs & Efficiencies
– Working Capital Management
• Inventory: Finished, Raw Materials (Cash is King)
– Productivity / Value with Process
• Planning / Forecasting Processes
• New Product Launches (Cycle Time, Success)
– Decision Making Improvements
• Speed
• Quality
• Integration
– Various Functions: Leadership -Demand -Supply -Finance
– Integrated, Consistent, Efficient Forecasting & Management Process
• Performance Management
– P& L Targets
– Working Capital Targets (Forecast Accuracy Drives Inventory Levels)
– Service Level Targets
– Productivity Improvements
– Decision Making Improvements
10
J im Biel, Ph: 847.687.5379, E-Mail: [email protected], http://www.linkedin.com/in/jimbiel (April 19, 2011)
Connection – Integration, Performance
Management (Metrics), Results
INTEGRATION
Leadership
(Strategic Direction)
Demand Feeds
Supply; Balancing
(Ops Execution, Future Forecast)
Finance
($ Scorekeeper, Forward Looking
Economic Advisor)
Leadership
(S&OP Process Owner)
DESIRED RESULTS
Positive P&L Outcomes
Positive Working Capital Outcomes
Productivity Improvements
Decision Making Improvements
Customer Service Levels
PERFORMANCE METRICS
Revenue, Cost Targets
Forecast Accuracy
Working Capital Targets
New Product Launch Success
Cycle Time / Quality - Processes
Service Level Targets
11
J im Biel, Ph: 847.687.5379, E-Mail: [email protected], http://www.linkedin.com/in/jimbiel (April 19, 2011)
Cross Functional Alignment / Effective
Communication
Provides P&L
Proformas & Risk /
Opportunity
Assessment
Counsel, Input, Risk
Assessment, Pro-
Formas of Future
Forecasts
Economic Oversight /
Counsel
Finance
Daily, Weekly
Interaction with
Demand & Finance;
Owns Monthly Supply
Component of S&OP
Owns the Fulfillment of
the Demand Forecast
at Least Cost
(Balancing with
Demand Planning)
Demand Fulfillment,
Least Cost
Supply
> Finished
> Raw
Daily, Weekly
Interaction with Supply
& Finance; Owns
Monthly Demand
Component of S&OP
Owns the Demand
Forecast; Accountable
for Excess Inventory
Generated by a
Forecast Miss
Translates Strategy into
Demand Generation;
Dem Planning Reports
to a Demand Leader;
Unconstrained Demand
Demand
> Sales
> Marketing
Owns Monthly S&OP
Meeting; Consulted
Daily/Weekly as
Needed (Exception)
Owns the Overall
Process – The Process
Owner
Strategic Direction General Manager
Communication S&OP Role Business Role Functional Role
12
J im Biel, Ph: 847.687.5379, E-Mail: [email protected], http://www.linkedin.com/in/jimbiel (April 19, 2011)
Cross Functional Alignment / Effective
Communication – The S&OP Flow
Demand
Supply
Daily
Weekly
Monthly
Balancing
Finance
Generates
Proformas,
Cost, Risk /
Ops Monthly;
As Needed In
Interim
Utilize Demand
Outputs as Basis
For Forecasts,
Annual Plans,
Strategic Plans,
Add Risks / Opps /
Other Lifts /
Discount Factors
As Needed
GM
Controls Monthly
S&OP
+Results
+Metrics Review
+Var to Bus Pl
+Future Frcst
+Assumptions
+Bulk of Meeting:
Gaps, Opps in
Future Frcst
+ Create Business Rules (Between Demand/Supply)
+ Forecast Time Fence: Rolling 12-24-36 Months
+ Functional Leads & Leader Participate in Monthly S&OP Review
13
J im Biel, Ph: 847.687.5379, E-Mail: [email protected], http://www.linkedin.com/in/jimbiel (April 19, 2011)
Cross Functional Alignment / Effective
Communication – The S&OP Communication Flow
Owns Financial
Component
Consulted As
Needed
Consulted As
Needed
Finance
Owns Supply
Component
Active w/
Demand
Planning
Active w/
Demand
Planning
Supply Planning
Owns Demand
Component
Active w/ Supply
Planning; Sales;
Marketing;
Customers
Active w/ Supply
Planning; Sales;
Marketing;
Customers
Demand
Planning
Owns the
Meeting
Rarely Rarely GM
Monthly Weekly Daily Role
14
J im Biel, Ph: 847.687.5379, E-Mail: [email protected], http://www.linkedin.com/in/jimbiel (April 19, 2011)
Accountability Systems For Internal Stakeholders
• Metrics – Common
– 5 Basic Metrics:
• Forecast Accuracy (Demand Owner)
• Perfect Orders (Cust Serv, Supply)
• Revenue (Units & Mix)
• Profitability (Mix, Margins, Costs)
• Inventory (Demand Owner + Supply Owner)
– Simple Scorecard
– Improvement From a Baseline
• Active Involvement By All Functions –
– Accountability & Roles / Responsibilities
• Daily
• Weekly
• Monthly (Decisions Made + Follow-Up Assigned)
• Transparency Through Dynamic
Communication Flow
15
J im Biel, Ph: 847.687.5379, E-Mail: [email protected], http://www.linkedin.com/in/jimbiel (April 19, 2011)
Alignment Between Corporate Strategy and
Operational Execution
Revenue Targets
Margins
Working Capital
New Products
New Markets
New Customers
New Channels
Exit Strategies
Capital Investment
Corporate Strategy Business Plan S&OP
Revenue Targets
Margins
Working Capital
New Products
New Markets
New Customers
New Channels
Exit Strategies
Capital Investment
Revenue Targets
Margins
Working Capital
New Products
New Markets
New Customers
New Channels
Exit Strategies
Capital Investment
Strategic Intent 3-5 Yrs Annual Plan / Frcsts Rolling 36 Mo Review
Amount of Detail (Increases through various processes)
> Working Backwards from S&OP, Provides Validation of Plan & Strategy
> S&OP Focuses on Gap / Opportunity Assessment vs. Plan
16
J im Biel, Ph: 847.687.5379, E-Mail: [email protected], http://www.linkedin.com/in/jimbiel (April 19, 2011)
Methodological Approach Measuring, Managing, Executing Strategies
S&OP Meeting:
Metrics
Best Frcst
Assumptions
New Products
Gaps / Opps
Strategic Issues
P&L Proforma
with Gaps /
Opps; Risks
Demand to
Supply; Supply
Back to
Demand;
Finance P&L w/
Risks / Opps
+ Demand Pre-
Meeting
+ Supply Pre-
Meeting
+ Capacitization
Monthly
If Needed, very
rare
When needed,
exception
basis
Same as
Above
Demand
Planning:
+ Same as
Above
Weekly
If Needed, very
rare
When needed,
exception
basis
Dem Pl with
System &
Sources;
Dem Pl w/
Supply –
Balancing
Supply Metrics
Demand
Planning:
+ Dem Planners
+ Sales
+ Marketing
+ Customers
+ Synd Data
Daily
GM Finance Typical
Interactions
Activity Frequency
17
J im Biel, Ph: 847.687.5379, E-Mail: [email protected], http://www.linkedin.com/in/jimbiel (April 19, 2011)
Methodological Approach Measuring, Managing, Executing Strategies
S&OP Time Fences
Short-Term
(1-3 Months)
Mid-Term
(4-12 Months)
Long-Term
(13-36 Months)
Demand
Dem Pl – SKUs
All Demand Streams
Sales
Customers
Promotions
New Products
Supply
Fulfillment
Cust Serv
Finished Goods
Supply Contracts
Demand
Dem Pl – Prod Fam
All Demand Streams
Marketing
Customers
Promotions
New Products
Supply
Fulfillment
Finished Gds, Raw
Supply Contracts
Demand - Strategy
Dem Pl – Prod Fam
All Demand Streams
Marketing
Customers
Promotions
New Products
Supply - Strategy
Fulfillment & Sourcing
Ingred Contracts
Plant/Cap Network/Invest
18
J im Biel, Ph: 847.687.5379, E-Mail: [email protected], http://www.linkedin.com/in/jimbiel (April 19, 2011)
Methodological Approach Measuring, Managing, Executing Strategies
Tool Box Needed to Execute
Systems of Record & Collaboration Tools
- ERP System
- Spreadsheets
- Collaboration Tools
- Purpose Built S&OP System Capability (i.e. SteelWedge)
- Metrics Scorecard Capability
Need a well thought-out and efficient S&OP Reporting Tool
to support Meetings and interactions
> Numbers
> Metrics Reporting
> Assumptions
Make your analysts “ analysts” – not data and report generators
19
J im Biel, Ph: 847.687.5379, E-Mail: [email protected], http://www.linkedin.com/in/jimbiel (April 19, 2011)
Alignment/Integration Defined
• One Integrated Process (Process)
• People/Functional Alignment (People)
• One Common Set of Metrics (Performance)
• One System of Record (Platform)
• All Demand Streams (Demand Supply)
• Integrate All Available Data (Internal & External)
• One Forecast (Used by All Functions * )
• An Integrated Business Management Model
• Buy-In, Accountability, & Trust
• Transparency
* With Some Caveats
20
J im Biel, Ph: 847.687.5379, E-Mail: [email protected], http://www.linkedin.com/in/jimbiel (April 19, 2011)
Closing Remarks
• Key Learnings From My Experience
– The Concept is Easy
– The Initial Buy-In is Fairly Easy
– The Change Mgt Required Can Be Hard
• New Process
• New Technologies / Systems
• New Accountabilities / Roles
• Traditional Functional Ownership Dies Hard – Silos
• Transparency Hard For Some to Swallow
– Consistency & Month-to-Month Execution is Hard
– Leader Needs to Keep Functional Leads Feet to the Fire
– May Need a Process Coach
21
J im Biel, Ph: 847.687.5379, E-Mail: [email protected], http://www.linkedin.com/in/jimbiel (April 19, 2011)
Resources
• A Book: Sales & Operations Planning, The
Executive’s Guide, Thomas Wallace & Robert
A. Stahl
• “ Sales & Operations Planning:
Transformation From Tradition” White Paper,
AMR Research, May, 2009
• “ The Transformation to Demand-Driven
Industry Leader” White Paper,
Oracle/Demantra, September, 2006
22
J im Biel, Ph: 847.687.5379, E-Mail: [email protected], http://www.linkedin.com/in/jimbiel (April 19, 2011)
General QA & Closing
• Please ask now
• Ask After Session
• Or
– Contact Me:
•Cell: 847.687.5379
•E-Mail: [email protected]
•Via LinkedIn: http://www.linkedin.com/in/jimbiel
23
doc_487234482.pdf
Sales & Operations Planning & Analysis 2011
Sales & Operations Alignment
Tuesday, April 19, 2011
Hotel “ W” City Center
Chicago, IL
Jim Biel
Management Consultant
E-Mail: [email protected]
Phone: 847.687.5379
http://www.linkedin.com/in/jimbiel
1
J im Biel, Ph: 847.687.5379, E-Mail: [email protected], http://www.linkedin.com/in/jimbiel (April 19, 2011)
Who I Am – J im Biel
• 20 Years Multi-Functional Experience, Concentrated in CPG Industry (Sara
Lee, Unilever, Chiquita, Pepsi) – Retail & B-to-B
• Experience in Business Forecasting, Sales Operations & Planning, S&OP,
Sales Systems, ERP, CRM, Demand Planning, Business Information
Management, Supply Chain, Trade Promotion Management, IT, HR,
Training & Development, and Finance (Corporate & Public Accounting, CPA)
• Core understanding of multiple supply chains – frozen, fresh, cold, dry,
liquid
• Independent Management Consulting for large and small entities
• Client Services position with a SaaS (software as a service) provider of
trade promotion software (Adesso Solutions)
• Practiced public accounting for 4+ years – McGladrey; Corporate Finance
FP&A Roles
• Adept at integrating relevant business concepts and processes with
enterprise-wide systems, a strong business process understanding and
acumen including S&OP (boot strap and retrofit S&OP implementations)
2
J im Biel, Ph: 847.687.5379, E-Mail: [email protected], http://www.linkedin.com/in/jimbiel (April 19, 2011)
Polling the Room
• Function
• Industry
• Interest
• Experience with S&OP
• Desired Outcome with S&OP
• Your Burning Question About
S&OP Alignment
3
J im Biel, Ph: 847.687.5379, E-Mail: [email protected], http://www.linkedin.com/in/jimbiel (April 19, 2011)
Presentation Flow
• Presentation of Concepts
• Interactive As We Go – Brief Discussion / QA – Concept
by Concept – Share What We All Know
• Fuller QA at End
• Welcome / Encourage Contact After Presentation – E-
Mail, Phone, LinkedIn (Take a Business Card)
• Will Be Available After to Talk 1-on-1
• Lunch
• Presentation Available – E-Mail Me and Posted to My
LinkedIn Profile
4
J im Biel, Ph: 847.687.5379, E-Mail: [email protected], http://www.linkedin.com/in/jimbiel (April 19, 2011)
Overview of Discussion Topics
• Results Through Integration & Performance
Management
• Cross Functional Alignment Through Effective
Communication
• Accountability Systems For Internal
Stakeholders
• Alignment Between Corporate Strategy and
Operational Execution
• Methodological Approach Measuring, Managing,
and Executing Strategies
5
J im Biel, Ph: 847.687.5379, E-Mail: [email protected], http://www.linkedin.com/in/jimbiel (April 19, 2011)
Closing Remarks
(Now & Later, Too)
• Key Learnings From My Experience
– The Concept is Easy
– The Initial Buy-In is Fairly Easy
– The Change Mgt Required Can Be Hard
• New Process
• New Technologies / Systems
• New Accountabilities / Roles
• Traditional Functional Ownership Dies Hard – Silos
• Transparency Hard For Some to Swallow
– Consistency & Month-to-Month Execution is Hard
– Leader Needs to Keep Functional Leads Feet to the Fire
– May Need a Process Coach
6
J im Biel, Ph: 847.687.5379, E-Mail: [email protected], http://www.linkedin.com/in/jimbiel (April 19, 2011)
“ Connecting the Knobs”
(Why Integration is Important)
• “Before we had Executive S&OP in the
Company, I Spent A Lot of Time Turning
Knobs That Weren’t Connected To
Anything”
– VP & GM Quote From Tom Wallace’s Book,
Sales & Operations Planning, The Executive’s Guide
Page 24
7
J im Biel, Ph: 847.687.5379, E-Mail: [email protected], http://www.linkedin.com/in/jimbiel (April 19, 2011)
Alignment/Integration Defined
• One Integrated Process (Process)
• People/Functional Alignment (People)
• One Common Set of Metrics (Performance)
• One System of Record (Platform)
• All Demand Streams (Demand Supply)
• Integrate All Available Data (Internal & External)
• One Forecast (Used by All Functions * )
• An Integrated Business Management Model
• Buy-In, Accountability, & Trust
• Transparency
* With Some Caveats
8
J im Biel, Ph: 847.687.5379, E-Mail: [email protected], http://www.linkedin.com/in/jimbiel (April 19, 2011)
One Forecast Caveat
(Linkage – S&OP to Other Plans)
Latest
Est / Frcst
S&OP
Business
Plan
Demand
Plan
Supply
Plan
Financial
Strategic
Target /
Intent
Strategic
Plan
Demand
Plan
Supply
Plan
Financial
Annual
Plan
Demand
Plan
Supply
Plan
Financial
Interim
Forecasts
Future
Execution
/ Forecast
Financial
Supply
Plan
Demand
Plan
Use S&OP
As a Gut
Check
Use S&OP
As Key
Input / Core,
Plus Risks/Ops
Use S&OP
As Key
Input / Core,
Plus Risks/Ops
Future Execution
Forecast / Details,
Active Risk / Ops
Discussion
S&OP Outputs Validate, Supports Other Planning Processes
9
J im Biel, Ph: 847.687.5379, E-Mail: [email protected], http://www.linkedin.com/in/jimbiel (April 19, 2011)
Results Through Integration & Performance Management
• Desired Results
– Positive P&L Impact
• Increased Revenue
• Reduction / Stabilization of Costs
• Supply Chain Conversion Costs
• Procurement Costs & Efficiencies
– Working Capital Management
• Inventory: Finished, Raw Materials (Cash is King)
– Productivity / Value with Process
• Planning / Forecasting Processes
• New Product Launches (Cycle Time, Success)
– Decision Making Improvements
• Speed
• Quality
• Integration
– Various Functions: Leadership -Demand -Supply -Finance
– Integrated, Consistent, Efficient Forecasting & Management Process
• Performance Management
– P& L Targets
– Working Capital Targets (Forecast Accuracy Drives Inventory Levels)
– Service Level Targets
– Productivity Improvements
– Decision Making Improvements
10
J im Biel, Ph: 847.687.5379, E-Mail: [email protected], http://www.linkedin.com/in/jimbiel (April 19, 2011)
Connection – Integration, Performance
Management (Metrics), Results
INTEGRATION
Leadership
(Strategic Direction)
Demand Feeds
Supply; Balancing
(Ops Execution, Future Forecast)
Finance
($ Scorekeeper, Forward Looking
Economic Advisor)
Leadership
(S&OP Process Owner)
DESIRED RESULTS
Positive P&L Outcomes
Positive Working Capital Outcomes
Productivity Improvements
Decision Making Improvements
Customer Service Levels
PERFORMANCE METRICS
Revenue, Cost Targets
Forecast Accuracy
Working Capital Targets
New Product Launch Success
Cycle Time / Quality - Processes
Service Level Targets
11
J im Biel, Ph: 847.687.5379, E-Mail: [email protected], http://www.linkedin.com/in/jimbiel (April 19, 2011)
Cross Functional Alignment / Effective
Communication
Provides P&L
Proformas & Risk /
Opportunity
Assessment
Counsel, Input, Risk
Assessment, Pro-
Formas of Future
Forecasts
Economic Oversight /
Counsel
Finance
Daily, Weekly
Interaction with
Demand & Finance;
Owns Monthly Supply
Component of S&OP
Owns the Fulfillment of
the Demand Forecast
at Least Cost
(Balancing with
Demand Planning)
Demand Fulfillment,
Least Cost
Supply
> Finished
> Raw
Daily, Weekly
Interaction with Supply
& Finance; Owns
Monthly Demand
Component of S&OP
Owns the Demand
Forecast; Accountable
for Excess Inventory
Generated by a
Forecast Miss
Translates Strategy into
Demand Generation;
Dem Planning Reports
to a Demand Leader;
Unconstrained Demand
Demand
> Sales
> Marketing
Owns Monthly S&OP
Meeting; Consulted
Daily/Weekly as
Needed (Exception)
Owns the Overall
Process – The Process
Owner
Strategic Direction General Manager
Communication S&OP Role Business Role Functional Role
12
J im Biel, Ph: 847.687.5379, E-Mail: [email protected], http://www.linkedin.com/in/jimbiel (April 19, 2011)
Cross Functional Alignment / Effective
Communication – The S&OP Flow
Demand
Supply
Daily
Weekly
Monthly
Balancing
Finance
Generates
Proformas,
Cost, Risk /
Ops Monthly;
As Needed In
Interim
Utilize Demand
Outputs as Basis
For Forecasts,
Annual Plans,
Strategic Plans,
Add Risks / Opps /
Other Lifts /
Discount Factors
As Needed
GM
Controls Monthly
S&OP
+Results
+Metrics Review
+Var to Bus Pl
+Future Frcst
+Assumptions
+Bulk of Meeting:
Gaps, Opps in
Future Frcst
+ Create Business Rules (Between Demand/Supply)
+ Forecast Time Fence: Rolling 12-24-36 Months
+ Functional Leads & Leader Participate in Monthly S&OP Review
13
J im Biel, Ph: 847.687.5379, E-Mail: [email protected], http://www.linkedin.com/in/jimbiel (April 19, 2011)
Cross Functional Alignment / Effective
Communication – The S&OP Communication Flow
Owns Financial
Component
Consulted As
Needed
Consulted As
Needed
Finance
Owns Supply
Component
Active w/
Demand
Planning
Active w/
Demand
Planning
Supply Planning
Owns Demand
Component
Active w/ Supply
Planning; Sales;
Marketing;
Customers
Active w/ Supply
Planning; Sales;
Marketing;
Customers
Demand
Planning
Owns the
Meeting
Rarely Rarely GM
Monthly Weekly Daily Role
14
J im Biel, Ph: 847.687.5379, E-Mail: [email protected], http://www.linkedin.com/in/jimbiel (April 19, 2011)
Accountability Systems For Internal Stakeholders
• Metrics – Common
– 5 Basic Metrics:
• Forecast Accuracy (Demand Owner)
• Perfect Orders (Cust Serv, Supply)
• Revenue (Units & Mix)
• Profitability (Mix, Margins, Costs)
• Inventory (Demand Owner + Supply Owner)
– Simple Scorecard
– Improvement From a Baseline
• Active Involvement By All Functions –
– Accountability & Roles / Responsibilities
• Daily
• Weekly
• Monthly (Decisions Made + Follow-Up Assigned)
• Transparency Through Dynamic
Communication Flow
15
J im Biel, Ph: 847.687.5379, E-Mail: [email protected], http://www.linkedin.com/in/jimbiel (April 19, 2011)
Alignment Between Corporate Strategy and
Operational Execution
Revenue Targets
Margins
Working Capital
New Products
New Markets
New Customers
New Channels
Exit Strategies
Capital Investment
Corporate Strategy Business Plan S&OP
Revenue Targets
Margins
Working Capital
New Products
New Markets
New Customers
New Channels
Exit Strategies
Capital Investment
Revenue Targets
Margins
Working Capital
New Products
New Markets
New Customers
New Channels
Exit Strategies
Capital Investment
Strategic Intent 3-5 Yrs Annual Plan / Frcsts Rolling 36 Mo Review
Amount of Detail (Increases through various processes)
> Working Backwards from S&OP, Provides Validation of Plan & Strategy
> S&OP Focuses on Gap / Opportunity Assessment vs. Plan
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J im Biel, Ph: 847.687.5379, E-Mail: [email protected], http://www.linkedin.com/in/jimbiel (April 19, 2011)
Methodological Approach Measuring, Managing, Executing Strategies
S&OP Meeting:
Metrics
Best Frcst
Assumptions
New Products
Gaps / Opps
Strategic Issues
P&L Proforma
with Gaps /
Opps; Risks
Demand to
Supply; Supply
Back to
Demand;
Finance P&L w/
Risks / Opps
+ Demand Pre-
Meeting
+ Supply Pre-
Meeting
+ Capacitization
Monthly
If Needed, very
rare
When needed,
exception
basis
Same as
Above
Demand
Planning:
+ Same as
Above
Weekly
If Needed, very
rare
When needed,
exception
basis
Dem Pl with
System &
Sources;
Dem Pl w/
Supply –
Balancing
Supply Metrics
Demand
Planning:
+ Dem Planners
+ Sales
+ Marketing
+ Customers
+ Synd Data
Daily
GM Finance Typical
Interactions
Activity Frequency
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J im Biel, Ph: 847.687.5379, E-Mail: [email protected], http://www.linkedin.com/in/jimbiel (April 19, 2011)
Methodological Approach Measuring, Managing, Executing Strategies
S&OP Time Fences
Short-Term
(1-3 Months)
Mid-Term
(4-12 Months)
Long-Term
(13-36 Months)
Demand
Dem Pl – SKUs
All Demand Streams
Sales
Customers
Promotions
New Products
Supply
Fulfillment
Cust Serv
Finished Goods
Supply Contracts
Demand
Dem Pl – Prod Fam
All Demand Streams
Marketing
Customers
Promotions
New Products
Supply
Fulfillment
Finished Gds, Raw
Supply Contracts
Demand - Strategy
Dem Pl – Prod Fam
All Demand Streams
Marketing
Customers
Promotions
New Products
Supply - Strategy
Fulfillment & Sourcing
Ingred Contracts
Plant/Cap Network/Invest
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J im Biel, Ph: 847.687.5379, E-Mail: [email protected], http://www.linkedin.com/in/jimbiel (April 19, 2011)
Methodological Approach Measuring, Managing, Executing Strategies
Tool Box Needed to Execute
Systems of Record & Collaboration Tools
- ERP System
- Spreadsheets
- Collaboration Tools
- Purpose Built S&OP System Capability (i.e. SteelWedge)
- Metrics Scorecard Capability
Need a well thought-out and efficient S&OP Reporting Tool
to support Meetings and interactions
> Numbers
> Metrics Reporting
> Assumptions
Make your analysts “ analysts” – not data and report generators
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J im Biel, Ph: 847.687.5379, E-Mail: [email protected], http://www.linkedin.com/in/jimbiel (April 19, 2011)
Alignment/Integration Defined
• One Integrated Process (Process)
• People/Functional Alignment (People)
• One Common Set of Metrics (Performance)
• One System of Record (Platform)
• All Demand Streams (Demand Supply)
• Integrate All Available Data (Internal & External)
• One Forecast (Used by All Functions * )
• An Integrated Business Management Model
• Buy-In, Accountability, & Trust
• Transparency
* With Some Caveats
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J im Biel, Ph: 847.687.5379, E-Mail: [email protected], http://www.linkedin.com/in/jimbiel (April 19, 2011)
Closing Remarks
• Key Learnings From My Experience
– The Concept is Easy
– The Initial Buy-In is Fairly Easy
– The Change Mgt Required Can Be Hard
• New Process
• New Technologies / Systems
• New Accountabilities / Roles
• Traditional Functional Ownership Dies Hard – Silos
• Transparency Hard For Some to Swallow
– Consistency & Month-to-Month Execution is Hard
– Leader Needs to Keep Functional Leads Feet to the Fire
– May Need a Process Coach
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J im Biel, Ph: 847.687.5379, E-Mail: [email protected], http://www.linkedin.com/in/jimbiel (April 19, 2011)
Resources
• A Book: Sales & Operations Planning, The
Executive’s Guide, Thomas Wallace & Robert
A. Stahl
• “ Sales & Operations Planning:
Transformation From Tradition” White Paper,
AMR Research, May, 2009
• “ The Transformation to Demand-Driven
Industry Leader” White Paper,
Oracle/Demantra, September, 2006
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J im Biel, Ph: 847.687.5379, E-Mail: [email protected], http://www.linkedin.com/in/jimbiel (April 19, 2011)
General QA & Closing
• Please ask now
• Ask After Session
• Or
– Contact Me:
•Cell: 847.687.5379
•E-Mail: [email protected]
•Via LinkedIn: http://www.linkedin.com/in/jimbiel
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