Posts categorized as 'Sales and operations planning (S&OP)'

Driving profitability through advanced S&OP

AlexaCheater

profitabilityAs Gartner Research Director Matthew Spooner noted in his recent presentation at the Gartner Supply Chain Executive Conference, advanced sales and operations planning (S&OP) is like a hotel. It’s “somewhere you visit, not somewhere you live.” What exactly does that mean? Essentially that while it can, and in many cases does, drive improvements to your balance sheet, it’s not a blanket, one size fits all process that applies to every aspect of your company’s supply chain.

In fact, Spooner says S&OP isn’t a supply chain process at all. It’s a business one. Also often referred to as integrated business planning (IBP), it’s just one way many businesses are evolving to stay competitive in a changing landscape. Uncertainty around high-impact events, expanded global presence, pricing pressures and increasing product mix complexity are just some of the reasons more companies are looking to kick their traditional supply chain practices into high gear.

Improving P&L

As outlined in Spooner’s presentation, companies with higher S&OP maturity are clearly seeing a positive improvement when it comes to profit and loss (P&L) statements. According to data from Gartner’s 2013 S&OP Maturity Research Study, higher maturity businesses saw a 5.6% increase in revenue, 7.5% decrease in costs and a 7.2% increase in profitability because of successful advanced S&OP.

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[Video] Roland DG: Transforming its sales and operations planning process

MelissaClow

This blog is part of a video interview series. Check out the video below as well as links to other supply chain practitioner and Kinaxis executive interviews.

The long-term objective at Roland DG Corp. is to elevate its supply chain organization to the strategic decision-making level, says Zoltan Pekar, vice president of the company’s global supply chain division.

To achieve that, the manufacturer of wide-format printers, needs a truly collaborative environment and a consolidated sales and operations planning process. Roland is relying on RapidResponse from Kinaxis to help it realize that goal, Pekar says. With RapidResponse, the organization has connected the company data worldwide, and provided transparency and accurate reporting across the organization.

The company-wide transformation that Pekar speaks of required a change in mind-set. “That was critical in the process, and I’m very happy to say that now we have a full sales and operations process, we have people coming together to search for information, and it’s all based on RapidResponse. It’s been valuable, and we have lots of other plans to build on this data platform.”

Pekar dismisses criticism of S&OP as a minor process. “The key factor for us was to bring the sales and operational sides together because we were a very fragmented organization with silos, and the RapidResponse tool has brought these sides of the business to the same table to make decisions.”

Roland DG: Role of IT as Competitive Global SCM Strategy

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Goodbye scheduled decision-making, hello concurrent planning

AlexaCheater

Sales and operations planningThe face of sales and operations planning (S&OP) is changing. Gone are the days when sequential, isolated planning and monthly meetings based on out-of-date data are sufficient to drive stability and success.

End-to-end initiatives now span beyond the confines of a single company’s supply chain, encompassing extended supplier and customer value networks, as well. Digitization, sparked by the rise of the Internet of Things (IoT), the expanding number of connected devices and big data, is driving a shift in consumerism. Your company needs to keep pace, or risk falling behind forever.

The reality is, supply and demand waits for no one — not even your executive team.

Running a profitable global business requires speed and agility in both strategic and
tactical planning. But transitioning to a new way of looking at S&OP means saying goodbye to scheduled decision-making, a frightening thought for many. It may seem like an impossible step. How can you let go of the security of regular meetings planned weeks in advance? Or the safety of knowing those big decisions only come around once a month?

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[Video] TE Connectivity – A continuous sales and operations planning process

MelissaClow

This blog is part of a video interview series. Check out the video below as well as links to other supply chain practitioner and Kinaxis executive interviews.

The task of linking sales and operations planning systems of any company with truly global reach is difficult enough to begin with, says Lindsey Kathmann, supply chain analyst at TE Connectivity. But complexity is heightened when the enterprise is structured into separate business units, some with their own spinoffs.

That’s the situation faced by TE Connectivity, which specializes in designing sensors for several industries. It’s divided into Transportation Solutions, which focuses on cars, planes and trains; Aerospace, Defense & Marine; and Industrial, which specializes in consumer products, such as cell phones.

TE Connectivity: Continuous sales and operations planning process

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Kinaxis Positioned in the Leaders Quadrant of Gartner’s Magic Quadrant for Sales and Operations Planning System of Differentiation

MelissaClow

Gartner S&OP SOD Magic QuadrantIt is with great pride that we announce Kinaxis® has been placed in the Leaders quadrant of the recently published Gartner Magic Quadrant for Sales and Operations Planning Systems of Differentiation.

Gartner defines a sales and operations planning (S&OP) System of Differentiation (SOD) as a software solution that supports a Stage 4 or higher maturity S&OP process. According to the report, “Leaders have a strong vision for their S&OP SOD capabilities. They recognize the role they will need to play in enabling the move toward multienterprise horizontal planning allied with vertical integration that links strategy to operations and execution. They are looking at developing analytics to support probability-focused end-to-end predictive and prescriptive analytics to support profitability trade-offs and supply chain design and configuration capability.”1

Because of our unique ability to provide concurrent planning, Kinaxis RapidResponse® is an ideal solution to take companies through the various stages of S&OP maturity. We believe the next revolution in supply chain performance can only be achieved by realizing the speed of cross-functional decision making. As today’s press release indicated, our goal is to advance our customers’ S&OP processes from early stages through to Stage 4, and beyond, over time by taking advantage of all full capabilities in our single product.

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Is S&OP an expensive band aid?

Dr. MadhavDurbha

S&OPI love talking to customers and prospects! Each of these interactions provide me with an opportunity to meet someone new, learn about their business, their challenges, dreams, and aspirations. The topic that often comes up in these conversations is Sales & Operations Planning (S&OP). While S&OP as a discipline has been around for over two decades, it has been generating great interest recently. As much interest as it has generated, based on my conversations, the results from S&OP efforts have been mixed at best. From time to time, I hear comments such as:

  • “My monthly S&OP process takes 6 weeks to execute”
  • “We have this massive excel sheet into which we load all our S&OP data to generate the reports for review. The process to gather the data is time consuming and by the time we present our S&OP to our leadership, the world has moved on and our plans are no longer valid”
  • “We started S&OP as our COO insisted we do it. It is turning out to be a report to him, rather than a tool to run our business”

In fact, this has been such a recurring theme that I decided to share my point of view in this blog. Let me elaborate on what I believe are the reasons behind this disillusionment.

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What is the Operating Model for S&OP? by Accenture Strategy Guest Blogger

Steven J.Puricelli

Last month, I launched a new blog series on sales and operations planning (S&OP). I outlined a number of important topics I plan to explore this summer. Building upon my post about the ownership of S&OP, it’s time to talk about defining the operating model for S&OP. Executives frequently ask: “How should I structure S&OP and organize it to account for different divisions, brands, or geographies”?

One of the more difficult aspects to get right behind a good S&OP process is the underlying structural design…or what I call the operating model. Most S&OP teams are tasked with managing an extensive and complex web of functional departments, sub-processes, products, customers, brands and geographies. A foundational framework that creates the appropriate intersections and touchpoints is imperative for S&OP to function effectively. When I reflect on leading S&OP processes, two key foundational aspects are always present: 1) a well understood conceptual model and 2) a well-defined structural model. They help define the operating model for S&OP.

Conceptual Model
The purpose of the S&OP process, which I discussed in my second blog, is to enable cross-functional information sharing, trade-off analysis, and decision making for the supply chain and overall business. The S&OP process is a broker of information…or to use one of today’s common supply chain buzzwords, a ‘control tower’. A recent Accenture article describes the importance of eliminating the disconnect between sales and supply chain, which is what a proper S&OP operating model seeks to create. This part of the S&OP operating model is as much a cultural mindset as it is something that gets defined by tangible organization charts or team diagrams. High performing S&OP processes do a tremendous job sharing information efficiently across the organization using a hub and spoke model as shown in the figure below…there’s incredible communication and alignment.

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Who owns S&OP? By Accenture Strategy Guest Blogger

Steven J.Puricelli

Last month, I launched a new blog series on sales and operations planning (S&OP). In that introductory post, I outlined a number of important topics that I plan to explore throughout the summer. Building upon the last post about foundational elements behind S&OP, I want to consider a question I get all the time from executives: “who really owns, or should own S&OP”? More broadly speaking, it is important to share some leading practices on the organizational aspects of S&OP that includes three components: 1) proper composition of the team, 2) ownership and who leads the team, and 3) how the team performs effectively.

Team Composition

S&OP is a team sport – period. S&OP is arguably one of the most cross-functional processes in an organization and requires input from sales, marketing, finance, supply chain, manufacturing and so on. Some of the best S&OP processes include great cross-functional participation and engagement (the latter being much more critical) from across the organization. When it comes to S&OP, the composition of the team I typically see, in some shape or form, at leading organizations is as follows:

SOP Team Composition

In concept, this team diagram should make sense and be logical to most people, but in practice, oftentimes a number of these functions are either under-represented or missing entirely. Getting the right engagement from the organization requires a few things. First, leadership from the top-down communicating about the importance of S&OP to the business and its priority to the executive team is critical. Second, when I said S&OP is a team sport, I didn’t mean a spectator sport. A well performing S&OP process requires active involvement and contribution to the team, which means engaging in the process and performing the necessary activities and inputs. Finally, in exchange for the inputs and active participation in the process, it’s only fair to return the favor and provide valuable outputs to the team members. After all, most of the team members in the diagram above have day jobs to worry about, so to encourage sales or marketing professionals to engage and provide inputs into the process, make sure some of the outputs create value for them. Keep in mind the WIFMs (what’s in it for me) for the team, it will help with the engagement.

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