presentation: purposeful collaboration for s&op · pdf filedistribution . supplier . ......

Copyright © 2014 Kinaxis All Rights Reserved. Copyright © 2014 Kinaxis All Rights Reserved.

Purposeful Collaboration: What It Could Mean For Your S&OP Process

Alan Lepofsky VP and Principal Analyst Constellation Research

Trevor Miles VP, Thought Leadership Kinaxis

© 2010 - 2014 Constellation Research, Inc. All rights reserved.

How Collaboration Can Improve Sales and Operations Planning

Alan Lepofsky – VP and Principal Analyst @alanlepo

Enable effective decision-making, resolution and consensus building

Oct 2014


Communications Is Not A New Idea

2


Collaboration Is Working Together

3


The Evolution of Collaboration Software

Email & Chat

Blogs & Wikis

4


Sharing Is The New Normal

5

© 2010 - 2014 Constellation Research, Inc. All rights reserved. 6

So Who’s Sharing?

Millennials Vs.

Boomers


Defining Digital Proficiency

Knowledge

Education Experience

Accessibility

Comfort

Beliefs Desires

Trust

Determines needs and behaviours

Proficiency

7


Not good at it

Want to do it

Good at it

Don’t want to do it

Good at it

Want to do it

Not good at it

Don’t want to do it

Knowledge

Com

fort

8



Knowledge

Com

fort

9


Holdouts

Immigrants Natives

Voyeurs

Disengaged



Email & Chat

Blogs & Wikis

Enterprise Social

Networks

10


It’s Not About What You Had For Lunch

11


It’s not about “being social”

Connect people

Make information available

Improve business processes


ERP CRM

13

Getting Work Done In The Stream



Email & Chat

Blogs & Wikis

Enterprise Social

Networks

Socially Enhanced Enterprise Software

14


Social HR/HCM

Learning/Development

Customer Support

Sales / CRM Marketing

Supply Chain

Engineering

Sharing In The Content Getting Work Done

15

Finance


Make “Social” A Feature of Your Processes

Support Ticket

Customer Record

Marketing Campaign

Social Network


Network Effects

17


Team Collaboration

• Sales • Marketing • Support • Engineering • Finance • Etc.

18


Cross Functional Collaboration

Sales Marketing 19


All Company Collaboration

20


External Collaboration Customers Partners

21


Here is where it gets really exciting

22


Supply Chain

Shipping

Manufacturing

Distribution Supplier

Customer

Supplier

Supplier

Invoicing

Retailer

23


Recap

• Understand the differences between Communication and Collaboration as well as the strengths and weaknesses of each

• Collaboration needs to be woven into business processes

• Networks effects = the more the merrier

24

© 2010 - 2014 Constellation Research, Inc. All rights reserved. © 2010 - 2014 Constellation Research, Inc. All rights reserved. www.constellationr.com

TM

Alan Lepofsky @alanlepo


Why Purposeful Collaboration is so important for Effective S&OP

Trevor Miles | VP, Thought Leadership @MilesAhead | +1.647.248.6269 | [email protected]

3

Copyright © 2014 Kinaxis All Rights Reserved.

Class A

People

Technology Process

Requires focus,

alignment, and engagement

throughout the company

Adapted from Oliver Wight, Ventana Research and AMR Research

Key Tech Capabilities What-if analysis Integrate supporting

applications Workflow management Action item assignment Automate financial

reconciliation Reporting & Visibility

Include executives, finance, manufacturing, demand planning, supply marketing, product engineering & design and IT Use cross functional teams for developing & reporting

Align operations with strategic corporate objectives Regular demand and

supply reviews Compare forecast vs

actuals Include multiple lines

of business / brands / factories

Have all departments use S&OP output as the plan of record Engage the CEO or

CFO as the sponsor

Sales & Operations Planning It cannot be performed without collaboration

4


Traditional S&OP Description Gets in the way of collaboration

Step 1 Data

Gathering

Step 2 Demand Planning

Step 3 Supply

Planning

Step 4 Pre-S&OP Meeting

Step 5 Exec-S&OP

Meeting

Actuals Demand, Supply,

Inventory, & Backlog + Statistical Forecasts

and Worksheets

Management Forecast 1st-pass spreadsheets

Resource Requirements Plan Capacity Constraints

2nd-pass spreadsheets

Decisions. Recommendations,

Scenarios, & Agenda for Exec Meeting

Decisions & Updated

Game Plan

5


Traditional S&OP Description Results in slow, disconnected processes

Step 1 Data

Gathering


Step 3 Supply

Planning


Step 5 Exec-S&OP

Meeting



and Worksheets






Decisions & Updated

Game Plan

How long does that

take?

CEO: I want to increase demand In Asia by 5% to compensate for revenue drop in Europe

Demand Manager/Planner: Given the last 12 months history and our existing Marketing plans which countries make most sense? Is this spread across all product families? What about NPI?

Supply Manager/Planner: Does the usual factory have capacity? If not, where else can we get supply? What will be the additional mfg & delivery cost? Which materials do we need to increase? Can the suppliers meet our new demand? If not, do we have alternative suppliers?

Inventory Manager/Planner: How much RM, WIP, and FG do we need to carry? Where are we going to place it? Do we have the warehouse capacity? What does this mean in terms of min order qtys? How close does FG need to be to customers?

S&OP Team: Do we have the right demand/supply balance? Will this meet the new revenue targets? Do we need additional Marketing campaigns? What-if the NPI does not take off as we assume?

Executive S&OP Team: Can we live with the projected revenue shortfall? Have all the risks been considered? Will Europe drop even more if we shift Marketing emphasis to Asia? What-if we accelerate R&D by 6 months?

6


Core Issues driving adoption of S&OP What we hear from all customers & prospects

• Complexity (regulations, expanding product portfolios, rapid growing sales in emerging markets) – Less predictable demand

• Multiple independent systems – Lack of visibility across the supply chain – Employee time spent on non-value-add data collection

• Immature S&OP processes – Dependent on individuals and tribal knowledge – No standard metrics

• Resulting in, amongst others, – Service levels below target – Excess and obsolete inventory – Asset utilization imbalances

7


Supply Chain Decisions are Multi-Faceted Requires Trade-Offs which require Collaboration

Growth

Revenue Cost of Goods

Working Capital

Corporate Trade-offs

R&D Strategy and Investment Asset Strategy and Investment

Corporate Social Responsibility Investment Trade-offs

Inventory

Supplier Strategy

Forecast Accuracy Customer Service

Channel Strategy Product and Service Portfolio

SC Trade-offs

Sales Policies

Distribution Policies

Manufacturing Policies

Procurement Policies

Logistics Policies

Returns Backorders Obsolescence First Pass Yield Material Yield Empty Miles

Supply Chain Waste

Adapted from Supply Chain Insights

8


Core Issues driving adoption of S&OP It all leads to Purposeful Collaboration

• Supply chains in all industries are facing increased

Volatility, Uncertainty, Complexity, Ambiguity

• Companies reduce the need for certainty by being able to

Observe, Orient, Decide, Act

• This requires increased

Visibility, Agility, Alignment == Collaboration

9


Rethinking S&OP

It is not about improving the accuracy of the forecast

and reducing the amount of uncertainty in the future,

it is about eliminating the need for certainty.

— Ronald W. Bohl, Eli Lilly

Quoted by Kevin Cook, Merck

10


Rethinking S&OP

Step 1 Data

Gathering


Step 3 Supply

Planning


Step 5 Exec-S&OP

Meeting



and Worksheets






Decisions & Updated

Game Plan

11


Rethinking S&OP

Step 1 Data

Gathering


Step 3 Supply

Planning


Step 5 Exec-S&OP

Meeting



and Worksheets






Decisions & Updated

Game Plan

12


Rethinking S&OP


Step 3 Supply

Planning


Step 5 Exec-S&OP

Meeting



and Worksheets






Process: What is Different? • Collaborative • Continuous • Concurrent

Technology: What is Required? Embedded: • Process Orchestration • Alerts/Responsibilities • Scenario Planning • Assumption Capture • Balanced Scorecard • Full Audit Trail

13


SCM World, The Chief Supply Chain Officer Report 2014 , Sep 2014

Purposeful Collaboration is the means. Know Sooner. Act Faster.


Q&A

Alan Lepofsky VP and Principal Analyst Constellation Research @alanlepo

Trevor Miles VP, Thought Leadership Kinaxis @MilesAhead

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