s&op leadership exchange: global rollouts- balancing standardization and localization
DESCRIPTION
866.P4D.INFO | Plan4Demand.com | [email protected] As a global economy continues to grow and evolve, more and more companies are faced with extending the reach of planning to include their entire operating footprint across markets and time zones. On this global scale, what we are faced with are systems and processes implemented on a project-by-project basis, or adopted regional processes already in existence tweaked to fit a global mold, both culminating in isolated functional silos. Alternatively, many companies create a rigid global template that doesn’t adapt well to local operating requirements or decision making processes. In fact, a recent survey revealed that 63% of companies have multiple (5 on average) S&OP processes. Global impacts create a number of challenges for organizations at both the global and local levels. It’s no wonder that 80% of supply chain executives believe that their S&OP processes are out of balance. How do we drive consistent processes, methods and a degree of standardization across a wide span of operation companies and market strategies, while at the same time recognizing the differences and nuances that global operations require? To do this, we have to assess and balance the needs of both levels, and work out a model that creates a decision making model that fits the needs to each region, while developing metrics, roll up reporting, and common approaches that prevents each region from “re-inventing the wheel”. Join us for a discussion of how to create this balance, critical design considerations, as well as some key obstacles to avoid. A few key takeaways from this session include: Insights into a balanced model Some implementation ideas Lessons learned from building a Center of Excellence approach Check out this webinar on-demand at http://plan4demand.com/Video-Global-Rollouts-Balancing-Standardization-and-LocalizationTRANSCRIPT
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June 27th, 2012
S&OP LEADERSHIP EXCHANGE: GLOBAL ROLLOUTS – BALANCING STANDARDIZATION & LOCALIZATION
The Web Event will begin momentarily with your host:
Andrew McCall
plan4demand
Understanding the impact and reasons why companies are more interested
in a Global view of Sales & Operations planning – Does this fit your
organization?
Gain some insight into the obstacles and roadblocks that a global rollout of
S&OP faces :
where are the complexities?
which ones are important?
which ones are just “noise”?
Review some of the implementation strategies than can offset the obstacles,
and establish a global process, without losing the local decision making and
action orientation that is so critical to a high performance S&OP process.
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Why? What reasons do we have to drive towards a global view?
Leverage best practices
Common Process model allows for us to aggregate and disaggregate our views
of data, business conditions, reporting, etc.
Common Metrics and KPI’s for measuring success
Labor, Market Conditions, Tax, Cost to Produce arbitrage & flexibility is
desirable in a global economy
Global growth diversifies risk in our organizations
Sounds great – but are we making any progress?
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Yes 77%
No 23%
Whether Operate Globally
SOURCE: Supply Chain Insights, VOICE 2012 Base: Total Sample (61)
Q12. Does your company operate “globally?”
Base: Operate Globally (47)
Q13, Which of the following best describes how your company operates “globally?” Please select the one that fits best.
19%
32%
11%
38%
How Operate Globally
Global (regions roll up
into global
team; plan
globally to act
locally)
Multi-
national (countries roll up into
regional operation;
global planning)
Multi-
national (countries roll
up into regional
operations;
regional
planning)
Regional (regional
operations
supported by
regional supply
chains)
43% Multi-national
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Today’s realities
Company’s have multiple S&OP processes
Supply Chain vision is diluted or poorly understood globally
Unit performance metrics and global trade offs can easily be misaligned
Results are still regional, so decision making processes are too
Global governance has no real teeth
Infrastructure
• Data
• Reporting
• Systems Footprint
Global Supply Chain Consistency
• Vision
• Metrics/KPI’s
• Process Consistency
• Business Model
Culture/Politics
• Transparency
• Goals
• Communications
• Decision Making
Governance & Funding Model
• Common Oversight
• Suggested vs. Required
• Local Requirements
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• Product Roadmap
Decisions – Global Level?
Local Market Driven?
Both?
• Pricing Strategy? Brand
Drive? Market?
• Top Down Revenue
Planning?
• Local Market/Region
Bottoms up Forecast?
• Do we share GAPS with
“Global Process”, of
keep in house?
• Global Manufacturing
Footprint?
• Bias towards “Regional”
service?
• Global Balance Decisions
vs. 4 walls of the local ops
• Transparency
• Gaps
• Risks & Opportunities
• Financial Trade Offs
between regions
• Executive Regional Targets vs. Global Goals
• Review & Action Surrounding:
• Gaps & Decision Making
• R&O
• Communicating the Plan/Decision Buy In
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Where are the following key decisions made in your organization?
Select your answers on the left side of your screen
Portfolio Management (New Products, Markets, SKU Rationalization, Pricing?)
Regionally
Global
Demand Management (Volume projections, Demand Forecast, R&O?)
Regionally
Global
Supply Management (Where made, Capacity, Sourcing Changes, Network, Inventory)
Regionally
Global
Pre-S&OP/IBR (R&O, Gap Closers, Scenario Recommendations/Decisions)
Regionally
Global
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Global Roles – Leveraging Span & “The Helicopter” view of the business
Need to provide overall supply chain strategy, and how it supports with and works with
individual markets
Establish Common Practices for key planning processes so that a base layer of consistency exists
to leverage when viewing the business as a whole, setting targets and making decisions
Common KPI platform (methodologies and calculations, not necessarily targets)
Outline where sourcing, distribution and production footprints server more than one region
Local Roles – What needs to stay close to markets & operations to drive solid decision
making and action?
Market Intel & Demand Signal Management
Channel & Business Model differentiation within regions or local markets
Target and Threshold setting
Local Assumptions based on Demonstrated Performance
Achieving Balance? What brings these two vantage points together and
synchronizes them, instead of putting them at odds?
Transparency
Understanding the role that each “view” plays in the overall Decision Making process
surrounding mid and long range planning
Top Down - Global Template, Local Customization
Creation of a Global Process Template
Global Reporting Package
Local changes to the sub processes to help support decision making, but still rolling to a top line
package that is standard world wide
Actions and Decision making at both the Global and Local level
BEST FIT?: Global Operating Footprint, Similar Channels to Market World Wide – StratPlan
managed globally with local performance inputs
Bottom Up - Local Template, Global Rollup Requirements
Local Templates by Region – minimum standards outlined globally
Financial Projection, R&O and KPI’s roll up based on common methodology for consolidation
Global Rollup is largely a reporting & monitoring view – actions and decision making are
managed locally against local targets & goals
BEST FIT?: Regional/Local Operating Footprint, Dissimilar Channels to Market across different
regions and localities – StratPlan managed locally in market with global inputs or assumptions
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Hybrid - Global Center of Excellence
Help provide structure to either the Top Down or Bottom Up Model
Create an overall Governance and Process Model “review board” for localizations, or entire
local processes to be vetted, “certified” and monitored for performance
Establishes a top down view that can be used to highlight misalignments in goals, objectives, or
gaps in strategy that result in growth, changes in market conditions or portfolio shifts in the
categories (ours or our competitors)
Allows local markets or regions to pull on “expertise” and experience from other markets facing
similar challenges without having to “re-invent the wheel”
Allows for Global adjustments to the model or strategy by incorporating changes in the strategic
plan into the CoE charter and definition and be rolled out consistently
Manage the Roadmap & Priority of initiatives and the rate of change
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Global Consumer Goods Company:
OTC Products still requiring a high degree of validation and FDA type compliance
4 primary markets (EMEA, NAFTA, South America, AsiaPAC – with an emerging BRIC strategy
2 production facilities supporting global supply
4 In Market Packaging and Distribution facilities supporting Global Demand, and Local
Postponement strategy
Challenges:
5 different S&OP Processes
Supply viewed and planned through a site specific Supply Review process – disconnected from
the global view, silos between Base Production & Packaing
Manufacturing Flexibility Strategy not well understood at the facility level
Demand driven by market specific financial targets
Impacts
Customer Service Levels falling while Inventory was growing – mix was wrong based on
fractured planning & strategy
No visibility across the globe into operating capacity and market demands that could be used to
balance supply & demand fluctuations. Idle capacity in one market, customer service issues in
another market that could be resolved by pulling that capacity into the plan.
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Global Center of Excellence – “Chicken or the Egg?” Needed to redefine the S&OP process model for the entire business – Top Down, Bottom Up?
Several Key decisions that needed to be reached: Global Supply Footprint Trade Offs – Cost Per Unit - Flexibility
Demand Consensus at a market level – how do we consistently arrive at a number that is locally viable, and
not linked to a “site view” of packaging capacity
Common Metrics & KPI’s that align with the overall Strategic Plan
Governance Model to support local demand decisions being fulfilled by a global network Establish priorities in terms of overall business strategy, not local cost per unit
Create internal service level requirements and metrics
Define Roles in terms of the planning process – R.A.C.I model for units, global team and decision making
domain
Roadmap Built S&OP Teams
Steering Committees (Local & Global) – evolved into Governance Team
Global Project Team (included Local Champions)
Local Champions & Project Team
Outlined Global Standard Maturity Model – Stages of Evolution
Local Level Diagnostic – How far off are we, target stage of evolution by region or site
Establish Rollout Sequence
Create Playbook for Rollout
Used Continuous Measurement to manage progress and Governance reporting
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Strategy – needs to be well understood from a global and local level in order to make
good decisions on the right model to use – top down or bottom up
Develop Balance – the design needs to be considered from both the global view and
local decision making. If we are out of balance – it becomes a “read out” and not
actionable
Implementing the model – you don’t have to start with a “CoE” – but you CAN leverage
the principles and rollout strategy even if you don’t establish the global layer in a very
formal fashion. Take a “best of the best” approach and use the components that fit your
organization best.
This Summer – Look for:
A summary of this years survey data across all 6 sessions to date
A schedule of the fall webinar topics
A few other surprises in the group – have a good summer!
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September 12th S&OP Technology: A tool, or a strategy?
October 3rd S&OP Jump Start: Starting or Re-Starting
your process in less than 90 days
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