continuous s&op - breaking the mold - kinaxis presentation
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Copyright © 2014 Kinaxis All Rights Reserved. Copyright © 2014 Kinaxis All Rights Reserved.
Continuous S&OP –
Breaking the Mold
Trevor Miles | e: [email protected] | m: +1.647.248.6269 | t: @milesahead
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Copyright © 2014 Kinaxis All Rights Reserved.
What have we been working toward?
The 5 step ES&OP Process - Tom Wallace, Executive S&OP: The Executive's Guide
Issues
- Sequential
- One Directional
- High Level
- Manual
- Slow
- Unit based
- Ignores margin
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A lot has changed in 25 years Unprecedented time of global expansion
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Copyright © 2014 Kinaxis All Rights Reserved.
A lot has changed in 25 years PC, ERP, APS, internet, …
Oliver Wight: Transitioning from S&OP to IBP
DOS
VisiCalc
Windows 95
SAP APO
GSM Mobile
Excel
SAP iPad
dotCom
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Jun 2007
Mar 2011
Aug 2006
Mar 2006 Feb 2004 May 2003
Sep 2010
Oct 2012
A lot has changed in a little over 10 years Cloud, Social, Mobile, Internet-of-Things, …
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A lot has changed in 5 years Internet-of-Things, 3D Printing, …
http://www.holyrood.com/2012/12/briefing-11/
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Disruptive Technologies for Supply Chain SCM World, The Chief Supply Chain Officer Report 2014, September 2014
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But our mental model is stuck in 1990s ideas
The traditional “plan then execute”
model is the product both of historical
thinking about supply chain processes
and the state of available supporting
technology. Next Generation Supply Chain Management - The Integration of Planning and Execution,
CSCO Insights Thought Leadership Series, Supply Chain Digest, 2009
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Copyright © 2014 Kinaxis All Rights Reserved.
Traditional S&OP Description
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
12
Copyright © 2014 Kinaxis All Rights Reserved.
Traditional S&OP Description
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
No wonder companies
still think in terms of
months and quarters
Exec: 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?
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Copyright © 2014 Kinaxis All Rights Reserved.
Traditional S&OP Description
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
14
Copyright © 2014 Kinaxis All Rights Reserved.
Traditional S&OP Description
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
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Copyright © 2014 Kinaxis All Rights Reserved.
Continuous & Collaborative S&OP
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
Huge improvements in
- Visibility to issues
- Resolution time
- Alignment across functions
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StrataBridge, Evolution of Sales & Operations Planning, Andy Coldrick, Dick Ling & Chris Turner
Risk Adjusted Long Term Plan One number plan wrong approach
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Outside-In approach critical
Source: Gartner, Elevate Your S&OP Process From
Traditional to Demand-Driven, Todd Applebaum and Jan
Kohler, Jul 2, 2012
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Copyright © 2014 Kinaxis All Rights Reserved.
Outside-In approach critical
Supply
Network
Innovation
Network
Distribution
Network
Source: Gartner, Elevate Your S&OP Process From
Traditional to Demand-Driven, Todd Applebaum and Jan
Kohler, Jul 2, 2012
Finance
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Copyright © 2014 Kinaxis All Rights Reserved.
Continuous S&OP – Breaking the mold
AND, not OR
Concurrent, not just sequential
Event-driven, not just calendar-driven
Effective, and efficient
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Continuous demand, supply, and market input
Continuous S&OP – Breaking the Mold
Opera
tional P
lannin
g &
Execution
Financial Performance
Finance Consensus
Finance Scenarios
Statistical Forecast
Demand Consensus
Demand Scenarios
Sa
les &
Ma
rke
tin
g
New Product Gates
New Product Consensus
New Product Scenarios
En
gin
ee
rin
g/R
&D
Supply Performance
Supply Consensus
Supply Scenarios
Op
era
tio
ns
Fin
an
ce
Continuous S&OP
• Generate plan
• Sense when plan will not be met
• Identify future risk
• Mid-cycle adjustments
• Know sooner, act faster
Key Capabilities
• Range planning
• Decision orchestration
• Business trade-off analysis
• Scenario planning
• Assumption capture
• Concurrent planning – Time
– Function
– Hierarchy
Mo
nito
r P
erf
orm
ance C
on
tin
uo
usly
Future
Risk
Exe
cu
tive
S&
OP
Me
etin
g
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What does ‘good’ look like? Qualitative Improvements
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Copyright © 2014 Kinaxis All Rights Reserved.
What does ‘good’ look like? Quantitative Improvements
Copyright © 2014 Kinaxis All Rights Reserved. Copyright © 2014 Kinaxis All Rights Reserved.
Continuous S&OP –
Breaking the Mold
Trevor Miles | e: [email protected] | m: +1.647.248.6269 | t: @milesahead