demand planning design at ghirardelli (ibf conference)

Fostering Demand Planning, Forecasting, S&OP for 30+ Years!

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Demand Planning at

Developing a Best Practice Process in support of S&OP


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Speaker Background

Kirk RelfIs the Manager of Demand Planning for Ghirardelli

Chocolates where he is responsible for developing and

implementing the new Demand Planning Process. Before

joining Ghirardelli, Kirk held a variety of Demand Planning

roles within the CPG industry. His more than 20 years of

experience includes category demand planning and

demand planning systems support at Clorox, Demand

Planning at Del Monte Foods, and forecasting at Mothers

Cookies. Kirk likes to develop tools in synchronicity with

process and has a passion for training and system support

for end users.


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Speaker Background

Anthony Reese CPF CPIM SCOR-P

Is the co-founder of Integrated Business Planning

Associates and is a visionary leader with passion for

bringing exciting products to market. His early interest in

cars led to his first job as an auto mechanic and then into

an impressive career in the automotive / motorcycle

industry. Along the way, Tony earned two advanced

degrees from MIT and now brings in-depth knowledge of

Product Lifecycle Management, Demand Planning and

Operations Planning to clients wanting to implement Sales

and Operations Planning processes and its current best

practice form, Integrated Business Planning.


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Presentation Outline

• A Business Overview

• The Need for S&OP

• Beginning with Demand Planning

• The Demand Planning Design Process

• Design Best Practices

• Questions & Answers


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The Chocolate Business


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Beans To Bars


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Demand Variability


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S&OP Project Benefits

Support company growth with better decision making A better demand signal to the business – Improved forecast accuracy

A better supply plan to meet our demand efficiently

Action plans more deliberate with a longer term focus

Achieve cross-functional alignment consistently Increased data and decision transparency across teams

Improve relationships with internal teams, customers and vendors!

Achieve cost improvements Optimized inventory and associated operating costs

Lower exceptional clearance and scrap costs due to a lack of alignment

Reduce the Herculean effort to sustain supply & service to our customers


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Target S&OP Process

• Senior Management Buy-In

• Long Term View of Capability Building

• Open to Best Practices Approach

Consensus Demand Review

Supply Review

Financial Review

Executive Review & Alignment


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• Leading practice: Few have it, proprietary restrictions may

exist, not proven in many industries, changing the competitive

landscape, major improvement in one or more performance

attributes/metrics.

• Best practice: Widely accepted, (significant) improvement

over common practices, applicable to majority of industries,

plus ‘current, structured, proven and repeatable’.

• Common practice: Generally accepted as minimum

standard, baseline of acceptable performance, clearly

defined, accepted in all industries (few to no exceptions).

• Outdated practice: No longer accepted, widely identified as

insufficient, compliance issues, lagging results.

Types of Practices

Outdated

Common

Good

Best

Leading

Emerging

Best Practice

Source: SCC SCOR Model.

Note: A practice should match several of the listed characteristics to qualify as a practice of that type.


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Begin with Demand Planning

• A robust Demand Plan is the basis of

S&OP

• A reasonable Horizon is Required for

S&OP effectiveness

• The Timing and Process for Demand

Gathering must align with the final S&OP

Cadence


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Project Governance Bodies

Project Sponsors: The VPs of the 3 Primary S&OP

departments (Sales, Operations and Finance) – Key

Deliverable Approval

Subject Matter Experts: Business experts that will be called

on as needed to assist in the design work.

Steering Committee: Cross functional business leaders from

Sales, Operations and Finance – Issue Resolution, Process

Alignment and Review

Core Team: Functional resources who are connected to the

current processes and data and have committed up to 30% to

perform the design work.


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Three Step Approach

The Demand Planning

Design Process

Envisioning

Gap Assessment

Detailed Design


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Our Approach

Demand

Planning

Capabilities

Goal

People

Process

Tools

Data

Metrics

Change Management


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Assessing Demand Planning

Capability

GoalAre objectives of demand planning aligned to

supply chain & business goals? Does leadership

understand the importance of this capability?

PeopleWhat role do the supply chain and others like

commercial teams play in the demand planning

process?

ProcessWhat activities are included in the demand

planning process? What level of formality and

standardization exists?

ToolsWhat is the state of technology platforms,

software applications, and tools that enable

demand planning responsiveness?

DataHow accessible; accurate, and complete are the

data available to enable the demand planning

process?

MetricsHow developed and jointly shared are the key

indicators for measuring and predicting

performance improvements, and objectives?

ChangeMgmt

What is the organization’s capability to make

sustainable changes/improvements? Or identify

constraints / enablers to achieving a target state?

*Adopted from a Gartner Demand Planning Framework


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Mapping & Gapping

As Is Process Maps For Each Demand Segment

Process Descriptions For Each Demand Segment


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Level 2 Process Flow

Detailed Design

Begin

Metrics & Feedback

BaselineStat & Promo

Forecast

All Other Stat

Forecast

In/Out Seasonal Forecast

New ItemsDist WhseRepleni-shment

Forecast Enrich &

Consensus

Publish & Communi-

cate

End

Level 1 Process Flow

Consensus Demand Review

Supply Review

Financial Review

Executive Review & Alignment


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Detailed Design

Level 3 Process Flow – Baseline Stat & Promotional Forecast


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Detailed Design

Level 4 Work Instructions

Level 5 Systems, Architecture & Tools


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Design Best Practices:

New Demand Planning Function

Field Sales Planning Moves to One Tool

Key Customer Focus

Promotional Volume Focus

Stat Forecast For “All Other” Customers

Enrichment & Consensus Collaboration

Base/Lift Visibility for Promotions

18 Month Planning Horizon with 3 Zones

Metrics Driving Improvement

Constrained Demand Plan

New & In/Out Forecasts Always In System


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Questions


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Contact Information

Kirk Relf, San Leandro, California

[email protected]

Anthony Reese, San Jose, California

[email protected]

mailto:[email protected]

mailto:[email protected]

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