Archive for February, 2009
“Lean Times Beget Fresh Fashion Ideas”
Below is a brief excerpt from an article published in today’s Wall Street Journal.
One might ask – how is this relevant to a blog on Sales and Operations Planning (S&OP)?
Not only do lean times beget new, and innovative fashion ideas – but they also beget new and innovative ways to run your business! Is my sales organization marching to the same drummer as my operations organization?
Now is the time to think long and hard about tough questions.
Do my planning processes meet the demands of today’s rapidly changing environment? Are planning decisions based on facts? Is the information I use to make strategic decisions involving sales promotions, inventory, sales strategy and operational capacity timely? Am I looking at and optimizing my decisions based on the “Big Picture” ? Do I have an efficient system for managing the automation process (such as the purpose-built Executive S&OP solution developed by Steelwedge Software)? Am I using the valuable information inside my system ecosystem – tracking opportunities inside Salesforce.com, analyzing demand patterns using data from SAP BW, APO and ERP, or benchmarking my operational plans against my financial goals created using SAP BPC, Oracle Hyperion, etc
There are many more questions to ask during these challenging times.
Now is the perfect time to innovate and to make difficult but lasting changes. Institute disciplined S&OP processes, automate slow, labor-intensive, manual processes, and improving your decision making process!
Lean Times Beget Fresh Fashion Ideas
By CHRISTINA BINKLEY, Wall Street Journal
![[Lean Times Beget Fresh Fashion Ideas]](http://s.wsj.net/public/resources/images/PJ-AO478_pjRUNW_F_20090217181821.jpg "Lean Times Beget Fresh Fashion Ideas")
Kurt Wilberding/The Wall Street Journal
Marc Jacobs sent extreme, 1980s-inspired looks down the runway.
Judging from the styles on display at fashion week, a recession does wonders for creativity.
There’s been an outpouring of artistry and ingenuity on New York’s runways this week — much of it directed at creating looks that are actually attuned to what people want. It looks like the fashion industry is rethinking itself to meet the demands of consumers who want both innovative design and terrific value.
![[Runway]](http://s.wsj.net/public/resources/images/PJ-AO483_pjRUNW_DV_20090217205536.jpg "Lean Times Beget Fresh Fashion Ideas")
Designer Matthew Williamson showed characteristically vivid patterned dresses.
Many designers appear to be doubling down on whatever talents they feel make them unique. “I’m just doing what I do — tap into that brand DNA and do it to the max,” said designer Matthew Williamson, moments after showing a smart collection of spicy patterned dresses and skirts.
Best Practice: Attribute Based Planning in Sales and Operations Planning (S&OP)
Attributes are often needed to plan the supply and demand of products that are built-to-order or required to meet complicated engineering specifications. What is new, is the way that Steelwedge seamless enables companies with complex configured products to manage their Sales and Operations Planning process using this approach.
Examples of the types of companies that benefit from this approach include those that manufacture products such as servers (disk drives, processor type, etc), network switches (type, size, capacity, memory), and electrical components (different voltages, capacities and fittings).
Engineered products drive higher margins and premium prices because they meet the actual requirements of customers and halt the profit-eroding impact of products which are commodities. Steelwedge customers use attributes not only for Demand and Supply Planning but also for S&OP thereby enabling companies to better track and plan their high margin products.
For S&OP, attribute-based planning is used to translate market demand into demand for a specific group of products that an organization sells. At the order level, attribute planning determines which products are used to satisfy demand.
Furthermore, Steelwedge customers use attributes to describe the engineering specifications, code-date of manufacture, lot id, and color to support specific customer needs. Environmental concerns, safety concerns, and quality concerns also drive customers to prefer specific suppliers for a product. Attribute-based planning has enabled some Steelwedge customers to drive higher prices and better manage their inventories.
The Analyst’s view of Sales and Operations Planning (S&OP)
During the past year, all of the major analyst firms have started tracking Sales and Operations Planning (S&OP) closely. Why is this the case? After years of being viewed as one of many important processes adopted by best-in-class CPG companies, companies in all sectors of the economy are now realizing that effective balancing of supply and demand mst be done at a strategic as well as a detailed level. Moreover, the maturation of the data and infrastructure available to execute S&OP now makes it possible for companies to achieve this important goal.
Moreover, the current economic crisis is forcing companies to manage demand against supply much more tightly and effectively than ever before. The net result is a burgeoning market for consulting and software firms tapping into this demand. While only a handful of companies such as Steelwedge Software are truly dedicated to supporting this vital, strategic process, many other companies – mostly in the supply chain space – have jumped on the bandwagon and are now offering solutions and services in this area.
So what is the analysts view? The answer is surprisingly divergent. While some analysts see S&OP as a generic term for a monthly executive supply-demand review process, others look at it in a more nuanced way. Some analysts have dissected it by industry whereas others view it as function of organizational maturity.
In any case, we are extremely glad to see that the world is finally elevating S&OP to the level it deserves as the driving strategic process that integrates executive management and corporate strategy with operational tactics.
Sales and Operations Planning (S&OP) in a world of Cloud Computing
Last year, 100% of Steelwedge Sales and Operations Planning (S&OP) solutions were delivered on a “SaaS” (Software-as-a-Service or OnDemand) basis – in other words, they were delivered “in the cloud.” Our partners and prospects frequently ask us why? The simple response is that it is what our customers asked. However, the broader question is why is this happening? The strategic answer is that the nature of computing is going through a sea change and that change is being accelerated by the current economic crisis.
But first, what is cloud computing? It is a world where applications and data are hosted in a “cloud” consisting of thousands of computers are linked together and a ccessible via the Internet. With cloud computing, all activities are performed via th internet rather than being based on your desktop or inside a corporate network.
How does cloud computing change the way people work? For one, people are no longer tied to their office or to a single computer. Work can be taken anywhere and team members can easily collaborate on plans and forecasts.
Why? Cloud computing offers a revenue and service model that enables companies to survive today’s challenging times – on one hand the huge upfront capital costs associated with the kind of traditional enterprise computing solutions offered by SAP and Oracle are eliminated. On the other, the need for costly, large dedicated IT organizationns with specialized knowledged are also eliminated.
Further, cloud solutions lend themselves to easy collaboration with partners and customers outside of corporate firewalls and ensure that software upgrades and updates are seamlessly applied with minimal disruption. In short, cloud computing offers customers a compelling, accessible, flexible, pay-as-you-go, and extremely cost-effective solution for automating cumbersome, manual excel-based integrated business planning and sales and operations planning processes.
Some thoughts on S&OP Best Practices
Decades of experience with planning systems has shown that detailed planning and execution systems do not work to to their full capability without integrated monthly sales and operations planning process and solution. S&OP systems such as the Steelwedge S&OP solution ensure that demand and supply plans are balanced at the family level, volume level, dollar goal point, and that detailed item and mix levels can be properly managed on a day-to-day and week-to-week basis.
An S&OP solution does this by directly connecting to ERP, CRM, MRP and RCCP processes and using this feedback to guide other detail level execution processes.
Without this connection to detailed resource planning tools, the objectives and plans established by exeuctives in the S&OP process cannot be consistently achieved. Some best practices to consider include:
1. Sales forecasts developed for each product line in each business segment based on collaborative input from the field, from Sales Opportunity information contained in CRM systems, on history, from distributor POS data, and from exection sales and marketing management.
2. Forecasts include backlog, individual item forecasts, a family planning bill or product mix (sBOM) view.
3. A weekly production schedule by item up to eight weeks out (depends on lead time) as well as weekly shcedules for up to 26 weeks out.
4. An 18 month forecasts and production plan including materials and resource requirements.
5. A clear Executive S&OP process involving top management to review and approve S&OP plans and goals which enables tactical decisions to be managed by operational managers.
6. A clear six-step S&OP process is in place that involves and engages all relevant parties. This process is adhered to and the results are measured.
Executive Sales and Operations Planning (S&OP): Navigating the Economic Storm
Real-time visibility and communication—the cornerstones to navigating through an economic downturn.
A recent McKinsey Quarterly study identified optimized performance management as a potential opportunity to realize short-term revenue and efficiency gains in a slowing economy. The study cites the case of a telco that increased margins by 15 to 20 percent by integrating siloed data and using analysis, scorecards and dashboards to manage performance—all of this was achieved during an economic downturn. (James M. Kaplan, The McKinsey Quarterly, Fall 2008.)
Executive S&OP leverages integrated data from disparate data sources and functional users, dashboards that contain vital KPIs, and what-if scenario planning. The challenge is often how to expedite this process, in order to more quickly gain visibility into front-line intelligence from sales, business drivers and operations. Better, faster visibility and communication not only further organizational efficiencies. They also bring additional benefits to executives: improved strategic, what-if scenario planning and ultimately, organizational direction-setting. In turbulent economic times, the ability to arrive at well-informed and timely, mission-critical decisions requires software that enables the Executive S&OP process—all of which are key to efficiently managing company performance and maximizing the bottom line.
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