What does the H1N1 epidemic have that most Sales and Operations Planning (S&OP) processes do not have?   Is this a ridiculous question?   Well, the question is not as ridiculous as it might seem and the answer is simple – H1N1 has the US Center for Disease Control (CDC).  The state of the N1H1 epidemic is closely monitored by the CDC using real-time dashboards, sophisticated predictive metrics, external sensors, and tailored email alerts directed at the medical profession (see below).  However, few global manufacturing companies have the tools to close monitor and manage their sales and operations processes.  And even fewer have the tools necessary to make the right strategic decisions when confronted by a crisis.

What tools does your company have to proactively manage during these highly volatile times?   Not unlike the Center for Disease Control, the mission of Steelwedge Software is to enable companies to proactively identify and manage risk while improving strategic decision making through adoption of a fact-based Executive Sales and Operations Planning process.  In normal times, the outcome of an effective S&OP process is increased asset utilization and improved operational efficiency.  In extraordinary times, S&OP is even more important as it provides a framework and toolset for crisis management.

What is the roadmap to improved S&OP?   Start with a crawl-walk-run approach.  Adopt the basics first– establish a fact-based monthly process.  Automate the demand sensing process and drive collaboration.  Then, establish a system-based rough cut capacity or supply planning process.  And finally, drive an effective Executive S&OP process that enables executive decision-makers to understand strategic trade-offs and proactively respond to business challenges.  Once this end-to-end process is in place and fully enabled.  A comprehensive set of performance metrics, predictive analytics, dashboards, and exception-based alerts can be implemented to improve corporate agility (see below).

Step back…

A question in the minds of many executives in companies running SAP ERP and/or SAP APO is what type of organization would benefit from a Sales and Operations Planning solution (S&OP) solution by a best-of-breed vendor.   Below are some guidelines that can help clients decide if they should also evaluate another vendor’s products before making a decision.

Before outlining the criteria, let’s define the scope of the S&OP solution to include demand planning, rough cut capacity planning, performance management, product life cycle planning and business-planning (revenue/margin). With that scope defined, a company with some the following attributes should also evaluate an S&OP solution from a best-of-breed vendor:

• Has the business need to go live with the solution within weeks rather than years.

• Needs the ability to analyze trade-offs and develop alternate planning scenarios to determine the best outcome

• Currently spends an inordinate amount of time compiling and massaging data into a usable format

• Uses a direct sales force and believes that the ability to transform high level, sales opportunities from their CRM system into detailed, unit-based forecasts will significantly improve the quality and relevance of the demand forecast.

• Has a complex product mix or configured products and needs attach rate forecasting capabilities.

• Wants to create a consensus demand plan by incorporating input from other organizational plans such as new product introduction plan, sales pipeline, finance forecast etc and some of that data exists in non SAP systems such as SFA systems, PLM systems and even ERP systems from other vendors in different divisions.

• Is looking for a secure, integrated solution for sales and operations planning across the enterprise.

• Operates in a changing environment and wants the ability to easily update and evolve their S&OP process (a straightforward mechanism for creating…

Early in 2007, during the high tech industry downturn a major supplier of networking and bandwidth management solutions for telecom service providers, launched a global forecasting initiative to more accurately predict future demand for its equipment. The goal was to better align the operations plan with a more accurate picture of customer demand to improve service levels and reduce potential inventory write-offs.

Historically, company planners had cobbled together forecast data from multiple systems — a problem compounded by mergers and acquisitions— using unwieldy spreadsheets, manual processes spanning multiple departments, and only a minimal amount of analysis. The resulting forecasts were often inaccurate. In the post-boom economy, flexible and accurate planning would not only be critical to stabilizing current operations, but would play a center-stage role in strategic decision-making across the entire organization.

However, solving this problem was no easy task. Like many technology companies, the company begin outsourcing in late 2003. With this business model, forecasting and planning product sales became an even greater challenge– 11 major product lines, 50 product families and more than 10,000 SKUs to forecast for hundreds of customers across the globe. In addition, their products were highly configurable and customized, ever-changing with constant updates. And, many of these configurations had a very short lifecycle—additional creating forecasting complexity.

Further, the company had independent planning processes through various departments: Sales created revenue forecasts; finance created revenue targets; and operations did product forecasts–all different processes usually with different measurements that did not tie together. They were manual processes with no timelines, all managed through a combination of SAP r/3 and Excel spreadsheets. It was difficult to maintain any consistency and data integrity. With minimal feedback between the groups, there always were differences in the numbers.

The Global Demand and Order Management team had to manage day-to-day consensus planning…

I have an old recliner chair that’s so comfortable, I refuse to let it go. It’s various shades of green (much lighter in the seat area) and worn in the usual spots after 20 years of service.

Excel is a lot like that old chair. I’m often impressed by the creativity found in home-grown Excel planning spreadsheets. Typically, an individual has spent months or years to model the company’s forecasting and planning intricacies producing a complex set of worksheets with never-ending links and calculations. The net effect is that this individual is the only one who really understands the model. Obviously, if this wise individual were to leave the organization, the planning tool and process would break down or cease to function at all.

Smart organizations recognize this vulnerability and take steps to establish supportable enterprise-wide tools. And thus starts the internal battle over the apparent need to throw out Excel in favor of a scalable S&OP tool.

Newsflash: You don’t have to choose. You can have a collaborative, scalable S&OP solution and keep Excel. Enterprise Enabled Excel was expressly created to address the need to provide an organization-wide collaborative planning S&OP solution with the familiarity and ease-of-use of Excel as a front-end user interface.

Steelwedge Software provides a planning and forecasting environment using Excel coupled with a world-class, highly scalable, server-based enterprise planning infrastructure. You get all the advantages of Excel without the complexity, long learning curve and inflexibility of a traditional enterprise application.

Imagine a single planning application that offers ease of use, familiarity, power, flexibility, aggegration/disaggregation, qualitative notes tracking, waterfall reporting, offline capabilities, internal and external collaboration, security, scalability, drill down, data integrity, reduced data latency, and an archived Plan of Record.

The Steelwedge solution uses Excel templates supplemented by Internet Explorer (web browser-based) “pop-up” windows as the…