2011 June | Perspectives on Sales & Operations Planning

Paul Intrieri, Director of Business Development, represented us at the APICS/IBF Best of the Best Conference in Chicago last week…

“I’m happy to report that there seems to be no end in sight to the swell of large enterprise interest directed at both raising corporate competency around Sales & Operations Planning, and accepting how mission critical cross-company collaborative planning is to enterprise competitiveness.

We had the opportunity to speak to leaders in most every major industry vertical including Pharma, CPG, Chemical, Communications and Technology, Raw Materials, Healthcare and more - from as far away as northern Europe. Many innovative tweaks to the classic 5-step process were discussed and a common theme became evident. As much as there is no one textbook practice that can fit all companies or business units in a company, clearly S&OP is being embraced as the process “to run your business by”. That said, with the speed, complexity and high variability of today’s global markets, it was also clear that planning off spreadsheets is just neither dynamic nor robust enough to enable enterprise class S&OP or the informed exception-based proactive executive decision making it is intended drive. From our standpoint it’s nice to be in a place where we can say yes to virtually every request we fielded. Scenario modeling, financial integration and reconciliation, new product launch tools, item through aggregate level transparency and reporting are all things we provide standard and that were part of every conversation I had.

I would say that if you’re like the many companies we encountered in Chicago and need to get away from planning off spreadsheets we’re a perfect solution to consider.”

Steelwedge has made a commitment. We will reduce carbon emissions by 100 million tons over the next decade.

How will Steelwedge enable its customers to reduce their carbon emissions? While this may seem a rather daunting, even absurd goal, the Steelwedge team has over a decade of experience reducing inventory levels, improving transportation network efficiency, and driving down inventory waste through the adoption of world-class, technology-enabled business planning practices. For example, several of our Fortune 100 customers have reported inventory reductions of as much as 18% through adoption of the Steelwedge cloud-based sales and operations planning (S&OP) solution. This has a direct impact on reducing carbon emissions. Our best estimate is that a company that adopts world class, technology-enabled business planning practices should expect to reduce their carbon footprint by up to 10%.

So what’s the context? Under the ill-fated Kyoto Protocols, originally drafted in 1997 and revisited in Copenhagen in 2009, it was envisioned that the United States would reduce its emissions by 17% or approximately 991 million tons. Globally, the reduction would have to be 5.2 billion tons. An equally ill-fated attempt to pass a US Senate bill in 2010 incorporated similar goals. Globally, a goal has been to reduce carbon emissions growth to reduce the global growth of carbon emission such that global carbon production does not exceed 40 billion tons (gigatons) in 2020. Why is this a challenge? Developed countries would have to cut their emissions by 25 to 40 percent by 2020 over 1990 levels, while developing countries would have to slow their emissions by 15 to 30 percent below current forecasts.

How does the Steelwedge carbon emission target relate to industrial manufacturing? Our goal is to reduce global emissions of industrial carbon by 0.9%. This equates to a 0.3% drop in total global carbon output. Today, industrial managing accounts for approximately 36% of all global emissions or 11.1 billion tons annually. However, the dependence on industrial manufacturing varies greatly across regions with 47% of the Chinese economy devoted to industrial production versus 22% for the US and 25% for the EU. For the US, carbon emissions associated with industrial production, by some estimates, is approximately 1.3 billion whereas the Chinese manufacturing industry is estimated to emit well over 3 billion tons of carbon per year.

What’s next? In the coming quarters, we will further discuss this important initiative. We’ll relate it to the many business planning challenges our customers face in today’s volatile and competitive world, and we’ll identify world-class risk management, inventory reduction, and value chain network planning opportunities that directly equate to an improved bottom-line and reduced emissions.

Additional Sources:

Climate: 75 Countries Set Carbon Emission Targets for 2020. The Independent | News | UK and Worldwide News | Newspaper. Web. March 31, 2011.

Custers, Peter. “OP-ED: Global CO2 Emissions Reach a New Record High.” IPS Inter Press Service. Web. 10 June 2011.

Industry CO2 Emissions. Global Warming, Climate Change, Greenhouse Effect. Web. 31 March 2011.

List of Countries by Carbon Dioxide Emissions. Wikipedia, the Free Encyclopedia. Web.

List of Countries by GDP Sector Composition. Wikipedia, the Free Encyclopedia. Web.

Morales, Alex. “Kyoto Protocol Faces Gap After Emissions Targets End, UN Chief Says” Bloomberg – Business & Financial News, Breaking News Headlines. Web. 6 June 2011.

Smith, Brendan “Are Progressives in Denial About Climate Change?” The Huffington Post. Web. 10 June 2011.

Supply Chain Management – Master Carbon Management. Upload & Share PowerPoint Presentations and Documents. Web.

TreeHugger. “World’s Nations Set Emissions Reduction Targets: Who’s Pledging What?“ AlterNet. Web. 1 Feb 2011.

Industry CO2 Emissions. Global Warming, Climate Change, Greenhouse Effect. Web. 31 March 2011.

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