Category Archives: Integrated Business Planning

Why Are So Many SAP and JDA Customers Still Using Spreadsheets for Supply Chain Planning?


SpreadsheetIn a recent article authored by Lora Cecere, she stated that nine manufacturing clients she worked with in the span of a week are all still using spreadsheets for planning—despite the fact that they’ve spent millions on the implementation of SAP and JDA supply chain planning software. So why are few companies using planning software they’ve invested so heavily in?

Per the article, very few companies can use the optimizers within the SAP planning software to run their business. That’s because, according to Lora:

“The software from SAP, with the name of SAP APO, doesn’t meet the line-of-business needs for optimization and visualization. While it met the market requirements for IT integration (and is one of the strongest supply chain planning systems of record),  it has failed to meet the greater business needs for the line-of business user. Yes, the systems are integrated, but the plans are not sufficient.”

Lora went on to describe the situation with JDA, referencing the fact that JDA forced an upgrade when it re-wrote the planning software to a new architecture seven years ago. This presented JDA customers with a clear impetus to migrate to other software, and many did. Lora stated:

“Over the course of the decade, I have watched many JDA implementations be replaced by SAP. The primary JDA solutions still in use are JDA’s transportation software (purchased from i2 Technologies) and the warehouse management software (purchased from Red Prairie). Line-of-business users have found the consolidation of the company difficult. Most of the companies that I speak to are angry that the acquisition has not yielded more.”

Despite the fact that SAP is the market leader based on sales volume, it isn’t providing the kind of leadership or innovation that the user community expects, according to Lora. As a result, frustration has grown, and the opportunities for competitors to step in have increased. Supply chain planning has only increased in importance amid escalating demand volatility and global market complexity. This serves to magnify the marked difference in planning software capabilities. A “rip and replace” approach is not one that most companies want to take, but they want “a system of differentiation that planners could use.” Competitors, then, have an opportunity “to build something that can lay on top of the SAP architecture that can better meet the needs of the line-of-business user.”

All of this has netted one major result, according to the article: the market for SAP supply chain planning software has waned. Lora explains:

“The company has been pushing a Big Data and HANA message, but to no avail. There are few takers.  SAP has also written several applications on the HANA architecture (a database purchased with the Sybase acquisition) that offers the promise of greater scalability and usability. The promises have not translated into a viable product. The company has also stated that the current supply chain planning software, SAP APO, will be re-written on SAP HANA by 2020 making the current software obsolete and requiring a forced upgrade. The user community is not happy. They are pushing back.”

Amidst all of this, major changes have taken place among the leadership at SAP and JDA. Vishal Sikka, the longtime head of technology at SAP has departed the company. Given that Vishal drove the HANA strategy, and he left while SAP is pushing HANA, the impact is significant. And, JDA announced two weeks ago that its CEO, Hamish Brewer, was asked to step down after a 20-year run.

Lora calls for the leaders to innovate, noting:

“There are new kids in town. The market is flush with new best-of-breed vendors. They are not hampered by maintenance upgrades and legacy board issues.”

Steelwedge is proud to count itself among the best-of-breed vendors driving innovation in the planning software space. And, we’re not so new. We have a decade of domain expertise backing our single, cloud Integrated Business Planning (IBP) platform. Steelwedge solutions for sales and operations planning (S&OP) are trusted by many of the world’s leading manufacturers because of our easy-to-use interface, easy-to-access cloud applications and easy-to-configure platform.

What have your experiences been like with planning offerings from SAP, JDA, or other large software companies? Are you still using spreadsheets to handle the heavy lifting? Let us know in the comments.

Does Your Planning Process Leverage Your Sales Pipeline Intelligence?


Bruce Richardson, Chief Strategy Officer, Salesforce.com

Bruce Richardson, Chief Strategy Officer, Salesforce.com

Undoubtedly, companies have a lot of good information in their CRM systems. But they often don’t know how to best use it to manage their entire business, from Sales to Supply to Finance. What they need is a planning tool that enables them to extract, understand and translate the knowledge captured in the sale funnel, along with other demand signals, into actionable insight on how to deliver on-target results.

This topic will be addressed during a Steelwedge-sponsored SupplyChainBrain webinar entitled “What Do Cloud, Your Sales  Pipeline and Your Demand Plan Have in Common?” on April 22, 2014 at 12:00 EDT. Salesforce.com Chief Strategy Officer Bruce Richardson will provide guidance on how to fill the “missing link” in the sales and operations planning (S&OP) process—leveraging the intelligence contained in the sales pipeline to inform the consensus demand planning process.

During this webinar, Richardson will explain how companies can:

  • Provide visibility and insight into significant pipeline changes, assumptions and expectations
  • Aggregate pipeline information for supply/demand balancing and operations planning decisions
  • Translate pipeline confidence into accurate revenue and margin projections for better Integrated Business Planning

The webinar will conclude with a Q&A session during which attendees will have the opportunity to submit live questions to the speakers. Click here to register.

Featured Presenters:
Bruce Richardson, Chief Strategy Officer, Salesforce.com
Ed Lewis, VP, Product Marketing, Steelwedge Software

Program Moderator:
Robert Bowman, Managing Editor, SupplyChainBrain

We hope you can join us for what will prove to be a compelling and informative session. In the meantime, let us know in the comments section if—and how—you’re leveraging sales pipeline data in your planning processes.

Why S&OP Belongs in the Cloud


sales and operations planning softwareHurricanes and tsunamis. Diverse and aggressive competition. Volatile financial markets. Fickle consumers. Uncertainty is clearly the new norm.

Gone are the days of rigid business plans and fine-tuned demand forecasts. Today’s businesses need unprecedented organizational agility to quickly recognize, recalibrate and respond to shifting demand in the face of volatility.

Integrated business planning (IBP) – the next phase of S&OP maturity – aligns sales, operations, finance and other functional areas into a single line of sight, from plan to performance to profit. But how do you achieve the accessibility, collaboration and immediacy needed to act on a unified planning view at the speed of business?

The answer lies in the cloud.

According to Gartner, cloud computing-based solutions, across S&OP and all of supply chain management, are quickly becoming the requirement. Case in point: integrated business planning. IBP requires that executives (and systems) across functional areas – e.g. sales, marketing, operations, supply chain, manufacturing, finance– have the tools and processes to work together. Only a cloud-based platform can quickly deliver on this promise, and here are four reasons why.

#1 Executive Buy-In

IBP requires a connected, collaborative view of S&OP processes across the enterprise to answer pivotal questions, such as the variance between revenue forecast, budget and compensation target by service line; or expected quarterly revenue by business unit. The lynchpin to this connected approach is executive buy-in from all functional areas. Many cloud solutions today allow you to quickly prototype micro applications. This ‘try before you buy’ approach offers a no-risk, hands-on evaluation that can help prove the system’s value and break down resistance to change.

#2 Any Time, Anywhere Access

To truly engage today’s professionals in the process, you need a platform-neutral approach that works on both enterprise and modern mobile platforms, inside and outside of your corporate network. With the cloud, you can leverage existing system investments and easily merge multiple data sources – whether it’s from legacy on-premise ERP, CRM or finance applications or with Software as a Service applications like Salesforce.com – and deliver them on demand to anyone in your organization, anywhere in the world.

#3 S&OP Ecosystem Connectivity

Organizations are dealing with increasing variety and volumes of “big data” coming from internal, partner, customer and social sources. For S&OP, the big data management requirement is exacerbated by the need to look at revenue, product, SKU and component information across a variety of geographies, operating divisions and time horizons, and then roll up that data for review at quarterly, monthly and even weekly increments. This, in turn requires a significant boost in processing power and analytics to make sense of the data for faster decision-making.

Connecting all of this data into planning and understanding how shifts in supply and demand will impact operations calls for scalability and flexibility that traditional on-premise solutions can’t deliver from one platform. With a single IBP platform in the cloud, you ensure a level of always-on elasticity to meet your data demands as they grow. Plus, the cloud’s pay as you go model enables you to scale as your business demands, not as your procurement dictates.

#4 Predictive Analytics

Not only is processing power important for developing actionable plans based on vast amounts of input data, but it’s a critical consideration to allow for contingency planning – a key driver for agility, and the heart of true IBP. Strategic, “what if” scenario modeling enables you to explore a myriad of business scenarios that impact the bottom line. Creating ad-hoc modeling to understand not only supply/demand trade-offs, but also the customer and financial implications of those moves would be cost-prohibitive without the elastic computing power of the cloud.

Final Thoughts

With the shift away from traditional annual or quarterly calendars, S&OP conversations and technologies need to be different. The cloud provides an ideal foundation for modern business plan decision making, allowing you to sense for signals of change and take a tighter look at interdependencies that impact departmental and corporate processes.

The Most Important Performance Measures to Watch in Your S&OP Process


This blog post was co-authored by Jan Veerman and Freek Aertsen, Partners at EyeOn Solutions. EyeOn Solutions is a valued Steelwedge Consulting Partner

S&OP is hot! Looking at the number of publications regarding sales and operations planning (S&OP) the last couple of years compared to the gross domestic product (GDP) growth, we see an increase of the S&OP publications when the growth of the GDP is declining. Less sales drives companies to look at parameters they can influence: their S&OP processes.

S&OP and GDPS&OP and integrated business planning (IBP) are getting more attention. According to the Gartner S&OP Maturity Model, companies are struggling to promote their S&OP processes from Stage 2 (Anticipating) to the next stage (Collaborating). An astonishing 67% of the companies cannot get beyond Stage 2!

So we know it is difficult to manage and mature the S&OP processes. But are we completely left without tools, tips or tricks to make the best of what we are doing right now? Of course not, there are elements to improve in the processes. It all starts with measuring the performance of the important S&OP processes.

Most important performance measures to watch in S&OP processes

What indicators are important in the S&OP processes? A lot! So we have to select the most important ones. Generally, in a make-to-stock environment, these are the most important measures to watch in your S&OP process:

1. Service Level

2. Forecast Accuracy

3. Stock Level

4. Factory Performance

Four S&OP Measures to Watch1. Service Level

The service level measures the performance of the whole logistics organization in meeting the customer service expectation. On Time In Full (OTIF) can measure the service level, and to reach a good OTIF level, all the functions of the supply chain have to work at their best level.

2. Forecast Accuracy

Forecast accuracy (FA) measures how well the company forecasted the demand compared to the actual demand afterward. The better and more consistent forecast accuracy is, the better the supply chain can handle the expected demand (resulting in lower stock and higher service levels).

Forecast error can be measured in many ways. The most popular are Mean Absolute Deviation (MAD), Mean Absolute Percent Error (MAPE), cumulative error and average error or bias (E).

3. Stock Level

Cash is king nowadays! Suppliers want to have their supplies paid at delivery, while your customers extend their payments terms. One way to deal with a possible shortage in cash (because it is also difficult to lend money), is to free up money invested in the stock levels.

By predicting the demand more accurate (see forecast accuracy) and actively managing the stock levels, a reduction of these stock levels can be achieved and generate the valuable asset: cash.

4. Factory Performance

The performance of the factory can be measured according different measures, like CLIP, RLIP or LAP.

Confirmed Line Item Performance (CLIP) is a performance indicator measuring delivery quality, meaning the percentage of order elements that was delivered at the date as committed to the customer.

Requested Line Item Performance (RLIP) is a performance indicator for the degree in which market demands could be met, measured as the percentage of order elements that are delivered by the company at the date requested by customers.

With the factory performance measures as mentioned above, the overall performance of the internal processes can be monitored and give the ability to look for improvement areas.

Integrated software solution

We briefly touched what we believe are the four most important measures to watch in the S&OP processes. Of course there are many more measures to watch, but we need to start somewhere! Start with your journey to become one of the 33% of companies that made the transition to Stage 3 in the Gartner S&OP Maturity Model.

But processes alone will not do the trick. In order to measure, monitor and react, you need also to have systems in place to facilitate these processes. These systems need to be agile to the same extent that the processes do.

Old-school S&OP software packages tend to take too much time to implement, adjust to the specific needs of the customer, and changes to the software afterward are a source of frustration. Truly integrated Cloud tools can make the difference here. Cloud tools have no hardware to setup and maintain and leverage the data already in your operational systems by connecting to the cloud solution, which comes with predefined calculations, analyses and reporting capabilities.

Steelwedge offers a solution that supports a true integrated approach in managing the supply chain, internally and extended to your suppliers and customers. With the discussed four most important measures to watch in your S&OP, supported by tools like Steelwedge, you should be able to make the leap to the next phase in the S&OP maturity model and reap the benefits: better performance, lower stock levels, increased availability and happy customers and partners in your supply chain.

For more information, contact Jan Veerman – Partner, EyeOn Solutions at jan.veerman@eyeon.nl and Freek Aertsen, Partner, EyeOn Solutions at freek.aertsen@eyeon.nl.

Game On! Sony Plans for Biggest PlayStation Launch Ever With Steelwedge


Sony PS4In the world of video-game consoles, the Sony PlayStation is undoubtedly leading the pack. In January 2014, PlayStation 4 (PS4) sales were nearly double that of its nearest competitor. The release of new game consoles comes years after their preceding versions, so significant planning goes into the launch by their manufacturers.

Sony Computer Entertainment America (SCEA) launched the much anticipated PS4 in November 2013. There was high complexity inherent to readying the system in time for the make-or-break holiday season; allocating to the right reseller channels; assembling the right combination of accessories and game bundles; and ensuring the product launches at right price point. Sony used Steelwedge integrated business planning software to connect all the crucial people,  processes and data to help it navigate their biggest launch ever—delivering an anticipated approximately 5 million units in the coming months—without cannibalizing the ongoing PS3 business.

The Steelwedge services team helped fast-track Sony’s internal planning process with the
implementation of the Steelwedge solution in a phased approach. The first phase incorporated demand planning and an executive engagement phase of the total sales and operations planning (S&OP) life cycle.

Phase two involved synchronizing Sony’s new forecasting strength via supply planning and collaboration with Sony corporate suppliers and telescopic planning. Telescopic planning is a Steelwedge feature that enables easy movement between weekly and monthly planning periods, allowing Sony a much closer, more frequent look at impacts to its supply and demand.

“Without the insights we gained from Steelwedge on channel and bundling optimization and well as potential PS3 cannibalization, we wouldn’t had as powerful a launch plan,” said Sree Vaidyanathan, SCEA’s  Director of Business Applications. ”Months ahead of the launch, we sold out $1.7 million in pre-orders. We are planning to sell approximately 5M units of the new PlayStation 4 console by April, and we are more confident in that forecast due to Steelwedge.”

Increased visibility from consensus planning at SCEA translates into better:

Profitability. SCEA forecast accuracy improvement from 60% to high ~90% immediately
drives better profitability—ensuring the right goods at right time and right place. Now,
Sony has enough data insight to push platform and SKUs to channels, more intelligently.

Market Share. Better consensus planning, powered by Steelwedge, helps SCEA make better supply/demand tradeoff decisions, due to more reliable data. The faster to market, the better the market share potential.

Scalability. The cloud-based solution from Steelwedge allows Sony to power its process
in scope with its evolving market.

Risk Mitigation. The proven, secure Steelwedge platform limits Sony’s IT exposure to
risks around data, business continuity and security.

To learn more about Sony’s implementation of Steelwedge, read the full case study here. Do you have any best practices to share around using the S&OP process to enable a successful product launch? Share your insights in the comments section!

Is Your S&OP Ready for 2014?


Touchscreen 2014You and your company may be entering 2014 with an advanced integrated business planning (IBP) process in place. Or you may only be beginning to consider sales and operations planning (S&OP). Whether you’re well on your way, just getting started, or somewhere in between, undoubtedly every company can benefit from improved strategic and tactical alignment and increased agility.

That’s why you should join Steelwedge on Tuesday, January 28 for a free webinar entitled “New Year, New Approach: Take Your S&OP, Demand and Supply Planning Processes to the Next Level in 2014.”

Frank Kang, Managing Director, KPMG

Frank Kang, Managing Director, KPMG

During this webinar, Frank Kang, Managing Director, Supply Chain and Operations Advisory Services, KPMG, will address the many opportunities that best-practice S&OP processes and technologies offer. What happens when you capitalize on these opportunities? You meet financial targetsstrengthen customer relationships and establish accountability within your organization by integrating your demand/supply planning with long-term strategic business goals.

You will learn:

  • The questions to ask when evaluating the effectiveness of your planning processes and deciding where and how to start on an effective IBP journey
  • The opportunities offered by the right technology to continuously improve your business planning processes
  • Examples from leading companies who have embarked on a self-improvement journey and have succeeded in taking their planning processes to the next level

What are your S&OP plans for 2014? Let us know in the comments.

S&OP Beyond the Basics: Q&A Part 1


More than 800 people registered for a terrific conversation with industry pundit and author, Tom Wallace.  We simply ran out of time to answer all the questions live, so have captured common themes and answered them here. This is the first of a two-part series.

Q: How do you best manage the proliferation of S&OP meetings? People inherently object to having meetings for meetings sake!

It is important to differentiate between meeting and working sessions. Executive S&OP meetings are intended to be very efficient and structured, given the CXO level participants. These meetings should have a very specific agenda with clearly defined goals for the meeting.

Working sessions are more of a combination of structured agenda as well as unstructured time to discuss collaboratively on various topics. Demand review and supply review meetings are examples of these working sessions.

From a technology perspective, the solution should provide the ability to document business context, assumptions, action items and opportunities for further follow-up and tracking.

Q: How do you handle “what if” analysis & scenario analysis within Steelwedge?

Steelwedge provides a platform that balances supply, demand and finance and enables the end-to-end S&OP process. Scenario management and what-if analysis can be implemented at any stage of this process: demand forecasting, supply planning or executive S&OP. For example, as part of the out of the box application called Compass Express that is implemented by this platform, 26 scenarios can be created as part of the Executive S&OP process. These scenarios can be compared based on pre-defined metrics and the best scenario can be ‘promoted’ to be the plan of record for the organization.

Q: How do you do the Bill of Material explosion and how is SW exploding the confirmed demand plan to material requirements?

The Steelwedge S&OP platform has the ability to model both a standard bill of material as well as a statistical bill of material (attach rates).  As part of the Rough Cut Capacity Planning process, the consensus demand forecast at a finished goods level is converted into material requirements at a component level for the purpose of performing a build-versus-buy decision using the sourcing template. In cases of configured products,  the dependent as well as independent demand associated with components is computed as part of this process.

Q: S&OP is limited to quantitative views of supply and demand. How do you validate qualitative assumptions about external factors?

Steelwedge estimates that only about 50% of the decision making at S&OP meetings is based on quantitative factors – the rest of the decisions are made based on tribal knowledge or ‘gut’ feel. It is important to capture these decision factors as part of the process so that the validity of these assumptions can be tracked later. It is expected that over a period of time these assumptions are re-evaluated and quantitative approaches are incorporated instead. We understand that collaborative planning and S&OP is never going to be completely fact based and that the solution should support the ability of the end users to make informed decisions based on data as well as qualitative factors.

Q: How do we get end users more engaged in the process. What kind of reports / alerts are commonly presented at S&OP meetings?

Excel continues to be the most commonly used business planning tool. That is why Steelwedge provides a platform that utilizes Enterprise Enabled Excel, which powers the S&OP process on top of the Excel application. A familiar paradigm is one way to get end users more engaged in the process.

Another common problem that sales reps face as part of S&OP process is that they are asked to input data into very complex Demand Planning applications, resulting in loss of interest and use.  Also,  sales people are often completely mobile and don’t have the internet bandwidth to provide inputs into these Demand Planning applications.  Steelwedge addresses this two ways:

a) One Click Planning provides an event driven push based mechanism to alert sales executives of areas that require their input. When the users click on an email that they receive from the application, they are taken directly to a template that they can fill out for products that they have access to.

b) Offline tools – this allows sales reps to input data without being connected to the internet. Once they log into the internet, they can do a net change submit to the server to sync up the data.

Is Your Sales Pipeline Connected to Your Demand Plan? It Is Now With Salesforce.com and Steelwedge!


sales_pipeline_bridge_lpWhat happens when you pair the leading provider of cloud-based sales and operations planning (S&OP) solutions with the enterprise cloud computing leader? Your employees, customers and trading partners get connected in a whole new way.

No one is more enthusiastic about enterprise cloud solutions than we are here at Steelwedge, except perhaps our partner, salesforce.com. Steelwedge understands the power of partnership, and that’s why we’re so pleased to be an official salesforce.com ISV partner.

As development and testing of our new solution wraps up (Stay tuned: Sales Pipeline Bridge will be available on the AppExchange in early 2014!) we are preparing our customers for the integrated business planning (IBP) journey of a lifetime.

The Sales Pipeline is the “Missing Link” in Your S&OP Process (view the video here!)

Every company would love to have a scenario where they use a single system that:

  1. Reviews all sales pipeline data
  2. Provides alerts for significant pipeline changes
  3. Systematically manages and links sales, marketing and operations plans


The hard truth, however, remains that most companies have separate and manual tools and processes that put them at risk for inaccurate forecasts, delayed—or worse yet—lost sales, and lost productivity. What they need is a planning tool that enables them to extract, understand and operationally act on the critical information in their sales funnel

Collaboration at its Best

Steelwedge 100% cloud-based S&OP solutions are used by customers across the globe and across industries. Sales Pipeline Bridge enables a new and unparalleled level of S&OP collaboration by incorporating critical sales opportunity information from salesforce.com into the planning process.

After all, who knows better about what—and when—customers will buy than your sales team? No one.   They are your first line of sight into customers and prospects. They know where the opportunities arise, the competitive landscape and what challenges your product can solve.

Sales Pipeline Bridge systematically captures that critical sales opportunity information from salesforce.com, transforming it into a view that is meaningful for Finance, Product Management and Operations alike. Silos? Gone. Fragmented systems? Eliminated.  Better performance and forecast accuracy? Check!

The Final Word

Dynamic, competitive markets have changed the game. We all live with this challenge every day. Our new AppExchange solution will not only keep customers in the game, but help them play to win.

For more information on Sales Pipeline Bridge, click here.

What kinds of challenges do you have connecting your sales pipeline data to your demand plan? Let us know in the comments!

Do You Have Planning Insight? Collaborative S&OP Requires Easy Access to Data and Analytics


Chances are you’re collecting volumes of data to manage your business. Most companies today amass veritable mountains of digital details on how their business has performed in the past in the form of reports, customer feedback, trading partner metrics, and KPIs. They also collect sales and operations planning (S&OP) data on how it should perform in the future via demand plans, supply constraints, and statistical forecasting metrics. But are you adept at culling through this data at any time to optimize where you are NOW?

At Steelwedge, we have a perspective that your planning data ought to be able to tell you, anytime and on any device, the impacts of supply/demand tradeoffs based on your current business reality. That insight powers S&OP and comes from a blend of both historical and forward-looking planning data for real decision-making context. And your entire team must be able to access that data in a single plan of record to enable truly business-transforming collaborative S&OP.

Simply put: business parameters change and plans—and people—have to flex with them. Check out this video about Bob and his quest for better S&OP insight. Only his animated form is two-dimensional. His business planning needs are not. Seem familiar?

We’d love to hear from you about your journey to get better planning insight. Can you keep your business plan on course even when you know it will occasionally go off road?

The Role of Statistical Forecasting in S&OP


The collaborative nature of sales and operations planning (S&OP) begs the question: Do we need a statistical forecast? Is the “best-fit” engine a dinosaur that ought to be relegated to the past? Many companies ask these questions as if there is just one answer—yes or no. Progressive companies understand that statistical forecasts add value if used in the right way.

Statistical forecasts serve as a starting point based upon non-biased historical patterns. Salespeople are great at adjusting forecasts based upon their market and customer knowledge. Asking a salesperson to create a forecast without a starting value builds in bias from the start and often creates frustration for the salesperson who wants to devote time to pursuing leads rather than creating sales projections. In an effective S&OP process, collaboration builds on the statistical foundation.

Statistical-Forecasting

But not all statistical forecasts produce a great starting point. Stable historical demand patterns typically produce more reliable statistical forecasts. Conversely, highly volatile demand patterns may produce unreliable statistical forecasts. The key is to identify which will add value. Products can be grouped as being good or bad candidates for statistical forecasting based on volatility and importance. Planning strategies can be assigned based upon segmentation using volatility and importance criteria. Good candidates are statistically forecast while bad candidates use planning approaches such as like item curve fit modeling for new products and reorder point for low volume or erratic demand items.

Statistical forecasting still has a place. To learn more about when and how you should use statistical forecasting, check out our new videos:

What Is Statistical Forecasting?

Statistical Forecast Analysis

A Best Fit Engine for Forecasting

How is your company using statistical forecasting? Let us know in the comments section.