Two weeks ago, 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.