Tag Archives: Analytics

Avoid the Most Common S&OP Mistakes: Here’s Our Top 5

Knowing is half the battleIn the wise words of G.I. Joe, “Knowing is half the battle.” And in the battle for sales and operations planning (S&OP) success, knowing where the potential pitfalls lie will serve every company well. Some of those pitfalls were recently outlined by Steelwedge Vice President of Industries Danny Smith in a Manufacturing Business Technology article entitled “The 5 Most Common S&OP Mistakes And How To Avoid Them.”

Recognizing that knowing what not to do is just as important as knowing what one should do, Danny described the following mistakes that companies frequently make in their sales and operations planning initiatives:

1) Lack of executive ownership. The biggest problem I see is the executive leadership team not owning the S&OP process. If executive leadership isn’t fully engaged, the process won’t be as successful. If they aren’t engaged, find out why. Maybe you aren’t giving them the things they need to run the company: forward-looking, global visibility; timely, concise information that is digestible to them (e.g. their KPIs) and that is actionable; the ability to ask “what-if” questions so they can put boundaries around their risk. A good technology platform can help tremendously here. After all, the best people and process can only take you so far. Technology serves as a lever to speed up the process and shift the focus from calculations to analysis.

2) No cross-functional engagement. The whole point of S&OP is getting the entire organization moving in the same direction. That’s hard to do without the involvement of all the key stakeholders in the process. Research around S&OP failures right after the global downturn showed that a third of the respondents didn’t have Sales engaged in the S&OP process. That was the good news! Almost half didn’t have Operations or Finance engaged. Lack of a way to translate between different functional views of information tended to leave one or more participants out of the process. Sales would input revenues by account, Operations would need demand in units by product, and Finance wanted to see net margin. To really make S&OP work, you need to have the same information, but expose it to each stakeholder in the form they need and understand. Even if you start with a quick win/small project, extend the scope to just across the functional boundaries to provide the needed translation.

3) Focusing only on one consensus number. An S&OP mantra for years has been getting to a “one number plan,” but this simplifies things too much. And worse, it limits the value of S&OP for executives. Executives are paid for predictability. It’s their job to identify and proactively mitigate risk – to avoid the danger before it’s a reality. S&OP can be a great tool to help (i.e. GPS telling you to avoid a route due to traffic) but only if you don’t fall into the “one number” trap. Instead, you need to plan in ranges – worst case, best case and expected – all along the S&OP process. The ability to identify the impact of things not going to plan is priceless. As Eisenhower once said, “Plans are nothing; planning is everything.”

4) Complexity! Follow the “keep it simple” principle, especially with metrics. I’ve seen companies become paralyzed trying to make the right decision when they have to evaluate hundreds of metrics; the complexity prevents them from being able to ask the right questions. Pick your big 10-15 metrics (see Figure 1) and go with them. Track them, make performance transparent so everyone understands where they are, and learn from them.

Figure 1: Simple KPIs

Figure 1: Simple KPIs

5) Lack of documentation. How do you learn from your mistakes? You have to capture all the institutional knowledge and assumptions that go into your plans. Provide a mechanism to capture this information from every participant, and make it easy for them to contribute. For example, if you collaborate as a group using social media, automatically capture those chats and the context and embed it into the plan assumptions so you can understand the context of decisions or changes six months later. Remember, those who don’t learn from history are doomed to repeat it.

Do you agree with Danny’s top five S&OP mistakes? What lessons have you learned in your journey to sales and operations planning success? Weigh in with your “war stories” 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?

Gartner’s Tim Payne Follows Up on Top Technology Tips for Supply Chain Planning

On June 21st, Gartner’s lead supply chain technology analyst, Tim Payne, led a thought-provoking Steelwedge Agility Series Webinar on re-thinking technology selection criteria for supply chain planning. In this session, he advocated that the current top two criteria often used –ability to integrate with an ERP system, and general system functionality– are not giving companies enough of an agile, competitive advantage and long term value.  Instead, Tim highlighted three criteria that manufacturing companies should re-prioritize:

  • Technology Architecture
  • Vendor Thought Leadership and Innovation
  • Application Deployment Model


Interestingly, in polling the supply chain leaders participating in the live webinar, some interesting trends emerged:

  • 72% said that technology architecture is very important
  • 55% felt that the most crucial part of vendor thought leadership was to allow them to be able to innovate; 35% said a clear roadmap also mattered
  • 38% said they were balancing a combination of cloud and on-premise technology for planning; 17% plan to change to the cloud and 12% are already ONLY in the cloud.

Following are a few top questions from the webinar that Tim provided additional perspective on:


Q: Historically, companies typically develop process first, then follow with technology. Can today’s advanced technology actually help advance the process development and testing, too?

A: Yes. With some of the newer solutions, the way in which the process is more explicitly mapped and managed within the context of the technology solution, you can test out the process changes. We increasingly see what Gartner calls process templates within planning applications that model different processes.

Take S&OP for example, that tends to look more like a cookie cutter process approach in the lower stages of maturity. Then we’ll morph and evolve into a more company specific process as it goes up through the maturity stages for various reasons. You’re looking for a newer technology–the planning platform—for the ability to help map out those new processes and chart the differences and changes to those.

Q: What are some of the best in class tools for analyzing the 2 year-5 year horizon?

A: Modeling scenarios is key to longer term planning so tools that are good at this are key.  There are two dimensions to scenarios: the ability to socialize the scenarios with the right stakeholders; and  to adequately model the realities of the value chain. You need both of these capabilities to successfully do the necessary scenario work. Also, the tools need to perform the financial impact analysis of the different scenarios adequately so that you can assess the impact of the different scenarios.

Finally, the plans/scenarios have to be reviewed/approved in the context of a suitable process – so some form of process management s going to be needed.

Q: How does technology drive forecasting?

A: A few ways:

  • it helps to establish a common, standardized demand planning process;
  • it helps to automate the number-crunching behind a forecasting process allowing planners to focus on value-add activities;
  • it helps give visibility to demand across a disperse supply chain;
  • increasingly, it will help to analyze ever-increasingly large data sets to help find patterns in the data to drive improvements in forecast accuracy;
  • it helps to integrate demand and supply plans together to drive a balance between the two.

Q: What are the most important KPIs to track with an S&OP Technology?  

A: The KPIs will be different at the different levels of the S&OP process – BUT they will be related and interconnected. At the lower levels of the S&OP process, you want to measure the health of the supporting processes such as demand and replenishment planning. At the higher levels of the S&OP process, you want to measure the financial health of the plans you are reviewing to make sure they marry up to the longer term goals of the company – so KPIs that support an assessment of profitability, cash flow, market share etc. – these types of measures that align with the goals of the corporation.

A huge thank you to Tim for sharing his perspective! Do your planning technology priorities align to this? We’d love to hear from you.

Steelwedge Closes the Agility Gap With New Mobile, Analytics and Big Data Capabilities

I’m excited to announce today that Steelwedge has launched the latest version of our sales and operations planning (S&OP) platform. This new release addresses the growing complexity and volatility that manufacturers are facing, and is designed to help them respond to these challenges with greater agility and intelligence.

Here are a few examples from our customer base that crystallize the kind of planning complexity that we are working to help address with our solution:

• The VP of Sales at a leading European automotive manufacturer needs to respond to a sudden devaluation of the Japanese Yen and regular fluctuations in the Euro.

What will the impact of these changes be on your margin? Should you adjust pricing or re-orient your sales force?  How do you sift through the explosion of information to make a decision? 

• The VP of Operations for a North American consumer electronics company is confronted by the rapid increase in the cost of components from China and disruptions in key parts sourced from Japan.

How do you respond? What is the impact on the bottom line?

Our new release works to solve these kinds of challenges in three ways:

Manage enormous data sets effectively. Making the right decisions for your business requires the processing of data at a scale not imaginable just a few years ago. Steelwedge has made major investments in new, disruptive technologies that enable us to leverage the unique scalability of the cloud to support Big Data requirements—and faster performance—like never before. 

Support rapidly changing business conditions. Our new S&OP Open Apps Architecture enables you to develop your own applications while leveraging Steelwedge planning data. Furthermore, it gives you access to great S&OP Apps created by others. Also, Steelwedge is the only company in the industry to now offer automatic upgrades. Once you have implemented Steelwedge, you will receive the benefits of every new technological development, feature and function without ever disrupting your ongoing operations.

Access insight on exceptions in your plans. The Steelwedge S&OP Insight planning analytics engine delivers fast analysis of your changing business—on an iPad, the web or through Excel. Changes in a plan don’t wait for days, or even hours. Neither should you. The Steelwedge planning analytics engine delivers insights and identifies exceptions in minutes.

Click here for a full set of resources on today’s news. I’m proud of the Steelwedge team that put tremendous thought leadership and thousands of man hours into this new product release. We’re committed to continue to deliver powerful cloud-based solutions for better agility in your business.

Agility Redefined: When S&OP Meets Big Data

Glen Margolis, CEONow that the world’s most sophisticated  companies have started to leverage the big data created by maturing S&OP processes to make better decisions, is S&OP (Sales and Operations Planning) finally coming of age?

A global high tech equipment manufacturer leverages the huge repository of data built on a year of S and OP plan archives to identify subtle emerging customer buying trends. A European consumer products giant taps into its giant S and OP data set to quickly adapt to weather driven supply disruptions.

What’s happening?
Simply stated, the law of convergence is at work—in this case the convergence of advances in information technology, planning process maturity, and increasingly complex, dynamic global supply chains that require a new level of sophistication. Doing analysis on S&OP data is not the same as analyzing historical data in a data warehouse. S&OP data is not just historical archives but also forward looking intelligent plans and scenarios. By merging the forward looking visibility that the S&OP plan provides and the power of analytics, we are providing customers with unprecedented opportunities to prepare for their future whether it is for upside opportunities or downside disruptions.

Organizing the Data
The Steelwedge cloud S&OP solution leverages the processing power of cloud computing and the foundation of information coming from ERP systems to enable the creation of supply and demand scenarios and simulations.  A purpose built S&OP platform leveraging the powerful elastic processing capabilities of the cloud is the foundational building block. After a year of successive planning cycles, an enormous data repository exists and can be mined in context with monthly scenario analysis.

The second key building block is the capability to manage real time mirroring of the Sales and Operations Planning database to create near real time OLAP views integral to planning processes. This, in turn drives predictive analytic and analysis capabilities on top of planning data.

Having established a systematic technology-enabled S&OP process, the third and final building block is harnessing strong analytical talent within the organization. The analytics team must be capable of stepping outside of monthly fire drill and operational challenges and drilling into data to identify patterns, trends, scenarios, and opportunities as part of an overall integrated business planning approach utilizing both historical as well as forward looking data.

Moving Forward
In response to customer requests for us to support this exciting revolution in analytics, I am very pleased to announce that Steelwedge will soon be releasing a next generation advanced analytics module incorporating new technologies and capabilities to support highly scalable, big data driven S&OP analytics. Stay tuned for more information on how you can harness big data to power your planning processes.