As the world grapples this month with the ripples from Europe’s debt crisis, the political turmoil in the Middle East, and the flooding in Asia, companies can’t ignore the imperative to plan for all those scenarios they’d never want to plan for. But have you?
What used to be an annual spreadsheet event is no longer an option for global businesses that have to navigate and course correct for the daily onslaught of economic, political and environmental events that could derail the best laid plans.
Supply chain complexity is multiplying as businesses become more global and interconnected. To remain competitive, organizations are changing how they source , sell and develop products. The rate of product obsolescence in consumer electronics market alone puts business agility to the test. Add to that the disruption and risk that is part of the volatile global marketplace, and business leaders recognize that the “new normal” is likely nothing like last year…or even last month. Agility is imperative; and it is keeping business leaders up at night.
Next week, On December 7th, I look forward to leading a discussion at the Supply Chain and Logistics Summit in Dallas in a workshop I will be presenting there: “S&OP: Enabling Agility and Flexibility in a Global Organization.” Sales and Operations Planning is the ammunition companies require today to combat complexity, respond to market events faster and manage risks. In this session, we will look at how companies need to create an S&OP plan, ensure that it is executed well so that the desired business performance is obtained to gain profits. In other words, S&OP is not only about the strategy but also about how the strategy can be executed.
I hope to see you in Dallas at my session or at the Steelwedge booth ,#9, to…
Steelwedge recently hosted a webinar with Nari Viswanathan, Vice President of Solutions Marketing on the topic ‘Seven Keys to Integrated Business Planning Success.’ The webinar held on October 13th witnessed a huge turnout. There were several questions asked during the session which we would like to summarize and make available for you here:
Q. If Sales is more focused on opportunity conversion, who should build sales forecast and revenue plan? Is that Finance?
A. Sales should definitely focus on building the sales forecast based on opportunity conversion. Finance should focus on building the revenue plan.
In the near-term, Sales should be able to leverage the opportunity pipeline as a somewhat rationalized basis for the sales forecast. Beyond the opportunity pipeline horizon another basis for sales forecast is needed. Depending on accuracy this can take the form of the marketing forecast, the demand plan or in some cases the stat forecast. This also applies to industries that are not opportunity driven. Whatever the basis, it’s important Sales participates in building the sales forecast and has an ownership interest in it. There is no better way to bake the ‘field’ perspective into the forecast.
To reiterate the point expressed in the webinar, S&OP/IBP should really start at the first stage of the order lifecycle. This will bring greater engagement from the sales team.
Q. You mentioned integrating the Third Party Logistics providers into the S&OP process, could you please share with us an example of this and the benefits achieved?
A. An example of this is industries such as apparel which involve a short life cycle in terms of fashion changes or season changes but also involve offshore manufacturing which results in long lead-times. In-transit inventory plays a critical role in these industries because if the demand for products in the short…
Are you struggling with motivating your sales people to invest the effort required to create accurate forecasts? We reached into our archives to unearth a creative way that you can put the competitive sales spirit to work for the benefit of your S&OP process — and have fun along the way too. Devised by Dr. Kenneth Kahn, professor of marketing and director of the da Vinci Center for Innovation at Virginia Commonwealth University, Forecasting Golf brings the fun of golf into the forecasting process, motivating team members to elevate their “game”.
The game’s goal is for an individual player to score the lowest forecast error for the year. A year-long round consists of 12 monthly “holes” that are scored during each forecasting cycle. Attractive prizes are awarded at the end of the game to those who have achieved the lowest scores (i.e., the most accurate forecasts) to reward participation and focus attention on the importance of minimizing forecast error.
Dr. Kahn stresses the benefits of translating statistical language into more understandable form. For instance, a forecast error of 15% does not readily convey if this error acceptable or not. However, when the same forecast is referred to as “par,” then everyone in the company including other department and management levels can readily interpret that error as being acceptable.
Monthly groupings of sales people into scrambles can further enhance the game by offering someone not doing very well year-to-date the chance to still win, and thus, stimulate players to continue their participation in the monthly forecasting effort.
Rules of the Game
True to the game of golf, Dr. Kahn uses the terms eagle, birdie, par and bogey to describe the possible scores for each hole or forecast period. The terms describe a forecast’s proximity to actual sales where eagle is extremely…
Webinar featuring Chris Turner of StrataBridge
Thursday, December 16 at 4:00 p.m. GMT
Register here!
What does Sales and Operations Planning (S&OP) mean to you and your company? Do you know if your demand and supply decisions are in sync with your organization’s strategic priorities? Is it possible to align your S&OP process with the big picture without getting bogged down with the many details in the “process”?
Sales and supply chain decision making is complicated – particularly in today’s era of demand volatility and complex, global supply chains. Every stakeholder in the sales, marketing, finance, and supply chain needs to be queried and considered. Forecasts and assumptions need to be checked, particularly when managers are used to relying on past performance and gut feel. You will likely find yourself spending long hours gathering the necessary data before you can even begin weighing the many sales and supply chain trade-offs at your disposal Is this the best way to spend your time? What if you could optimize the process so that you and your S&OP team can quickly and confidently determine the best way forward for your company?
Chris Turner, co-founder of strategy and change management consulting firm StrataBridge, is set to inspire us to stop fretting about process details and dive right into decision-making mode in a webcast entitled “Forget the S&OP Process … Start Making Decisions!” scheduled for Thursday, December 16 at 4:00 p.m. GMT. You can learn the answers to these questions and more when he teams up with John Sookias, Vice President of International Sales and Managing Director (EMEA) of Steelwedge, to discuss powerful ways to connect strategic planning with operational decision making.
In this webinar, you’ll discover how to view S&OP through a lens of the…
