Tag Archives: collaborative S&OP

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

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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.

What Do S&OP and Football Have in Common?

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The requirements for successfully conducting business today are not unlike the qualities that a football team needs to be triumphant on the gridiron. Both face diverse and aggressive competition. Both require the agility to make adjustments mid-stream, in response to changing requirements and environmental dynamics. And both must use historical information to make decisions while also anticipating what will happen in the future.

Applying what we know about winning on the football field to find success in the sales and operations planning (S&OP) process served as the topic of a recent Supply Chain Digest article authored by Steelwedge CEO Glen Margolis. In the article, Glen outlines five strategies that both S&OP and football teams must take to win:

  1. You have to know—and play—your role
  2. Establish a common goal—and communicate regularly about it
  3. Have a plan—and a contingency plan
  4. Ensure your equipment employs state-of-the-art technology
  5. Manage by the metrics

Ultimately, on the football field or in S&OP, winning requires leadership, visibility, teamwork, accountability, and agility. Click here to learn more about the best-practice parallels that Glen draws between S&OP and football. Do you have any other comparisons that you can add to the list? Let us know in the comments!

Guest Perspective: More S&OP Q&A’s with Oliver Wight

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Ed. Note: In today’s guest post, Eric Deutsch, principal with Oliver Wight consulting, provides some additional insights into their method of sales and operations planning, answering some of our most-asked questions. You can also see earlier thoughts on S&OP here. For more from Eric, see our June webinar, Developing Corporate Muscle Memory with IBP

  1. Are you working with any aerospace companies and what is different about handling them? Yes, several aerospace companies have implemented S&OP. According to my colleague Jim Correll, “Aerospace companies have the same challenges that other companies have when it comes to IBP.  Adapting IBP to the multitude of  organizational structures that we encounter in aerospace companies and other types of industry is always a challenge.  What we do find is that forecasting in aerospace companies that are  suppliers to the large airframe manufactures and military contracts is easier because their schedules are typically much firmer than in other industries.”
  2. In a Consensus forecast, how do you reconcile high expectations of the Marketing people with the statistical forecast? Especially with highly variable demand, both intermitent and highly volatile.First, there is a place for statistics, and it typically doesn’t work well in highly variable, volatile, and sporadic environments. If the highly variable demand is associated with low volume/revenue products, you may want to ask yourself “Why am I in this business? What will we do to get these products moving?” If the highly variable demand is associated with high revenue “big hits”, then you have to get closer to the customer and get more demand information from them. Second, you want to turn “expectations” into “PLANS” and hold people accountable for results. As words, “forecasts”, “guesses”, and “expectations” have no accountability behind them and shouldn’t be used to drive business decisions. A “plan” (i.e. Demand Plan, Supply Plan) means that you have activities in place to achieve that number (plan the sale and sell the plan) and that you should be held accountable to execute on those activities to achieve the plan. Every month, you “re-plan” in IBP by reviewing the latest information, changes since the last cycle, and gaps to strategic objectives. It’s amazing how much better people become at planning when they are held accountable for hitting the plan…not over, not under, but HITTING the plan. Sometimes, folks are rewarded for exceeding the sales plan. “We hit 125% of plan!” Great for the top line…but often the supply chain suffers because they were scrambling to fulfill demand that nobody told them about, typically at a higher cost. Plan the sale and sell the plan and use shared tactics (e.g. inventory, lead times, capacity) to handle variability.

 

S&OP Beyond the Basics: Q&A Part 2

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As part of our commitment to drive engaging dialogue in the industry around the best and ‘next’ practices, Steelwedge recently teamed up with Sales & Operations Planning expert Tom Wallace to host a webinar. ‘Taking S&OP to the Next Level’ is based on the new book, Sales and Operations Planning: Beyond the Basics. You can watch a recording of the webinar here if you missed the live event. Given that S&OP is a top priority for companies to tackle volatility, the Steelwedge webinar drew a huge attendance and just as many questions! Due to time constraints, our experts couldn’t answer all of them.

In this blog post, Tom Wallace answers some key questions from his perspective.

Q. Is S&OP ideal for large organizations which have their own manufacturing, inventory & products? Is S&OP applicable to a service company?

Yes to both. Some of the most successful users of S&OP are large organizations with manufacturing, inventory and product: BASF, the largest chemical company in the world; Procter & Gamble, the largest consumer packaged goods company; and Staples, a very large on-line retailer. S&OP has been shown to work well in organizations that don’t make physical products as well: banks, central engineering staffs, IT departments and the like.

Q. Should the same forecast drive both manufacturing and profit and loss?

Absolutely. The forecast, once authorized, becomes the one and only one statement of future demand. Only with this can you achieve a “one-number process,” which means running the business internally with one set of numbers.

Q. How do you balance continuous improvement to the S&OP process against over-engineering the process?

Listen to the people actually using the process, including senior management. The best way I know to drive continuous improvement is, at the end of each executive meeting, ask each person present to rate the meeting on a scale of 10 and give 50 –or fewer– words why, finishing with the leader of the business. Those people will tell you where to improve and where not to.

Q. What is the best approach to organize promotional activities in the forecast process?

Within the 5-Step Process of S&OP, Step 2 is Demand Planning; this includes the addition of promotions and related activities by people from organizations like Marketing, Sales Promotion, and Merchandising. The promotions are added to the forecast early, well in advance of the consensus forecast going to Step 3, Supply Planning.

Q. What are the main pitfalls if you are in an S&OP process implementation?

The primary pitfall, much greater than all others, is to fail to educate the people in S&OP. Note the use of the word “educate” rather than “train.” That’s deliberate: training tells people how to run the software; education addresses how to run the business using this new tool.

Please write to us at info@steelwedge.com should you have any questions or need elucidation on any of the concepts mentioned in this blog.

Have a Happy New Year!

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

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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.