Tag Archives: executive S&OP

“Scenario Modeling: What Don’t You Know About Your Business?”

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MetroPCS knows a lot about its 9.5 million customers. With churn of smart phones and handsets shrinking annually, this  leading provider of mobile service is all about predicting demand and understanding each of hundreds of features and functions that will sell the best across a portfolio of phones.  But it wasn’t until MetroPCS worked with Steelwedge that if found out that it’s business was not bound by seasonality.

Check out MetroPCS’ video story on scenario modeling to see how they tapped cloud-based planning solutions from Steelwedge to get a whole new perspective on their business.  Ask yourself:  “what don’t I know about my business?”

 

It’s Storm Season: Is Your Supply Chain Insurance in Place?

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It took only minutes in 2011 for natural disasters to break apart supply chains that took global companies 30 years to build.

As a result, companies worldwide moved supply chain insurance to the top of their corporate agendas.  Supply chain/business interruption losses are the largest unknown; but for context, already insured companies incurred more than $55 billion in losses in 2011. Today companies can insure carry up to $1 billion in supply chain insurance, ranging in cost from 2% to an undisclosed a la carte pricing determined by presented risk.  Supply Chain insurance went from a “nice to have” to a matter of national criticality, as evidenced by a Presidential directive in January this year, when President Barack Obama directed the Departments of State and Homeland Security to come up with a plan to protect the $14.6 trillion U.S. economy from interruptions in the supply chain. The White House released a National Strategy for Global Supply Chain Security to make recommendations on identifying risks and making commercial infrastructure more resilient.

“We have seen that disruptions to supply chains caused by natural disasters — earthquakes, tsunamis and volcanic eruptions — and from criminal and terrorist networks seeking to exploit the system or use it as a means of attack can adversely impact global economic growth and productivity,” President Obama said in a letter earlier this year.

Are you insured for Storm Season?

As companies swept up and wrung out after the carnage to their bottom lines, it is understandable that they’d want a policy to help pay for the damage. Yet, that is only part of a smart insurance plan.  In fact, just like the medical industry has evolved to drive a heavy pre-emptive care agenda to boost healthier living and mitigate avoidable health issues, so too should businesses explore pre-emptive supply chain insurance.

Indeed, many are.  According to International Data Corporation, a leading technology research firm, the #1 supply chain “solution” for manufacturers is Sales & Operations Planning.  S&OP –a process established nearly 30 years ago –uniquely unites together people and process to better balance supply and demand. Yet,  over the past decade—driven by global business volatility—S&OP has garnered a new level of attention and leverage

What is leadership, anyway?

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The verdict is finally in. After two years in the making, Gartner recently published its Marketscope report for S&OP.  And, Steelwedge was once again positioned as a leader in this market landscape summary report.

While the industry recognition is gratifying, we think leadership is about continuing to think ahead of the market:  to set the bar, and to deliver on solutions that help pave the way.  At Steelwedge, we believe in the importance and potential of technology-enabled process design to power Integrated Business Planning.  And we believe in simplicity and speed in delivering those solutions– most readily realized through the cloud.

Business Context

Dramatic changes in the economy and global operations have changed how planning operates in organizations. A well-organized Supply Chain process can enhance sales, operations, finance and other functional areas of an organization. Incorporating collaborative inputs from customers and suppliers into the planning process is instrumental in today’s highly outsourced supply chains. This is the reason why many organizations are increasingly focused on advancing the leverage they get from their planning processes to enable cross-functional and multi-enterprise visibility.

Leading the Way to IBP

At Steelwedge, we’re helping to lead the journey to the most agile, collaborative form of planning. Gartner calls this Level 4 S&OP, or Integrated Business Planning.

From our deep experience with large global manufacturers, we see seven key success strategies for successful  IBP:

  1. Engage sales and marketing
  2. Link financial plan to the operational plan
  3. Ensure cross functional and multi-enterprise collaborative process
  4. Continuously align strategy with operations
  5. Ensure process agility and flexibility through technology
  6. Capture metrics for performance management as part of the process
  7. Optimized demand-supply-finance balancing

 

Single Platform, Purpose-Built for Planning

Highlighted in the Gartner report, the Steelwedge Integrated Business Planning solution is a single, cloud-based platform with modules that enable companies to engage at any stage of their planning maturity, including: S&OP Sales, S&OP Operations, S&OP Collaboration and Executive S&OP. Further, we’ve added a Service Delivery Platform to dramatically lower implementation cycles.  Indeed, Gartner highlighted Steelwedge for its broad range of S&OP support from early demand and supply balancing through collaboration and orchestration, and also called out our roadmap for continued delivery.

We take seriously our responsibility, as a leader in business planning solutions, to continue to drive value and drive the agenda in this exciting space.  We’d love to hear from you on what planning leadership means at your organization.

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.

 

Time is the New Currency

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This week, the Wall Street Journal pegged it: Global companies took years building supply chains. In 2011, natural disasters took just days to break them all apart. Like it or not, VUCA (volatility, uncertainty, complexity and ambiguity) is the new normal, and more than ever before, time is the new currency.

Here’s what I mean by that: with the rapid outgrowth of linear supply chains into multi-enterprise networks, loss of control and visibility have become the top challenges for many supply chains. Proliferating risks in the demand-supply network and increasing lead-times due to expanding networks makes flexibility the key to overcoming challenges.

This was indeed a hot topic at the latest trade show I attended, Supply Chain Logistics 2011, where the theme was agility and flexibility.  Leaders of supply chain strategies and leading global companies were on hand to discuss, debate and deliver ideas about how they—and the industry at large—can tap different approaches, such as Integrated Business Planning, to ensure they are more agile. It is imperative that they are able to beat the clock and deliver better returns to their companies in a world where VUCA reigns and no one has the luxury to sit out the storm and wait for smoother seas.

Well known risk management expert, Yossi Sheffi of MIT drove a fascinating discussion on resiliency. He used case studies to highlight examples of enterprise resiliency in the face of unexpected “Black Swan” disruptions. Gerry Smith, Global VP of Supply Chain at Lenovo, brought home the message with real-life examples of the challenges Lenovo faced during the Japanese Tsunami and the Thai Floods of 2011.

Think of it this way: you advance your planning process with flexibility; you protect your business with agility. While both flexibility and agility have short-term and long-term results, it is no longer enough to focus primarily on the short-term benefits. There is a limit to the strategies and tactics that companies can adopt in the short term within the lead-time.  To optimize the new time currency, you must be able to look at strategic scenarios and analyze longer term tradeoffs based on the market conditions within the lead-time. This mix of strategic and operational scenario management has become mandatory due to the rising complexity of supply chains.  Sales & Operations Planning provides the ideal balance: an antidote to volatility.

What do you think? Are you capitalizing on time?

Visit the Steelwedge community on LinkedIn to share your views or to discuss the topics in this blog post.