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?
What is your planning data telling you? If it’s not able to answer the following types of questions, you’re selling your business short:
How is our sales funnel impacting our demand plan?
What is the revenue risk if we are below plan?
What is the inventory risk if we are above plan?
Are our channels ready to back up our product launch goals?
This topic will be addressed by EJ Tavella, Vice President, Strategic Sales and Solutions, and Seema Phull, Principal, NorthFind Partners, at the SCOPE Fall conference, which will be held August 11-13, 2013 at the Arizona Biltmore in Scottsdale.
Tavella and Phull’s presentation “What is Your S&OP Data Telling You?” is scheduled for August 12 at 2:00 pm MST and will cover case studies, methodology and technology options to deliver critical data context:
Identify the crux of your key business issues
Isolate a consistent set of data for establishing a starting point
Map the right context to the right initiatives and key stakeholders in your organization
The collaborative nature of sales and operations planning (S&OP) begs the question: Do we need a statistical forecast? Is the “best-fit” engine a dinosaur that ought to be relegated to the past? Many companies ask these questions as if there is just one answer—yes or no. Progressive companies understand that statistical forecasts add value if used in the right way.
Statistical forecasts serve as a starting point based upon non-biased historical patterns. Salespeople are great at adjusting forecasts based upon their market and customer knowledge. Asking a salesperson to create a forecast without a starting value builds in bias from the start and often creates frustration for the salesperson who wants to devote time to pursuing leads rather than creating sales projections. In an effective S&OP process, collaboration builds on the statistical foundation.
But not all statistical forecasts produce a great starting point. Stable historical demand patterns typically produce more reliable statistical forecasts. Conversely, highly volatile demand patterns may produce unreliable statistical forecasts. The key is to identify which will add value. Products can be grouped as being good or bad candidates for statistical forecasting based on volatility and importance. Planning strategies can be assigned based upon segmentation using volatility and importance criteria. Good candidates are statistically forecast while bad candidates use planning approaches such as like item curve fit modeling for new products and reorder point for low volume or erratic demand items.
Statistical forecasting still has a place. To learn more about when and how you should use statistical forecasting, check out our new videos:
While outsourcing manufacturing operations can undoubtedly create distinct cost-saving benefits, it often also brings a loss of visibility and control. When Radisys, the market leader in enabling wireless infrastructure solutions, outsourced all of its manufacturing in 2009, the company found it no longer had a clear picture of its supply. Thus began a sales and operations planning (S&OP) journey that was chronicled in a webinar sponsored by Steelwedge and our partner icon-scm this week. Supply Chain Digest hosted the webinar, entitled “Building S&OP Shock Absorbers for your Business,” in which Dan Gilmore, editor of Supply Chain Digest, interviews Lisa Aleman, Director, Sales and Operations Planning and Control at Radisys.
Lisa shared that after outsourcing its manufacturing, Radisys still maintained visibility into its demand elements, but the supply elements were now managed by the contract manufacturer, rendering it relatively difficult to answer simple decisions such as “Do I have enough supply? Do I have enough demand? Can I commit to certain orders? Can I respond to this customer in a fast time frame?” The company no longer had a single plan of record to inform its decision-making process. Radisys regrouped in early 2010 and charted a course to implement the right infrastructure to maintain supply and demand all in one tool.
The company had several challenges to resolve with the initiative. Radisys’s contract manufacturer operated on a set of objectives and prioritization schemes that weren’t always conducive to what Radisys’ needs were. “To make matters even a little more complicated, we actually had a what I would call a ‘glorified Excel spreadsheet’ that was hooked to an Access database that had about 150 different file splices in it,” Lisa said. “Just generating the demand profile by itself was a problem because that tool basically broke every week, and since there were so many files splices in it, oftentimes we couldn’t even figure out where or what broke, only to have to be back in another cycle.”
In addition, Radisys’s forecasting system at the time was only updated monthly, the contract manufacturer was operating on a weekly cadence, and Radisys was trying to commit to orders on a daily basis. This gap in time frames meant that certain forecast elements were out of sync by two or three months in some cases.
“We were not making decisions and updating things nearly fast enough to cover the telecommunications market,” Lisa said. “By implementing Steelwedge for forecasting we were able to update our forecast in near real time whenever our customer program managers felt the need to do that. We were able to move that forecast into the icon-scm tool, which is where our demand is living, and then share that information with our contract manufacturer. We could get supply responses back all in one tool set, and it really sped things up for us and allowed us to see what our destiny was.” Radisys was able to complete most of the automation of the forecasting tool and the supply-demand tool within six months.
This represents just the tip of the iceberg. During the webinar, Lisa further explains how Steelwedge and icon-scm helped Radisys to:
Optimize decision support with one integrated and synchronized platform
Deliver more current forecasts to its contract manufacturers to enable better
Reduce its forecast cycle time from approximately 2.5 weeks to 1 to 1.5 weeks
Lower CPM input cycle time from 5 days to 3 days
Reduce operations cycle time from 4 days to 2 days
Decrease finance review time from 3 days to 2 days
Accommodate out-of-cycle changes more easily
To learn more about how Radisys acheived these benefits, click here to register and view the on-demand webinar. Does your S&OP process serve as a “shock absorber” that enables you to successfully navigate change? If so, tell us how in the comments.
The strength of a superior sales and operations planning (S&OP) infrastructure lies in its ability to empower a business to absorb and maneuver through the changes arising from external and internal sources. No one knows this better than Radisys, the leading wireless infrastructure solutions provider.
On July 16, 2013 at 8:30 am PDT/11:30 pm EDT, join Lisa Aleman, Director, Sales and Operations Planning and Control at Radisys, and Dan Gilmore, Editor of SupplyChainDigest, as they discuss how Radisys partnered with Steelwedge and icon-scm to manage everything from outsourced manufacturing and global volatility to mergers and acquisitions—and to ensure that the S&OP goals remained in line with overall business objectives.