Sales and Operations Planning Software
H1N1, Sales and Operations Planning (S&OP) and your Doctor
What does the H1N1 epidemic have that most Sales and Operations Planning (S&OP) processes do not have? Is this a ridiculous question? Well, the question is not as ridiculous as it might seem and the answer is simple – H1N1 has the US Center for Disease Control (CDC). The state of the N1H1 epidemic is closely monitored by the CDC using real-time dashboards, sophisticated predictive metrics, external sensors, and tailored email alerts directed at the medical profession (see below). However, few global manufacturing companies have the tools to close monitor and manage their sales and operations processes. And even fewer have the tools necessary to make the right strategic decisions when confronted by a crisis.
What tools does your company have to proactively manage during these highly volatile times? Not unlike the Center for Disease Control, the mission of Steelwedge Software is to enable companies to proactively identify and manage risk while improving strategic decision making through adoption of a fact-based Executive Sales and Operations Planning process. In normal times, the outcome of an effective S&OP process is increased asset utilization and improved operational efficiency. In extraordinary times, S&OP is even more important as it provides a framework and toolset for crisis management.
What is the roadmap to improved S&OP? Start with a crawl-walk-run approach. Adopt the basics first– establish a fact-based monthly process. Automate the demand sensing process and drive collaboration. Then, establish a system-based rough cut capacity or supply planning process. And finally, drive an effective Executive S&OP process that enables executive decision-makers to understand strategic trade-offs and proactively respond to business challenges. Once this end-to-end process is in place and fully enabled. A comprehensive set of performance metrics, predictive analytics, dashboards, and exception-based alerts can be implemented to improve corporate agility (see below).
Step back for a moment - is S&OP with its associated metrics, dashboards, alerts and warning indicators that different than what the CDC has created to manage the H1N1 epidemic?
Improving Business Performance with Sales and Operations Planning (S&OP)
Effective Sales and Operations Planning (S&OP) measurably improves margins. However, historically, S&OP relied on backward-facing shipment data, subjective opinion, and incomplete operational data. It was overly complex, costly, time-consuming, unreliable and inaccurate.
Now, technology-enabled S&OP processes drive a practical S&OP process, systematically integrating people, processes and data, and restoring confidence in the forecasting and planning processes. Effective technology-enabled S&OP guides participants through a workflow-driven, collaborative process, resulting in a highly accurate aligned forecast and plan that all functions and trading partners can trust. With solutions such as Steelwedge Compass Express S&OP planners can quickly adapt resources to changing conditions, significantly increase margins and dramatically improve revenue predictability. The key is the adoption of a flexible, easy to use, collaborative, and comprehensive solution.
Improve Revenue Visibility
Two-thirds of Fortune 500 companies have no formal way of aligning supply and demand based on corporate-wide inputs. Unscientific approaches result in poor focus of organizational resources like capacity, manufacturing, staffing, sales efforts, finance and budgets. The overall Sales & Operations Planning (S&OP) process suffers in turn. Creating true revenue visibility not only requires strong analytic support, but also the automation of systematic and automated processes for soliciting feedback and creating agreement among multiple parties
Create a Profitable S&OP Plan
Steelwedge empowers executives to evaluate alternate pricing scenarios, product mixes, and configurations. Once the optimum margin forecast scenario has been identified, promotions, product packaging and configuration, and customer targeting decisions can be even further tuned to drive the most profitable demand plan possible. Through participative processes, sales, operations, marketing, and finance are able to work in unison toward a common goal of selling and delivering the most profitable mix of products. The result is enhanced corporate earnings and more efficient operations.
Increase Corporate Accountability
Most planners point solutions don’t allow you to identify, track and archive multiple plans of record, individual adjustments, detailed accountability statistics, and process measurements. For example, the sales staff is inevitably overshooting and undershooting their numbers. However, they typically do it consistently. What’s needed is a system for tracking those consistent fluctuations and archiving the information for analysis.
Support Emerging Manufacturing Initiatives
Steelwedge is the first S&OP solution that addresses vital emerging manufacturing initiatives, revenue visibility issues, and corporate accountability challenges faced by today’s corporations.
Outsourcing Managing outside suppliers or contractors requires a high degree of collaboration and communication, as well as negotiation skill when dealing with competitive bids for limited manufacturing capacity. Accurately understanding inventory liabilities, managing demand and coordinating forecasts is essential for effective outsourcing.
Postponement Planning In order to understand how many configured products will be sold and to “manage the mix,” manufacturing companies need to dynamically manage product attach rates and connect sales pipeline data to customer buying patterns that are based on historical estimates and analysis of item/component demand.
Lean Manufacturing There is a misconception that with just-in-time (JIT) inventory there is no inventory and hence no need for a forecast. In actuality, accurate forecasts are more important than ever. Suppliers need to know what orders to expect, and specialized components often have long lead times and are not always in inventory. Moreover, regardless of short-term operational requirements, product management, marketing and finance need to plan and invest based on a common set of future assumptions.
Mix Management In today’s volative environment, companies are struggling to understand and deliver the right mix of products, components, and packages. Retailer’s are increasingly bundling products to reduce costs and increase margins while technology players are becoming highly focused on delivering the exact mix of components required by their clients. In this envrionment, the need for an S&OP process that manages product mix and assortment is crucial.
Why has Sales and Operations Planning moved to the forefront?
Over the past six months, Sales and Operations Planning (S&OP) has moved to the forefront of corporate agendas. Why has S&OP – a long established business process for integrating supply with demand to improve decision-making – risen in prominence? The answer is that multiple forces have converged to not only raise the need for improved integrated supply-demand planning to the top of the agenda, but also to make it truly possible:
1. For the first time in the history of S&OP – thanks to cloud computing and other technologies – it is possible for companies to implement and adopt this mission-critical process in a timely manner. The evolution of ERP, CRM and SCM solutions coupled with improved data stores, data integration tools and user sophistication has further driven this growth.
2. The cloud computing approach and the advent of highly specialised S&OP applications means that business users no longer need to rely on weighty IT support to drive their S&OP process. In the past, business users were dependent on internal IT organizations with long lists of competing priorities, disparate platform standards, long capiital budgeting cycles, and limited bandwidth to support such initiatives. Today, thanks to cloud computing and improved integration tools, it is possible to implement an S&OP system in the time it used to take just to order the hardware – as little as 10 to 12 weeks.
3. Oversupply and unpredictable demand in today’s economy coupled with staff shortages are making it more imperative than ever to improve, reduce the latency, and automate the process. If in past years the focus was on supply deliver, today the focus is on tightly matching supply against demand.
4. The high cost and limited availability of credit have put new pressures on working capital and therefore inventory management. The need for more effective inventory management coupled with volatilty in demand make S&OP an essential process for corporate success.
And so, the list of reasons why S&OP has become so hot grows daily. What other items would you add?
OnDemand Sales and Operations Planning in 30 Days for SAP Customers
Steelwedge today announced a new release called “Compass Express S&OP” which offers a highly scalable “out-of-the-box” S&OP solution that can be implemented in less than thirty days. The solution leverages Steelwedge’s award-winning Sales Planning and Performance Management Platform (SPPM) and advanced partnership with SAP. The solution also draws on leading-edge technological developments to usher in a level of ease-of-implementation and ease-of-use never before available.Steelwedge Compass Express S&OP delivers the full range of functionality available in SPPM in a packaged, best practice-based format that expedites implementation, integration and training. Standard functionality includes Executive S&OP, collaborative demand planning, revenue planning, and performance management. The next release of Compass Express will also include direct integration with SAP BusinessObjects Xcelsius and SAP BusinessObjects Explorer for enhanced data analysis, reporting and business intelligence capabilities. Steelwedge Compass Express S&OP also includes standard integration with Salesforce.com (SFDC).
Steelwedge Compass Express was developed in response to growing demand from manufacturing companies in North America, Europe and Asia for an easy, highly cost-effective packaged OnDemand S&OP solution with standard integration into SAP, very low upfront costs, low total-cost-of-ownership (TCO) and a subscription pricing model. “Steelwedge Compass S&OP represents a major milestone for the software industry. Compass Express offers a packaged, OnDemand S&OP solution with standard integration points that enables manufacturing companies to increase planning visibility and improve profitability,” said Glen Margolis, CEO.
Steelwedge Compass Express Release is scheduled for general availability in Q2 of 2009.
Creating Value through Purpose Built S&OP Technology
Many corporations are turning to S&OP to create value by improving financial and operational performance through better alignment of supply and demand. However, the majority applications that claim to be “S&OP” solutions (e.g. excel, demand planning, supply planning, business intelligence…), where designed as “building blocks” to solve only a subset of the S&OP problem. S&OP “building blocks” are critical functions for an effective S&OP solution, however, they where not architected and designed to leverage the full value resulting from a fully technology enabled Executive S&OP process.
To achieve the full benefits of S&OP, a convergence of multiple capabilities within a technology platform is required to enable the process including:
- Centralized Database
- Info Bridge
- Multi-Level Planning
- Multi-User Collaboration Model
- Flexible Business Rules & Formulas
- Workflow
- Performance Management
The Steelwedge OnDemand Executive S&OP solution was designed with a 100% focus on S&OP. It was architected and designed to specifically meet the requirements of an Executive S&OP solution. The Steelwedge OnDemand Executive S&OP solution is built on an enterprise class three-tiered Java platform that embraces the seven key capabilities identified above.
Executive S&OP: A Process Looking for an Application
S&OP continues to gain visibility among global manufacturing companies as a key process to drive improvements in revenue, profitability, customer service and competitive advantage. Unfortunately, many companies are confused about what it is and where it fits. Executive S&OP is focused on the medium to long term planning horizon based on product family volume versus SKU level unit mix. Engaging executive management in a monthly review for a 1-2 hour meeting requires a more aggregate level of planning to drive strategic level decisions around balancing supply and demand.
The types of decisions addressed in Executive S&OP are as follows:
– How much to increase or decrease plant capacity Should we add or delete operational shifts?
– Do we need to pursue alternative global sources of capacity?
– Does our pre-build inventory strategy support our needs looking out 3 quarters?
– What is the best timing for a major new product introduction?
– How does reducing our capacity by 25% impact Revenue and Margin?
Is it practical for executives to log onto an SAP or Oracle ERP, CRM, Demand Planning, Supply Chain Planning, or Business Intelligence application to get answers to the above questions? Do these applications provide the appropriate level of detail in one solution to support strategic level decisions?
Most enterprises do not have a single application with the appropriate level of detail to support Executive S&OP. The primary application used to support the process is desktop Excel, which has many short comings including: manual data consolidation, lack of security, limited version control…
Steelwedge Software (www.steelwedge.com) is purpose-built for Executive S&OP. The application is designed to consolidate data from multiple applications and provide multi-level aggregate views needed for cross functional collaboration and Executive level decisions. Companies that implement Steelwedge have a single application with built in workflow, user security, catalog management, excel user interface, and performance management.yes;”>While Executive S&OP has existed as a concept for many decades, for today’s complex, data-rich, highly collaborative global organizations, application-driven Executive S&OP is no longer a luxury but rather a necessity.
Receive Blog Updates Via Email
Categories
Recent Posts
Archives
- July 2010
- June 2010
- May 2010
- April 2010
- March 2010
- February 2010
- January 2010
- December 2009
- November 2009
- October 2009
- September 2009
- August 2009
- July 2009
- June 2009
- May 2009
- April 2009
- March 2009
- February 2009
- January 2009
- December 2008
- November 2008
- October 2008
- September 2008
- July 2008
- June 2008
- May 2008
- April 2008
- March 2008
- February 2008
- January 2008
- December 2007
- November 2006
Tag Cloud
Demand Forecasting (30)
Managing in a Recession (33)
Sales & Operations Planning (95)
Sales Forecasting (40)
Steelwedge User Forum (20)
Steelwedge Webinar (12)
WP Cumulus Flash tag cloud by Roy Tanck and Luke Morton requires Flash Player 9 or better.