We’ve recently announced the release of a ground-breaking solution for improving the speed, flexibility and ease of implementing and adopting the Steelwedge Cloud-based S&OP solution.

The Steelwedge S&OP Service Delivery Platform dramatically enhances the ability of our clients, partners and users to rapidly configure, integrate, implement and train users on a process-driven collaborative Steelwedge S&OP solution.

S&OP has quickly become a management necessity for companies operating complex, global supply chains in today’s climate of uncertainty and risk.  Executives facing pressure to manage volatility and risk have embraced Steelwedge to align demand and supply decisions with revenue, margin and customer service goals.  Companies that have rolled-out best-in-class S&OP practices have realized big gains, including a year-over-year gross profit margin increase of 48 percent, according to a recent study published by Aberdeen Group.

“In today’s volatile world, companies need to rapidly respond to changes in supply and demand as never before.  The Steelwedge S&OP Service Delivery Platform is truly a breakthrough for companies desiring to rapidly implement and adopt a flexible S&OP solution that drives corporate agility.” explained Glen Margolis, CEO of Steelwedge. “This new technology platform enables companies to quickly and cost effectively adopt globally collaborative S&OP processes.”

To learn more about our cool new technology, visit our web site.

In her post, “ENOUGH!”, Lora Cecere states that Integrated Business Planning (IBP) and Sales and Operations Planning (S&OP) are in a “battle of acronyms” and that this “holy war cannot be won”. I agree, let’s not get stuck on names. At the same time, the S&OP/IBP debate is a happy consequence of the fact that S&OP remains a living organism that is maturing quickly. Firms like Oliver Wight and Aberdeen Group have lobbied for the adoption of the new term, IBP. The push to change the name is meant to highlight the importance of adding new elements to the S&OP equation such as demand sensing and steering, financial integration, robust modeling and scenario planning, and profitable demand and supply decision making.

At Steelwedge, we agree that IBP developments are fast becoming imperatives and that S&OP must not be viewed as a mere supply chain activity but as a strategic management process that considers all elements of the business across a 24-month planning horizon. In fact, by its current definition, many of our S&OP customers are enjoying the full benefits of best-in-class IBP with the help of our technology. Although we see IBP as a logical next step for many companies practicing S&OP, we remain focused on helping our clients design, automate and support processes that are the “right fit” for their business. Adherence to best practices and industry norms is important, but we recognize that some companies can meet their goals with entry-level S&OP while others operating in highly complex and competitive markets may require much more.

Despite the occasional confusion, we see the enthusiasm of business practitioners, consultants and technology providers as a hopeful indicator for long-term prospects of S&OP/IBP. Avoid the war and get on board with S&OP, IBP or whatever you want to call it!

Have you lost faith in Sales forecasts?
Does Sales consistently over or under estimate future sales activity?

A multi-billion dollar global manufacturer is struggling. Two divisions of the company are at odds on how best to achieve world class forecast accuracy. Regional sales account representatives provide forecasts well above historical sales levels. Why? Because inventories made available to each country are insufficient to meet market demand. The result: predict more sales to try to influence supply decisions and receive a greater portion of supply for your region. One division has decided that a centralized approach is best and is no longer considering regional sales input. The other division is moving to a collaborative S&OP approach where regional input is requested, evaluated and incorporated in the overall plan.

Which method do you think will produce a better plan?
Which method will distribute limited resources better?
Which method will yield higher profitability?

Time will tell for this organization. Yet, we can make a prediction today. Experience would suggest that a well-designed, collaborative S&OP process will produce better results. Here’s how we look at how Top-Down and Bottom-Up S&OP drives better results.
1. Bottom-Up Inputs: Bottom-up forecasts are accumulated from many contributors. A distributed sales force may have hundreds or thousands of contributors. Each contributor has a specific area of expertise such as a specific customer, product or geographic area. The contributor enters her forecasts for her specific area of responsibility. Forecasts from all contributors are summed to capture an overall bottom-up forecast.
2. Top-Down Inputs: Top-down projections apply a more centralized view. A small number of forecasters will look at various inputs and generate forecasts. Influencing factors may include market data, economic indicators, and general product and customer trends.
3.…

Story

A man was walking with his four year old daughter.  The girl was full of energy, her attention easily caught by many interesting street activities.  The father instructed the girl to stay on the sidewalk.  After the girl repeatedly roamed off the sidewalk, the father became quite stern, scolded the child and demanded that she follow his instruction.  The girl, tears in her eyes, turned to her father and asked, “what’s a sidewalk?”

Clear Expectations

Do the members of your organization really understand what is Sales and Operations Planning?  Do they have the tools needed to efficiently and effectively run S&OP?

The Strategic Services team at Steelwedge Software has experience with a wide range of companies.  Some companies say they have an S&OP process but it may consist of a Sales forecast thrown over the wall to Operations.  Others say they do not have an S&OP process yet they have many elements that make up the foundation of successful S&OP.

Top 10

Here are the top 10 most critical elements we see in building a productive S&OP process.

10. Cadence – Defined monthly process with consistent participation

9.  Top Management Support – Executives mold, participate and highlight importance of process.  Executives should refrain from dictating the process and expected outputs.

8.  Product Lifecycle Management – New product and end of life modeling; timely visibility to new product launch dates and resource implications

7.  Performance Measurement – feedback loop enabling continuous improvement

6.  Analysis – Using resource time for analysis rather than data gathering and manipulation

5.  Easy access to critical information – one repository with frequent updates and quick access

4.  Units and Dollars – Aligned unit and revenue projections; agreement on unit of measure conversion method

3.  Tool Enabled Collaboration – a forecasting and planning…