The 5 New Best Practices of Sales and Operations

Transcription

1 White paper The Top 5 Features of S&OP The 5 New Best Practices of Sales and Operations Planning (S&OP) Critical features modern S&OP technology solutions need to provide One Network Enterprises

2 White paper The Top 5 Features of S&OP The 5 New Best Practices of S&OP Gartner Research recently reported that fully 70% of S&OP processes today have little discernible strategic dimension. Why? Success has been difficult to achieve because traditional S&OP is manually intensive, relies on data that resides in a myriad of systems, suffers from incomplete and stale views of demand and supply, and takes far too long to complete. Furthermore, traditional S&OP is still too focused on aligning resources within a single enterprise, when in fact much of what determines an enterprise s profitability lies outside of its four walls and in the extended trading partner ecosystem. Although S&OP is still largely driven by people and processes, some of the best-known thought leaders in the field also recognize that technology is increasingly a key enabler. As a result, new S&OP technology tools are emerging that enable a completely different form of S&OP that remedies these problems. What follows are 5 new best practices for S&OP: 1. Improve decision-making with network-wide what if scenarios Instead of what-if scenario building that is limited to an organization s internal operations only, S&OP should enable you to create scenarios that leverage the entire supply network. For example, how will this promotion affect my revenues and margins? Or, how will a change in the launch date of a new product affect the ability of factories and raw material providers to meet demand, and how will their actions affect revenues, margins, or costs? Or, if a natural disaster leads to stock-outs for a particular product, can I recover by boosting volumes in other channels? You should be able easily create and compare multiple scenarios, and crucially, measure their financial impact. This includes tracking your scenarios underlying assumptions, allowing you to compare your chosen scenarios with what actually happened. This leads to better decision-making over time. 2. Include your key trading partners in the S&OP process New technology solutions now allow executives to create S&OP plans by sales channel and product line across key trading relationships, providing a true integrated business plan that understands what your customers are looking for and what your suppliers can deliver. After plans are finalized, you should have the ability to freeze the plan and promote to your execution systems what needs to be done. This requires you to leverage the cloud to monitor endto-end supply conditions, asset availability, and capacity constraints, meaning you ll identify trends and problems much sooner. Unlike traditional S&OP, no part of your supply network should be ignored logistics providers, retailers, and manufacturers all can and should have advance visibility into disruptions and issues. 2

3 White Paper The Top 5 Features of S&OP ENABLING NEXT-GENERATION S&OP 1 RESEARCH Sales Actuals Financial Planning 1 RESEARCH 2 DEMAND Scenario Mgt Statistical Forecasting Event Mgt New Product Intro 2 DEMAND 3 SUPPLY Material Planning Commodity Planning 3 SUPPLY 4 Conflict Resolution Plan Comparison 4 PRE- PRE- 5 EXECUTIVE Publish Plan Execute Plan 5 EXECUTIVE 3. Use analytics to gain a deep understanding of your business You cannot improve what you cannot measure. That s why a new S&OP best practice is to use technology tools that harness your big data to combine baseline analytics with root cause analysis to look deep into your operations, allowing you to make difficult connections and improve outcomes over time. Thus, whenever an issue or question arises, an executive may drill down anywhere in his or her business and use root cause analysis engines to reveal and adjust the underlying levers that determine the plan s success or failure, or sometimes even let the tool make adjustments on its own. With promotions for example, this approach would capture the historical performance of your promotions, infer which promotions are most effective or successful, and make intelligent recommendations for which promotions to run in the future. Or consider stock-outs, where this approach should not only be able to project a future stock, but tell you its financial impact, how it will affect service levels, and adjust future plans to prevent the problem in the future. Essentially, because these new tools are continuously monitoring demand conditions at such a granular level, you will capture and identify consumer trends as they occur. 4. Speed up the S&OP process by creating and executing your plans in a single system With traditional S&OP you build S&OP plans at best once a month, but what happens next? Even in the best case scenario, the amount of time it takes gather and process the necessary data means that weeks can pass between the finalized plan and time to action. New S&OP processes collapse the traditional divide between planning and execution. How? By relying on technology tools that connect to underlying systems to provide an integrated business plan that links strategic, tactical, S&OP, and operational plans, and providing optimized execution capabilities once the plan is finalized. 3

4 White paper The Top 5 Features of S&OP Decisions made in executive meetings can be enacted immediately within the organization and throughout the wider supply network. This means you can either immediately execute any transactions required by the S&OP plan, or send plans to customers local execution systems. Thus, decisions made in executive meetings can be enacted immediately within the organization and throughout the wider supply network. It also enables executives to create S&OP plans that are directly connected to events on the ground, leading to highly accurate revenue and profit projections. 5. Connects you to your trading partners via a many-to-many network The newest S&OP processes are abandoning Excel spreadsheets and s for communication and embracing the many-to-many network model meaning an organization connects only once to a network and from that point on it has the ability to transact and communicate with any other organizations and users that are already on the network. The result is an environment that is especially wellsuited for the kind of cooperative, outward-looking S&OP processes that companies are seeking. A many-to-many model enables all stake-holders whether internal teams or trading partners to synchronize and coordinate their strategic and operational plans. How can One Network help? Companies understand that today s S&OP requires a technology that, among other capabilities, can embrace data from widely dispersed sources across the supply chain, provide executives with accelerated and comprehensive what-if? simulations, fully integrate aggregate plans with detailed plans, and seamlessly link the financial and operational sides of the business. One Network s S&OP service uniquely enables organizations to capture all these benefits, and much more. Tens of thousands of leading companies, including Kroger, Safeway, Argos, GoPro, and Arrow Electronics, are relying on One Network to make their supply chains smarter and more efficient. 4

5 White Paper The Top 5 Features of S&OP Today s S&OP requires a technology that, among other capabilities, can embrace data from widely dispersed sources across the supply chain, provide executives with accelerated and comprehensive what-if? simulations, fully integrate aggregate plans with detailed plans, and seamlessly link the financial and operational sides of the business. 5

6 White paper The Top 5 Features of S&OP For more information contact One Network at: Tel: (toll free) [email protected] Corporate Headquarters US One Network Enterprises 4055 Valley View Ln, Suite 1000 Dallas, TX Tel: (toll free) [email protected] Web: International Headquarters One Network Enterprises (Europe) PO Box London NW8 1HH, UK Tel: +44 (0) [email protected] Web: 6