Presentation given at the September 14th S&OP IE event.

1. S&OP: The Top Ten 1 Lora Cecere, Partner September 2011

3. 3

4. Let’s start with 9 4

5. #9: What do I avoid? 5

6. One number forecasting You don’t need a technology. 80% is good enough. Standardize: One solution provider is all you need. Supply chains are moving so fast they don’t have time to plan. Real-time S&OP is needed. A COOKIE-CUTTER approach can work. The Market Myths 6

7. #8: How do I get started? 7

8. What is the goal? How do you achieve the right balance between demand and supply? How do you make decisions? How does your organization measure success? How do you tie S&OP planning to execution? The Right Questions 8

9. Goal Evolution 9 1985: Deliver a Feasible Plan for Operations 1995: Match Demand with Supply 2005: Demand Driven 2011: Market Driven

10. Lots of Options 10 Enrichment Vendors

11. #7: What are the barriers? Pitfalls? 11

12. 12

13. Building Value Networks Supply chain strategy Business strategy What are the right things to do to increase company value? Value-network strategy What are the right ways to support the business strategy? What are the right trade-offs between value drivers for each value network? Right product platforms Design the supply response Build organizational systems and manage talent Align supply relationships Align demand relationships Effective Supply Networks Execution of buy-side strategies Design Networks Innovation Methodologies Continuous Improvement Capabilities Required Demand Networks Joint Value Creation Strategies Supply Chain Network Design Business Process How do I do the right things right?

14. Data Source: CFO Magazine

15. Data Source: CFO Magazine

16. #6: What is the ROI? 16

17. Benefits received from S&OP processes What benefits have you received from your work with S&OP processes? 2% 59% Increasing revenue 5-7% 57% Improving forecast accuracy 10-15% 50% Reduction of inventory 3-7% 42% Improving asset utilization Determining outsourced manufacturing 38% 36% Determining procurement requirements Improving new product launch 3-6% 34% 2-8% Transportation and warehouse management 32% 32% Capital planning and asset management 3-6% 30% Improvements in the perfect order

18. 18 Increasing ROI

19. The Reason: Commodity Price Pressure 19 $/LB Source: Index Mundi

20. #5: What is the right frequency, duration and granularity of planning? 20

21. What drives Variability? Value: Price, trade incentives, new products, services, freshness, responsiveness Variety: Configurations, items, platforms, components, brands, processing technologies Velocity: Lead-times, order to delivery, inventory turns, time to market Volatility: Demand, inventory, schedules, reliability, yields Volume: Plants, warehouses, distribution centers/points, product flow

22. Focus 22

23. #4: What is the Best Reporting Structure? 23

24. Cost Volume Growth Alignment of metrics: Typical organization 24

25. Managing Bias and Error 25 Reports to Sales Reports to Marketing Reports to Manufacturing

26. #3: Do I need a Technology? 26

27. The Stages 27

28. #2: Who does it Best? 28

29. Leaders sensed Market Changes 5X Faster 29

30. #1: What does Good Look Like? 30

31. Aligning for balance 31 & Goal

32. Definitions 32

33. Value Planning Focus on continuous improvement Forecast-Value Add Analysis True North Focus on what is important in YOUR business Move horizontal and outside-in What is the roadmap? 33

34. 34 About Us Altimeter Group is a research insights group providing companies with a pragmatic approach to understanding disruptive technologies. We have four areas of focus: Leadership and Management, Customer Strategy, Enterprise Strategy, and Innovation and Design. Visit us at http://www.altimetergroup.com or contact info@altimetergroup.com.

35. 35 Thank you Lora Cecere lora@altimetergroup.com Blog:www. supplychainshaman.com Twitter: lcecere Linkedin: linkedin.com/pub/lora-cecere/0/196/573