Sales and Operations Planning Las Vegas 2011

1. How to Keep S&OP From Getting
“Stuck”
Coco Crum, Oliver Wight
Danny Halim, JDA

2. Copyright 2010 JDA Software Group, Inc. - CONFIDENTIAL
Agenda
Why S&OP Processes Get “Stuck”
Common Company Situations
How to Get Un-Stuck
Shelf-Connected S&OP

3. Copyright 2010 JDA Software Group, Inc. - CONFIDENTIAL
Agenda
Why S&OP Processes Get “Stuck”
Common Company Situations
How to Get Un-Stuck
Shelf-Connected S&OP

4. Copyright 2010 JDA Software Group, Inc. - CONFIDENTIAL
Key observation / perspective
that will be shared
S&OP has been evolving on a macro, industry level journey following a typical
innovation adoption model,
but key elements of the process are often missing
in company implementations.
S&OP implementations go through transitional stages
at a micro, individual company level…
Companies that follow-through move to an
Integrated Business Planning (IBP) process.
Supply Chain organizations can use IBP to strengthen their role
in supporting “the Essence of the business.”

5. Copyright 2010 JDA Software Group, Inc. - CONFIDENTIAL
S&OP and IBP:
Decades of Evolution – The Macro Evolution
70s
early
80s
mid
80s
late
80s
late
90s
early
2000s
2000
to present
Production
Planning Balancing
Supply &
Demand
and
Inventory
Control
Financial
Integration
Product and
Portfolio
Management
Integration
Supply
Chain
Collaboration
Scenario
Planning
and
Strategic
Deployment
Sales &
Operations
Planning

6. Copyright 2010 JDA Software Group, Inc. - CONFIDENTIAL
S&OP Is a Common Sense Process
for Aligning Company Plans Every Month

7. Copyright 2010 JDA Software Group, Inc. - CONFIDENTIAL
IBP Is a Monthly Process
for Managing the Business Enterprise

8. Copyright 2010 JDA Software Group, Inc. - CONFIDENTIAL
Sales & Operations Planning and
Integrated Business Planning
A process led by senior management that evaluates and revises time-phased
projections for demand, supply, new product development, strategic projects
and the resulting financial plans. This is done on a monthly basis, on a planned
24-month rolling horizon.
It is a decision-making process that realigns the tactical plans for
all business functions in all geographies to support the company’s strategy,
business goals and targets.
A primary objective of S&OP/IBP is to reach consensus on a single operating
plan, to which executives of the management team hold themselves
accountable, and allocates the critical resources of people, equipment,
inventory, materials, time and money to most effectively satisfy customers in a
profitable way.

9. Copyright 2010 JDA Software Group, Inc. - CONFIDENTIAL
Most Companies Have Elements of S&OP
in Place, But Are Not Truly Doing S&OP / IBP
(No Management Business Review
and little executive involvement.)
© Oliver Wight International 2009
Why is that?
70-80%
of companies surveyed do not
do S&OP at the executive level
Therefore, they are not really
doing S&OP/IBP at all!

10. Copyright 2010 JDA Software Group, Inc. - CONFIDENTIAL
S&OP  IBP – the Issue Is…
S&OP/IBP is often
treated as:
– Supply Chain only
– Demand – Supply – Inventory Balancing …
near term
IBP should be the
primary management
process to run the
business.
Companies get results … but
they miss out
on the benefits of
truly doing it well.
EAME 1014

11. Copyright 2010 JDA Software Group, Inc. - CONFIDENTIAL
What We See: S&OP Goes Through Four
Stages of Maturity…

12. Copyright 2010 JDA Software Group, Inc. - CONFIDENTIAL
…But Companies Do Not Fully Mature

13. Copyright 2010 JDA Software Group, Inc. - CONFIDENTIAL
Case Example – Supply Chain Initiated
S&OP Implementation
• A leading wine producer and distributor
• Difficult to achieve consensus demand
• S&OP process led and owned by supply chain
• Emphasis on improving forecast accuracies and alignment
to finance/budget
• No management business review
• Will gradually evolve to integrated business planning

14. Copyright 2010 JDA Software Group, Inc. - CONFIDENTIAL
Here’s Why Maturity Typically Stops
Middle
Management Only Company Leadership
Stuck
Production
Planning
Balancing
Supply &
Demand
and
Inventory
Control
Sales &
Operations
Planning
Financial
Integration
Product and
Portfolio
Management
Integration
Supply
Chain
Collaboration
Scenario
Planning
and
Strategic
Deployment

15. Copyright 2010 JDA Software Group, Inc. - CONFIDENTIAL
Here’s What Companies Miss When S&OP Is
Not Fully Mature!
4 Stages

16. Copyright 2010 JDA Software Group, Inc. - CONFIDENTIAL
Food for Thought …
Are supply chain organizations truly connected
with the essence of the business?
Operational Excellence or
Operational Competence?
Operational
Excellence
Product
Leadership
Customer
Intimacy
What is your
business focus?

17. Copyright 2010 JDA Software Group, Inc. - CONFIDENTIAL
S&OP & IBP – What is the Difference?
More Robust Financial Integration
Inclusion of Strategic Plans, Initiatives, and Activities
More Robust Product & Portfolio Review
Improved Simulation, Modeling, and Scenarios
Improved Operational Risk Visibility and Management
Gap Identification, Improved Decision-Making
Easy, Effective Translation – Aggregate and Detail
Improved Trust Across the Entire Management Team

18. Copyright 2010 JDA Software Group, Inc. - CONFIDENTIAL
Oliver Wight and JDA Partnership
• Recognized Innovator and thought
leader
• Recognized standard for S&OP/IBP
education and implementation
• ClassA Certification
• World class S&OP/IBP requires
process and behavior changes and
executive leadership
• Recognized Market Leader for SCM
& Collaboration
• Broadest integrated functional
coverage for S&OP and CPFR
• World Class business processes
efficiently deployed with technology

19. Copyright 2010 JDA Software Group, Inc. - CONFIDENTIAL
JDA’s S&OP / IBP Solution Approach
Demand Planning
• Demand
• Enterprise Planning
• Promotions
• Demand
Classification
• Collaborate
Supply Planning
• Fulfillment
• Sequencing
• Supply
• Master Planning
• Strategy/IPO
• Collaborate
Trans Planning
• Logistics Sourcing
• Transportation
Planning
• Inbound freight mgmt
• Collaborate
Profitability
Simulation
Analytic
Dashboard
Executive Mgmt
Graphical Review
Demand/Promotion
Review
Supply
Review
Financial
Appraisal
Management
Business Review
Process Workflow & Task Management
Integrated Reconciliation
Product
Review
Document Assumptions, Risks, Opportunities
Scalable Hierarchy
Meeting Management & Task Assignment
“What-If” Scenario Modeling
Publish Plan Process – Archive Inputs to Plan

20. Copyright 2010 JDA Software Group, Inc. - CONFIDENTIAL
Agenda
Why S&OP Processes Get “Stuck”
Common Company Situations
How to Get “Un-Stuck”
Shelf-Connected S&OP

21. Copyright 2010 JDA Software Group, Inc. - CONFIDENTIAL
Case Example
• Healthcare Industry
• Spinoff
• Supply Chain Orientation
• Initially Struggled to Get Executive Involvement
• Now Executive-led S&OP
• Executives View
– Process Didn’t Address Their Business Issues
– Information Presented Was Not in the Way They Viewed the
Business

22. Copyright 2010 JDA Software Group, Inc. - CONFIDENTIAL
Determine
Value
Leader
Education
Determine
Plan
Appoint
Teams
Leadership Phase
Diagnostic
Design Team
Education
Management
Business Review
Strategic Review
Product &
Portfolio Review
Demand Review
Supply Review
Financial
Appraisal
Integration
Reconciliation
ProcessDesignandEducation
Development Phase
Quick Start Solution
Setup
Cycle 0
Tactical
Strategic
Decision
Making
Implement the Process
Performance Measures
Assess
Progress
Assess
Progress
Document
Results
.....
Aggregate to
Detail Planning
Problem
Prevention
Problem
Solving
Improve
Communications
Ownership Phase
Aggregate to Detail
Synchronization
Design
Cycle 1-3 Cycle 4-6 Cycle 7-8 Cycle 9
Executive
Briefing
Technology/InformatonScopting
Diagnostic
Assessment
Business Data
Mapping Elements
Install Software and
Train
Oliver
Wight
JDA
Joint
Client
Proven Path Fast Track Program
Approach
Executive Led and “Owned” Process…
In 3 Months and Continuing to Improve
Business Focus
Financial Integration
Product Innovation Inclusion

23. Copyright 2010 JDA Software Group, Inc. - CONFIDENTIAL
Agenda
Why S&OP Processes Get “Stuck”
Common Company Situations
Oliver Wight/JDA Fast Track
Shelf-Connected S&OP

24. Copyright 2010 JDA Software Group, Inc. - CONFIDENTIAL
Case Example
Business Challenges
• How do we best support each customer at every purchase?
• How do we optimize shelf space in a highly cost-competitive
economy?
• Can we improve satisfaction, reduce stock-outs and increase
revenue simultaneously?
• Are our customers fully engaged in "the Sony experience"?

25. Copyright 2010 JDA Software Group, Inc. - CONFIDENTIAL
Sony incorporated a focus from
Sell-In to Sell Out
• Localized assortments
• Optimized shelf spaces and in-
store displays
• Promotion/bundling
• Capture store-level KPIs and
exceptions
• Store/merchandising actions
• Leveraging POS for forecasting is not good enough
• Executing collaboration that includes store-clustering based on preferences and
demographics and predicting out-of-stocks to trigger store-level actions
Sell-outSell-in

26. Copyright 2010 JDA Software Group, Inc. - CONFIDENTIAL
Shelf-Connected S&OP
Strategically align to the business plan
Supplier Factory Manufacturer DC Retail DC
Manufacturing
Supply Chain
Retail
Supply Chain
Store
S&OP
Production
Planning &
Scheduling
Raw
Material
Planning
Demand
Planning
Fulfillment
Planning
Category
Management
Store & DC
Replenishment
Store
Forecasting
Promotional
Planning
Shelf
Analytics
Network, Sourcing and Inventory Optimization
Order Promising, Inventory Deployment & Logistics
ShipmentsProduction
Orders
Procurement
Orders
Assortments POS
Sales
DC
Withdrawals
Customer
Orders
Collaborative
Planning

27. Copyright 2010 JDA Software Group, Inc. - CONFIDENTIAL
“Americas’ favorite CE Brand” with industry leading positions in
audio, video, information and communications equipment, semiconductors,
components and other products
Proven Results From Shelf
Connected Journey
Breakthrough results
In-stocks at store level +18%
Lowered weeks of supply by 27%
Improved forecast accuracy by 40%
Named Walmart Supplier of the Year*
* Source: Gartner Case Study: Sony Electronics' Customer Focus and Channel
Collaboration Result in Wal-Mart Supplier of the Year Award, November 2010
• “We felt our end users weren't fully engaged
in the Sony experience, and that if we could
better understand their needs, we could
better support them.
• We also knew we had to improve our already
good relationships with retailers. I wanted to
be able to tell them that if you carry X
inventory and take Y actions, we can have a Z
desired level of profitability.”*
• - C.J. Wehlage, vice president of supply chain solutions

28. How to Keep S&OP From Getting
“Stuck”