David Marsh

1. Sales & Operations Planning –
Transformational change or
Continuous improvement?
30/05/17 1
Supply Chain Hub: 6th June 2017
David Marsh

2. Introduction
 Sales & operations planning (S&OP) been around for some time
 Companies apply S&OP strategically, tactically or combination
 External challenges markets, networks and aware consumers
 Internal challenges, complexities and change management
 Relevance of S&OP as enabling critical business capabilities
Key discussion points:
 Recap of what is S&OP, IBP, JUBP…...
 The challenges and complexities for S&OP implementation
 S&OP as transformational change or continuous improvement
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3.  Introduction to presentation
 Sales & Operations Planning
 Challenges & complexities
 Transformation versus Continuous Improvement
 Summary Points, Discussion & Close
Agenda
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4. Sales & Operations Planning
 The goal is to equip business decision makers with the
true insight of current and future performance of the
portfolio so that the right portfolio choices can be made
on investments, execution course correction, the
balance of service, cash performance and
manufacturing productivity
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5. S&OP as a 5-Stage Process
Weekly/Daily management of plans, change and delivery
Monthly Sales & Operational Planning
Reconciliation
&
Optimisation
Integrated Business Planning (IBP)
Supply
Network
Planning
Demand
Planning
Sales &
Demand
planning
Forecasts
and Orders
Supply
Network
planning
Production
Planning &
Scheduling
Portfolio
Planning
Exec.
Planning
Reviews
1-5 years
Rolling
1-12
&
13-24
months
Rolling 0-52
Weeks
Focus on 0-13 weeks
Stage 1 Stage 2 Stage 3 Stage 4 Stage 5
NPD EPD
planning
Sales
History
Time Horizons
Cash up
volume &
value -
Options
P&L Projections
Trade offs
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6. Inventory
Replenishment
Planning
Sales & Operations Planning….
The monthly cycle to synchronise planning & execution
 An effective S&OP process aligns individual plans into an integrated plan
supported by one common data set
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Supply
Plan
Demand
Plan
S & OP
Sales and
Operations
Planning
Sales
Forecast
Capacity
Plan
Demand
Planning
Supply
Planning
Business Plan
Marketing,
Sales
Promotional
Planning
Portfolio
Planning Manufacturing
Capacity
Planning
Material
Requirements
Planning
Reconciliation & Optimisation

7. Demand Driven Supply Chain for Generic Trading Model…
shows the information flows and the physical stock movements & locations
 Demand driven supply chain based on forecast sales
 Supply plans based on Demand plans, Customer service & Supply capacity
 Decouple demand from supply & Collaborate
 Network optimisation
 Portfolio prioritisation
 Trade-offs Stock at Markets DCs versus Manufacturing flexibility
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Market Units
Suppliers
Manufacturing
& Co-Packers Markets DCs
Supply Unit(s)
Customer
Orders
Customers

8. S&OP Cycle Timeline - Illustrative
The foundations for an effective S&OP cycle
Demand Planning Review
Inventory Review
Reconciliation Review
Supply Planning Review
Week 2 Week 3 Week 4 Week 1 Week 2
Exec S&OP Review
Data Maintenance
Legend UK
Germany
Italy
France
Supply
There should be planned formal reviews of data and
inventory.
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Portfolio Review
Exec

9. Success factors
Across the Markets, Supply and Group
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Data
Common data hierarchies for product, customers and suppliers
SKU data accuracy
SKU product lifecycle management
Standardisation of cycle, process and reporting
One set of numbers derived in a standardised way
One size does not fit all but must be able to accommodate
differences in one model
Culture, attitudes and motivations
Organisation
Leadership

10.  Introduction to presentation
 Sales & Operations Planning
 Challenges & complexities
 Transformation versus Continuous Improvement
 Summary Points, Discussion & Close
Agenda
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11. Realities of the Supply Chain Network
Global / local
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FACTORY MARKETS
UK
Italy
Germany
UK
Italy
Germany 1
Germany 2
IT
Others
Netherlands
Belgium
Austria
1%
5%
4%
1%
90%
0%
99%
25%
33%
5%
17%
4%
4%
12%
2%
59%
1%
1%
7%
12%
18%
% of Manufacturing Volume Shipped to
Markets

12. Complexities and Challenges
 Mix of global and local products
 Product complexity
 Promotions
 Escalations
 Data Management
 Cultural challenges
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13.  Introduction to presentation
 Sales & Operations Planning
 Challenges & complexities
 Transformation versus Continuous Improvement
 Summary Points, Discussion & Close
Agenda
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14. Transformation based on the degree of change
Strengthening the planning model will require cross functional
decisions
IT/ Tools
Performance
Management & KPIs
Strategy
Organisation/
Accountability & Culture
Processes
ONE Integrated Supply Chain
Local Supply Chain
specific Processes
Standardised Global Supply
Chain Processes
Local Master Data +
reliance on spreadsheets
One set of Master Data +
reliance on common systems
Lean means lower costs Lean means maximising value
whilst minimising waste
Focus on meeting
Financial targets
Focus on End to End
Value creation
Lack of clear
Accountabilities
Clear accountabilities across
the Supply Chain
As-Is To-Be
Siloed Supply Chain
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Where should
the Diamonds
be?

15. An example Transformation Route Map
Project management, Leadership and Transformation Programme
Network Capacity mgt
• Create Master Data for all
•Model impact of capacity decision
on costs
•Complete Roll out of
Manufacturing standardisation
(OEE Measurements)
• Management of short term
demand changes.
• Product hierarchy definition
•Standardisation &
enhancement of the planning
processes
• Repositioning of the S&OP
cycle
(Objectives/Agenda/Attendees/
Scenario modelling…)
•Business Requirements for
system change
•
M + X
M +Y
M +Z
M
TIME
Vision
One company, one
team, one supply
chain
•Product Phasing in and Out.
•Product Hierarchy definition
•Master Data Management &
Data Cleaning
•Master data mgt process
design
•Product Hierarchy definition
2
6
3
7
5
11
9
8
12
10
15
16
17
19
18
25
4
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26
24 23 22
•Operational Effectiveness
initiatives
•Lean Manufacturing concept
design (Scheduling/ Multi-skills
team, work-flows…etc)
1
13
14
20
21

16.  Introduction to presentation
 Sales & Operations Planning:
 Challenges & complexities
 Transformation versus Continuous Improvement
 Summary Points, Discussion & Close
Agenda
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17. To Summarise…
 S&OP is being carried out even if not formalised – tactical level
adjustments
 S&OP real value is at strategic level to support business plan
reviews
 Standardise process, cycle, KPIs – even special needs can be
standardised
 Culture and Ways of working are interdependent – change
management
 Challenge complexity and adopt “simpler, faster, better”
 Transformation to get to Continuous Improvement based on degree
of change
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18. Sales & Operations Planning
 The goal is to equip business decision makers with the
true insight of current and future performance of the
portfolio so that the right portfolio choices can be made
on investments, execution course correction, the
balance of service, cash performance and
manufacturing productivity
 QUESTIONS?
 David Marsh – dmarsh.osten@gmail.com
– LinkedIn david-marsh-672a0a
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