Steelwedge Agility Webinar Series Featuring Roddy Martin, Supply Chain analyst and researcher with Nari Viswanathan, Steelwedge Most businesses are organization-driven: built to move supply to customers. Yet in today’s highly volatile global business environment, successful businesses are realigning to become much more agile to adjust to change, with a focus on becoming demand-driven: starting with the customer. This transformational sea change in Supply Chain strategy needs to be driven top down. It must be collaborative. It must have an end-to-end S&OP process. And, it should have process-enabling planning technology. Roddy Martin, SVP Global Supply Chain & Manufacturing Transformation at Competitive Capabilities International and former Supply Chain leader and distinguished analyst at AMR, will lead this interactive session with examples from some of the best demand-driven organizations such as Proctor & Gamble. He’ll also offer insights for businesses at any stage of demand-driven transformation, including: • Recognizing the new Supply Chain leadership requirements • Syncing business with the right information • Powering agility with integrated business planning solutions Nari Viswanathan, VP of Product Marketing and Management at Steelwedge, a former Supply Chain analyst at Aberdeen Group, will add perspective on S&OP solutions to jump start the journey to end-to-end demand driven process.

1. Are You Ready for the Sea
Change in Supply Chain
Strategy?
Roddy Martin
SVP Supply Chain Transformation
Competitive Capabilities International
April 2012

2. Roddy Martin
SC Transformation Thought Leader
Executive South African Breweries
(SABMiller)
– Engineering Leadership
– Manufacturing Strategy
– IT Leadership
AMR Research – Gartner SC leadership
CCI SVP SC
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3. Starting Thoughts
SC and IT Alignment: So, what’s new?
• IT Alignment, IM Capabilities & Architecture
• Prioritized and Synchronized to Support End to End Digitization of the Demand–driven Value
Network
4 Management Systems: Decoupling Layer The End to End Supply Chain Starts
at the “Buyer:” Shopper/Customer
• The Journey : Readiness to Change / Performance Improvement Maturity is a Critical Factor.
• Not Just “One Supply Chain” Demand-driven Segmentation Reduces Complexity!
Supply Chain Strategy is the Business Operating Strategy
• Top Down Change Leadership is Fundamental to Sustainable Transformation.
• Supply Chain Undergoing Sea Change Transformation – from Functional Outputs to Business
Outcomes
Building End to End Process Capability is More Than a Set of Projects
• Building Sustainable Process Capabilities while Managing Day to Day Business Performance –
More Than “Integration”
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4. Today,Tomorrow, 2020 Capabilities Challenge: Future Proofing
Requires “More” than Projects
“Real” Money
& Integration”…………
Costs
? Growth
Process
capability to be
agile across
end to end
Demand-driven
Value Network
Journey to build agility
Today 2020
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5. “Linear Supply Chains Lack Scale Process &
Visibility” --P&G Chief Supply Chain Officer
“Change”
Suppliers Manufacturers Distributors Consumers
Partners Assemblers Wholesalers Customers Users; Buyers
New Product or Service
Merges to the Base
Supply Process
Manufacturer Customers
Patients
Projects and Programs Consumers
Suppliers Materials
Risk Risk
Mgmt Manufacturing Distribution Risk
Risk Risk
Risk Risk
Risk 5 day demand change
90 day response time
Disconnects… Silo’d & Functional Focus vs End to End Demand–Driven Processes
•Agility and responsiveness
X
•Sustainable performance improvement
•End to end process capabilities
•Managed complexity & risk
•Structure for “global operations”
•End to end talent & skills, people development
•Enabling end to end process "information”
“Agility to Change”
Competitive Capabilities International (CCI)
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6. Gartner, AMR Research
Outside In view
End to End Supply Chain Process
Technology
Fundamental Aligned Cross Functional Goals
Change
Leadership & Objectives
Continuous
Measurement Improvement
Aptitude Culture
Risk Management
Power
Competitiveness Demand Management
“East-West” Through
Process Process
(e.g. S&OP)
Global Network Management
Performance “North-South”
Goal Cost Optimized Supply Chain
Alignment
Align to customer value
Differentiators Sustainability
Services
Profitable Trade Offs
Competitive Capabilities International (CCI)
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7. “Supply Chain” Starts with the Buyer Choice; Is Outside-In; End to End
& An Interdependent Network
…& Impacts
Point of Capabilities Here
Starts here ….. Purchase
Stock
Outs
“Integrative
Improvement
Consumers, Shoppers Actions &
& Buyers Trade Offs” Product Quality
Make Choices Demand Supply On The Shelf
Product
Winning in New
Costs to Serve Open Markets
Account Profitability Innovation
Complexity
Costs or Embedded
Risk
Differentiates Risk Management
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8. The Demand-driven Value Network Framework:
P&G “CDSN “Thought Leadership
Adapted from
Product & Service Innovation AMR Research
Demand Visibility Supply Visibility
Customer – Patient back
Customers , Buyers, Users,
Integrated Strategy, Business
design Sufficiency &
Value Network
Suppliers & Partners
Planning
& Consumers
Reliable,
Channel
User/ Profitable
Demand Demand
Consumer/ Response from
& Translation
Demand Supply
Demand &
Insights Network Based
Management Trade Offs on Demand
decoupling
Segmented Pull Segmented Push
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9. The 5 Stages of Performance Improvement Maturity
Leaders
”The Promise
Of IT”
Impact
Learning
End-to-end Network
Average Integrative
Improvement
System Culture of
Integrated Innovation and
Functional Sharing
Excellence Codified
Expert (Situational,
Led /Based Integrative Systemic and
Projects Structured Improvement Strategic)
Reactive Integration Within
Fixes
Implementation Core Functions (Situational and Stage 5
Systemic)
of (Systemic – Limited
Integrated of
No Systemic Improvement
Functions )
Stage 4
Continuous Projects led by
Improvement Experts
Plans or structure. (Ad Hoc - Projects) Stage 3
Fire Fighting
Stage 2
Stage 1
Stages Of Performance Improvement Maturity
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10. IISd Scores ( April 2012)
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11. Polling Question
Where do you think your maturity level is ?
1. Stage 1: Reactive
2. Stage 2: Expert-Led Projects
3. Stage 3: Integrated Functional Excellence
4. Stage 4: End-to-End Improvement System
5. Stage 5: Learning Network
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12. Transformation - Two Core Thrusts of Work; Today and Tomorrow!
Vision
Strategic Intent
Leadership Role Managing The Change
Business Strategy,
Intent, &
Focus Areas
Business
Prioritized
Management Work
Role Future-ize
The Business
Control & Build Sustainable
Manage the Business Improvement & Compliance
& Compliance Capabilities
Compliant Sustained
&
Controlled
Change Management &
Compliant
Business & Alignment Agility
Performance Capabilities
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© Competitive Capabilities International

13. The Ultimate Goal… Sustainable, Anchored Capabilities
Unsustainable Performance
Sustainable Business
Performance Improvement
Excellence in Results
•Balance
“silo cost focus ”
•Capabilities
•Processes
•Change Leadership
“ lean and efficiency improvements”
Necessary but not Sufficient
Excellence in Work Practices
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14. 4 Layers of “Management Systems”….illustrative process
examples only
Stages of Process-based Operating & Performance Improvement Maturity to Demand Driven Value Network Sufficiency
Business Operating Improvement
Goals & Projects
Functional
Process Integration
Demand-driven end- end SC
process integration
Value driven Business
tradeoffs & network
System of Venture
and 1 2 3 4 5
High
Sufficiency Performance Demand Forecast Accuracy & Planning S & OP
Balancing Business The end to end
Innovation & Value driven
Business Process &
Profitability
Sufficiency
Business Tradeoffs way the business
Supply Reliability & Supply Planning Planning
Operating
4
Analyses actually operates
System
Integrative Improvement System Deployment & Capability Development
Business Operating Strategy,
Execution, & Culture
Performance Maturity – based
Process – Model Based Decision Support context of data & information
Technology Enabled Work Flow Processes
& Data Management
Integrated
High Performance RFID S & OP
Quality
Information Traceability
& compliance
?
Technology Technology modeled workflows and
Logistics
Enabled Work Flow business processes using business &
3 System of VMI &
System & Business
Planning
Sourcing
Distribution transactional data
Process &
Process Management CPFR Procurement
Master data &
process-based
context of data
2 Systems of
Record
High Performance CRM PLM
SRM
?
Transaction Technology based applications, data
Processing ERP processing & data management
Application SCM/E
WHM
Architecture “MES”
Systems of
1
Real time
& Process Control
Process and Data
High Performance
Control Automation Machines Controls Measurements
Architecture
Competitive Capabilities International (CCI) 14
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15. Layers of “Management Systems”….illustrative process examples
only
Stages of Process-based Operating & Performance Improvement Maturity to Demand Driven Value Network Sufficiency
Business Operating Business Operating System Improvement
Goals & Projects
Functional
Process Integration
Demand-driven end- end SC
process integration
Value driven Business
tradeoffs & network
System of Venture
and Integrative Improvement System5
1 2 3 4
High
Sufficiency Performance
Demand Forecast Accuracy & Planning S & OP
Balancing Business The end to end
Innovation & Value driven
Business Process &
Profitability
Sufficiency
Business Tradeoffs way the business
Supply Reliability & Supply Planning Planning
Operating Analyses actually operates
System
Flexible Decoupling Information &
Business Operating Strategy,
Integrative Improvement System Deployment & Capability Development
Analytics Model Layer – Decision Support Models
Execution, & Culture
Performance Maturity – based
Technology Enabled Work Flow Processes context of data & information
& Data Management
Integrated
High Performance RFID S & OP
Quality
Information Traceability
& compliance
?
Technology Technology modeled workflows and
Logistics
Enabled Work Flow business processes using business &
System of System & Business
VMI
Planning
Sourcing
&
Distribution transactional data
Process &
Process Management CPFR Procurement
Master data &
process-based
context of data
Systems of Application, Data and IT Process Architecture
High Performance CRM PLM
Record SRM
?
Transaction Technology based applications, data
Processing ERP processing & data management
Application SCM
WHM
Architecture “MES”
Systems of Real time
& Process Control
Process and Data
High Performance
Control Automation Machines Controls Measurements
Architecture Competitive Capabilities International (CCI)
© Competitive Capabilities International

16. Polling Question
• Is the “Decoupling Information Layer” a priority ?
– Yes
– No
– Already in place
Is your IT deployment strategy aligned and synchronized to your
Supply Chain performance development strategy ?
– Yes
– No
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17. The Integrative Performance Improvement System (IIS)
Connects the Dots in Supply Chain Transformation from Traditional
to Demand-Driven
The Execution Challenge !
Transformation
COE S & OP
Demand INTEGRATED PROCESSES
Supply
A Strategic
Projects > Processes > Demand-driven Value Network
Enterprise
Initiative to 1 2 3 4 5
Lead
Alignment
& Develop Strategy “Evolving READINESS”
Capabilities
Using IIS Metrics Process –based Performance
Platform
Analytics
Organization & Decision Support
IT
GOAL ALIGNMENT
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18. Practice based Performance
1.9 2.3 3.1
New Product Launch and Introduction
Inventory Level Optimization
S & OP
© Competitive Capabilities International
Manufacturing Gate Quality
Integrative Improvement
Perfect Order performance
Teamwork &
-
Change Management
Business Goal: Eliminate Stock Outs
Demand Forecast Accuracy
Sourcing and Procurement Costs
Knowledge management and Standards
Competitive Capabilities International (CCI)
Information and Technology
Asset Reliability & performance
+ + + + + + + + + + +
5%
20%
10%
18
Stock Out Performance

19. S & OP
Competitive Capabilities International (CCI) 19
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20. S&OP must Confront Conflicting Goals
Goal: Make the financial budget. Tops-down Focus.
Desires control and wants predictability of operations.
Forecast definition: The budget
Finance
Goal: Maximize
Goal: Factory
revenue &
optimization,
market share,
Sales and improve costs
wants Demand-side Supply-side Operations and minimize
guaranteed Marketing
demand
product
uncertainty
availability
Forecast
Forecast
definition:
definition: Mold, color, ship- Supply Mold, color, Manufacturing
Sales plan to at the Chain manufacturing Plan
customer level location
Goal: A feasible plan. Bottoms-up focus.
Wants to minimize risk and disruption
Forecast definition: The demand plan
Adapted from AMR Research
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© Competitive Capabilities International

21. Planning Integration Evolves Through Stages of Maturity
Projects Integrated Processes & IT End -End SC Improvement Demand-driven Value Network
Stage 2 Stage 3 Stage 4 Stage 5
Demand
Planning Demand Planning
Integrated Integrated
Supply
Planning
Supply Planning Business Business
Planning Planning
S&OP
S&OP
Supply
Supply Chain Supply Chain
Supply Chain Alignment Alignment Chain
Alignment
Alignment
Risk, Complexity, Organization Design, Leading and Managing Change, Enabling IT
Competitive Capabilities International (CCI)
© Competitive Capabilities International

22. Conclusion
Competitive Capabilities International (CCI) 22
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23. Closing Thoughts
The End to End Supply Chain Starts at the “Buyer:” Shopper/Customer
• The Journey : Readiness to Change / Performance Improvement Maturity is a Critical Factor.
• Not Just “One Supply Chain” Demand-driven Segmentation Reduces Complexity!
Supply Chain Strategy is the Business Operating Strategy
• Top Down Change Leadership is Fundamental to Sustainable Transformation.
• Supply Chain Undergoing Sea Change Transformation – from Functional Outputs to Business Outcomes
Building End to End Process Capability is More Than a Set of Projects
• Building Sustainable Process Capabilities while Managing Day to Day Business Performance – More Than
“Integration”
SC and IT Alignment: So, what’s new?
• IT Alignment, IM Capabilities & Architecture
• Prioritized and Synchronized to Support End to End Digitization of the Demand–driven Value Network
• 4 Management Systems: Decoupling Layer
Competitive Capabilities International (CCI) 23
© Competitive Capabilities International

24. Transformation - Aligned Through a Transformation “Office”
Vision
Strategic Intent
Leadership Role Managing The Change
Business Strategy,
Intent, &
Focus Areas
Business
Prioritized
Management Work
Role Future-ize
The Business
Control & Build Sustainable
Manage the Business Improvement & Compliance
& Compliance Capabilities
Learning
Integrative
Network
Improvement
C
System
Functional
od
ifi
Stage 5
ed
Vision
an
Impact
Excellence
d
St int
ru Culture of Innovation
eg
ct and Sharing of
ra
I Production Know How
Stage 4
ur te
m ed d
pl im im
Expert based
e pl (Situational, Systemic
pl
m e and Strategic)
e
Strategic Intent
en m m
ta en
Stage 3
en
No Cont. Imp.
tio ta ta
n tio tio
ap n n
pr ap
N oa pr (S
o ch itu
Stage 2
oa
C ba ch ati
on se wi on
tin d thi al
uo on n an
us th d
Stage 1
th
I e e Sy
m ca fu st
pr pa nc e
ov bil tio mi
e ity ns c)
m of
en th (S
t e ys
Pl lo te
an ca mi
s l c)
or ex
Compliant
str pe
uc rt
tu
(A
re
d
Sustained
.
H
Managing The Change
oc
)
& 1950 2010 2013
&
Controlled Sustainable & Compliant Performance Improvement Culture
Compliant
Business Agility
Performance Change Management Capabilities
& Alignment COE
Competitive Capabilities International (CCI)
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