Solutions Graphics Project - Midwest User Group by hcj

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									                             Sales & Operations Planning
                  Aligning & Balancing Your Supply Chain

                                                    Hank Canitz
                             Senior Director Consumer Industries
                                                      QAD, Inc.


QAD Proprietary
       Agenda
      Demand Driven / Customer-Centric Supply Chains
      Evolution of Sales & Operations Planning
      Standard Sales & Operations Planning Process
      S&OP’s link to the “Perfect Lean Market”
      QAD’s S&OP Solution
      The Future of QAD’s S&OP Solution
      Recommended Action Steps
      Q&A



QAD Proprietary
       Customer-Centricity
      Consumer centric companies continue to migrate toward
       developing capabilities to service the individual consumer.
                                                            Inside Out
                                                           Information



                                                        Outside In
                                                       Information




QAD Proprietary
   QAD’s Demand Driven Supply Chain Solution
            Supplier   Manufacturer      Distributor            Retailer              Customer




                                    PLAN
                                                                             Customer
                                                                            Collaboration


                                                                                        Global Data
                                            Demand             Product                Synchronization
                                          Management         Introduction



                                                                                    PULL
                                                                                   Automated
                                                POS Data &    Vendor Managed          Data
                                                 Analytics       Inventory         Collection




       The customer-centric organization of the future will integrate all their supply
       and demand capabilities to provide a continuous flow of real-time information
       to dynamically respond to customer demand.

QAD Proprietary
       S&OP Has Evolved From a Process to Align
       Demand and Supply Every Month
              Early Focus




                            Monthly Aggregate Planning
                            Executive Management Process
                            Focus on Demand/Supply Alignment



QAD Proprietary
       To Effectively Align Demand and Supply,
       A Longer Planning Horizon Is Needed

                                       Identify problems
                                        and opportunities
                                        earlier
                                       Time to determine
                                        the most effective
     1              3        18         response
   Month          Months   Months      More effective
                                        annual planning




QAD Proprietary
      Aggregate Demand/Supply Alignment Over a
      24-Month Planning Horizon Brings Results


                  Improvements in:
                   – On-time delivery
                   – Inventory turns
                   – Demand/supply
                     collaboration
                   – Asset and people
                     utilization
                   – Product availability
                   – “One set of numbers”
                   But….



QAD Proprietary
       Best Practice Is Now to Incorporate Product
       Management Review into S&OP




QAD Proprietary
       Purpose of Product Management Review Is:

                  Reach consensus on the status of projects
                  Address issues that affect their status
                  Keep projects on scope, on budget and on schedule

                   Project   Key Project Milestones   Last    LBE     Status   Corrective
                      #
                                                      Date    Date              Actions
                    P-06     1   Milestone            12-06   12-06     B
                             2   Milestone            01-07   01-07     B
                             3   Milestone            03-07   04-       R
                                                              07
                             4   Milestone            04-     05-       R
                                                      07      07
                             5   Milestone            05-     05-       Y
                                                      07      07
                             6   Milestone            06-     06-       Y
                                                      07      07
                             7   Milestone            07-07   07-07     G
                             8   Milestone            09-07   09-07     G


QAD Proprietary
       How Product Management Review Is
       Conducted
                             Agenda

                  • Portfolio Plan (Current and   Chair:
                    New products)                  VP Product Development
                  • What Has Changed              Facilitator:
                  • Impact on Committed Plan       Product Coordinator

                  • New Product Performance       Participants:
                                                   Product Managers
                  • Re-prioritization
                                                   Technical Managers
                  • Balance to Resources           Demand Manager
                  • Issues                         Sales Representative
                                                   Supply Chain Manager
                  • Alignment with Strategy
                                                   Purchasing Manager
                  • Agree on Updated Portfolio     Finance Representative
                    Plan




QAD Proprietary
       Output of the Product Management Review
                  Output




                               Deliverable:
                                Valid and achievable
                                launch plan with
                                supporting assumptions,
                                based on the approved
                                business strategy




QAD Proprietary
       Project Mgt Review Is Needed to Align New
       Product, Demand, Supply, and Financial Plans

                                                                  Fit to strategy
                                           BUSINESS           Fit to business plan
                                         INTEGRATION           Fit to demand plan
                                                             Prioritize and resource




                                             S&OP
                      PROJECT                            PROJECT/
                     VISIBILITY &                      SUPPLY CHAIN
                      CONTROL                          INTEGRATION
                   Project management                   Resource allocation
                  People, processes, tools      Impact on demand/supply chain plan
                                                    Affect on current business


QAD Proprietary
   Financial / S&OP Plans Did Not Always Agree


          Executing to one set of plans while
           Finance expects and communicates
           different financial projections
          Multiple messages to Board and
           Street
          CEO / President / COO – Who do I
           believe?
          Finance wants (and needs) a seat
           at the table




QAD Proprietary
       Best Practice Is Now to Incorporate a
   O
       Financial Appraisal into the S&OP Process
   n
   e

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   a
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   m
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   r
   s


QAD Proprietary
       Purpose of Financial Appraisal Is…
                  • Evaluate the financial implications of the product
                    management, demand, and supply plans
                  • Identify issues to be addressed to achieve
                    alignment with the business plan and strategy


                                                                 Revenue
                                                                  Margin
                      Business                     Latest
                        Plan                     Projections       Costs
                         $                            $          Cash Flow




QAD Proprietary
       How Financial Appraisal Is Conducted
                                  Agenda


                  • Product Family Performance
                                                             Chair:
                       Revenue, margin, costs, variances
                                                              VP Finance
                  • Performance to Financial Strategic       Facilitator:
                    Objectives                                Controller
                                                             Participants:
                  • Changes Since Last Month
                                                              Financial Analysts
                  • Comfort With Financial Projections        Demand Manager
                                                              Supply Manager
                      Near Term and 6 to 24 Months
                                                              Product Management Coordinator
                      Assumptions                             S&OP Coordinator
                  • Are We Willing to Commit the Financial
                    Projections to the Board?

                  • Issues




QAD Proprietary
       Output of the Financial Appraisal

                                      Deliverable:
                  Identification of issues to be addressed through
                               Integrated Reconciliation




                                         =
                           Business                    Latest
                             Plan                    Projections
                              $                           $




QAD Proprietary
       How Are Misaligned Plans and Performance
       Concerns Resolved?




QAD Proprietary
       Purpose of the Integrated Reconciliation
       Process Is…


            • Resolve issues at the lowest practical
              level
            • Review status of strategic activities --
              on-time, on-budget, resources to
              support, desired impact
            • Identify decisions to be made at the
              Management Business Review




QAD Proprietary
       How the Integrated Reconciliation
       Process Is Conducted
                                Agenda


                  • Issues arising through S&OP
                                                    Chair:
                    cycle and proposed resolution
                                                     S&OP Coordinator
                  • Major changes and impact        Participants:
                  • Strategic activities review      Finance Coordinator
                                                     Demand Manager
                  • Latest financial view            Supply Manager
                  • Risks and opportunities          Product Management Coordinator
                                                     Others as Appropriate
                  • Conclusions from gap closing
                    scenarios

                  • Agree on recommendations




QAD Proprietary
   Output of the Integrated Reconciliation Process

           • Communication of issue resolution
           • Recommended alternative for
             decision at Management Business
             Review, when applicable




QAD Proprietary
       Management Business Review Approves
       Plans and Makes Needed Decisions




QAD Proprietary
  Business Leaders Ensure All Plans Are Aligned
     Agenda
                  Key performance indicators
                       Financial performance
                       Customer satisfaction            Chair:
                       Demand planning performance       GM
                       New products on-time
                       Supply performance               Participants:
                                                          Senior Staff/Board
                  Business trends
                                                          S&OP Coordinator
                  Analysis of major changes
                  Key issues reviewed
                       Alternatives presented
                       Opportunity/ vulnerability
                       Operational & financial impact
                       Decisions taken
                  Latest view aligned to:
                       Annual business plan
                       Strategy
                  Consensus and plans agreed upon
                  Input to next cycle


QAD Proprietary
       S&OP – Management’s Best Friend
  Enormous impact in                                                                Integrated Strategic &

   balancing cash flow,                                                                Business Planning


   cost, & customer service                                                       Sales & Operations Planning

  S&OP is the catalyst for                                    Performance
                                                                                 Financial Planning & Aggregation

                                                                                            Strategic Initiatives
                                                                                                                                  Resource

   reaching consensus
                                                               Management                                                        Management

                                                                               Aggregate        Aggregate           Aggregate
                                                                              Development         Sales              Supply

  Becomes the tool for                                                           Plan            Plan                Plan



   senior executives to                                                       Development        Demand               Supply

   manage the business
                                                                              Management        Management          Management




        “S&OP, a cornerstone for DDSN leader change management efforts,
        offers the greatest financial impact when it is implemented with other
        DDSN best practices to improve channel and supply network
        transparency.”
        AMR Research – ‘Sales and Operations Planning: A Cornerstone of DDSN Leadership’ - July 2005
QAD Proprietary
    S&OP and the “Perfect Lean Market”
   S&OP and Lean are mutually beneficial partners
    Lean tends to look at details over a shorter time period
    S&OP provides distance vision - providing the ability to
     predict capacity and material availability problems before
     they become a crises.
    Bottom-Line: More accurate and stable plans allow
     manufacturers to drive Lean improvements.

                                     Supplier             Supplier           Customer                      OEM
                                                         Scheduling          Schedules

                                                                             Production                  Finished
                                                                              Control                     Goods
                                                                                           Heijunka       LaredoI
                                                                               OXOX                          5 days
                                                                                           Schedule
                                      Dock
                                           Raw
                                         Materials
                                                I     Molding         Wiring              FA/Packaging     Dock
                                                                                                         Monterrey
                                       Molded Parts                                I
                                                                I              2.5 days
                                       Packaging Materials
                                                                         I
QAD Proprietary
    QAD’s SOP Solution
      Links day-to-day operations
       with business goals,                               Strategic Planning


       operational planning, and     D

       financial planning
                                     E            Business Planning (EOP)
                                     M
                                     A
                                     N
                                     D
                                                    Sales & Operations                                                                       Resource
                                     M                   Planning                                                                            Planning
                                     A            -------------------------------------------------------------------------------
                                                                                                                                               (RP)
                                     N                        Production Plan
                                     A
                                     G   Demand                                                                                     Supply
                                     E
                                     M                    Master Scheduling                                                                  Rough Cut
                                     E
                                                  ----------------------------------------------------------------------
                                                                                                                                              Capacity
                                     N                     Master Production                                                                  Planning
                                     T                         Schedule                                                                        (RCCP)


                                                  Materials Requirements
                                                                                                                                             CRP / DRP
                                                     Planning (MRP)



                                           Purchasing                                                Order Release



                                            Supplier                                                       Shop Floor
                                           Scheduling                                                       Control


QAD Proprietary
       QAD Sales & Operations Planning
      Monitor the plan on an
       ongoing basis using score
       cards and analytics,
       making ‘right-time’
       adjustments as needed
      Evaluates supplier
       capabilities when creating
       supply plan
      Identifies capacity, labor,
       supplier, material and
       financial obstacles to
       meeting the demand plan


QAD Proprietary
       IT and Information System Challenges
       to Support S&OP
        Data must be drawn from multiple sources and across functions –
         demand, supply, inventory, financial, product management,
         performance measurements
        Both quantitative and qualitative information is needed to develop
         an effective process
        Modeling and scenario capability is needed -- demand, production
         plan, rough cut capacity planning, inventory, financial, product
         launch
        Information and plans must be turned in “executive views” –
         graphical, to the point, aggregate, no sifting through detailed data




QAD Proprietary
       QAD’s SOP Solution Advisory Team
        Main Goals of Advisory Team
                  –   Get Feedback from the customer-base
                  –   Leverage industry expertise and business knowledge
                  –   Define and validate common requirements & reduce customization
                  –   Reduce Time to Market
        Value Proposition for Team Members
                  –   Members will influence QAD’s future SOP Solution
                  –   Direct access to Product Managers and QAD’s R&D Team
                  –   Early access to new solutions (Beta-Testing & Early Adopter Installation)
                  –   Network of affiliated companies. Ability to learn from each other
        What’s Expected of Team Members
                  – Share your valuable time and domain expertise
                  – Be on or planned to be on a recent release of QAD Applications
                  – Commitment to take the new development functionalities, implement
                    them and provide feedback to team
                  – Willingness to be a reference for new developed products


QAD Proprietary
       QAD SOP Enhanced Solution




QAD Proprietary
       Recommendations for Weathering the
       “Perfect Storm
      Investigate DDSN as a way to drive cost and
       service improvements (www.qad.com/ddsn.html)
      Start a S&OP Pilot, or Enhance your Current
       Process.
      Schedule a QAD Discovery / Vision Engagement
      Attend the QAD Virtual Annual Meeting May 17-20
      Join the QAD LinkedIn Community
       (www.linkedin.com)
      Utilize QAD Education Services

QAD Proprietary
       Where to go for assistance
     Phil Friedman – Vice-President Consumer and life Sciences Industries
       – PHF@QAD.com
       – 1-631-474-2055

     Mac McGary – Vice-President High Tech & Industrial Markets
       – XMX@QAD.com
       – 310 454 0714

     Charlie Eggerding – Vice-President Automotive Vertical Marketing
       – CRE@QAD.com
       – 1 616 285 6616

     Hank Canitz – Sr. Director, Vertical Marketing
       – HCC@QAD.com
       – 1-720-238-7439


QAD Proprietary
                  Thank You & Questions
                                              Hank Canitz
                       Senior Director Consumer Industries
                                                     QAD

QAD Proprietary

								
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