Presentation is loading. Please wait.

Presentation is loading. Please wait.

Tom Wallace & Bob Stahl www.tfwallace.com Executive S&OP A Presentation to: APICS Southeast Florida by Tom Wallace 3-20-08.

Similar presentations


Presentation on theme: "Tom Wallace & Bob Stahl www.tfwallace.com Executive S&OP A Presentation to: APICS Southeast Florida by Tom Wallace 3-20-08."— Presentation transcript:

1 Tom Wallace & Bob Stahl Executive S&OP A Presentation to: APICS Southeast Florida by Tom Wallace

2 Tom Wallace & Bob Stahl Agenda Executive S&OP: Role, Structure and Benefits Implementation The Future of S&OP

3 Tom Wallace & Bob Stahl The Four Fundamentals Demand Supply Volume Mix How Much? Rates The Big Picture Families Strategy/Policy/Risk Monthly/out to 36 Mos Which Ones? Timing/Sequence The Details Products Tactics/Execution Weekly/Daily 1-3 Mos

4 Tom Wallace & Bob Stahl Sales & Operations Planning DemandSupply Volume Mix Executive S&OP Master Scheduling Supplier and Plant Scheduling Distribution Scheduling Demand Planning/ Forecasting Supply (Capacity) Planning

5 Tom Wallace & Bob Stahl More Terminology Changes? Sales & Operations Planning may become the successor term to ERP/MRPII Thus the term Executive S&OP was developed to Eliminate confusion Avoid what happened with ERP Put high focus on the Executive role

6 Tom Wallace & Bob Stahl Executive S&OP... Is an executive decision-making process Balances demand and supply Deals with volume in both units and $$$ Ties operational plans to financial plans: one set of numbers Is the forum for setting relevant strategy and policy Is what we called, for years, Sales & Operations Planning

7 Tom Wallace & Bob Stahl The Leader of the Business Unit (General Manager, President, COO) Needs to be Hands-On with Executive S&OP: 1.Stewardship 2.Leadership Break ties Set high standards Motivate Monthly Time Commitment: 1.5 The Role of Top Management hours

8 Tom Wallace & Bob Stahl Step #5 Executive Meeting Decisions & Game Plan Step #4 Pre- Meeting Conflict Resolution, Recommendations & Agenda for Exec. Mtg. Step #1 Data Gathering End of Month Sales Actuals, Statistical Forecasts & Supply Actuals Step #2 Demand Planning Management Forecast 1st-pass spreadsheets Step #3 Supply Planning Capacity constraints 2nd-pass spreadsheets Heavy Lifting The Executive S&OP Process

9 Tom Wallace & Bob Stahl Three Examples of Best Practices Three (of 13) Companies Studied: High Seasonality High Cyclicality Highly Complex New Product Launch

10 Tom Wallace & Bob Stahl Executive S&OP in Make-to-Stock w/ High Seasonality: The Scotts Co. Executive S&OP in Make-to-Stock w/ High Seasonality: The Scotts Co. Important Questions: When start Pre-Build? At what rates? Which SKUs? When ramp up & how much? When ramp down? Pre-Build S&OP helps to answer these & other questions

11 Tom Wallace & Bob Stahl The Scotts Company During the last four years, almost half of the companys increase in earnings has come from Supply Chain savings: inventory down, manufacturing efficiency up, purchase and transportation costs down. All of these are due to improved planning. Ken Reiff Vice President, Product Planning

12 Tom Wallace & Bob Stahl S&OP in Make-to-Order w/ Extreme Cyclicality: Cast-Fab Cast-Fab Technologies – Year-to-Year Sales Change %Chg up down up down up Implemented S&OP Some competitors go out of business Acquired from Cinti Milacron 46!!! 12

13 Tom Wallace & Bob Stahl Cast-Fab Technologies During 2004, we posted sales increases of over 40%, which meant employee call-backs, retraining, new hires, initial training, getting up the learning curve and so forth. During the same year, we had productivity gains of up to 3%! We never would have believed this was possible if we hadnt done it. S&OP played a key role in this; it gave us the forward visibility to make the right decisions on a timely basis. Ross Bushman President and COO

14 Tom Wallace & Bob Stahl New Product Launch in the Pharmaceutical Industry Multiple stages of testing Multiple approvals by FDA Multiple years Multiple 100s of millions of dollars

15 Tom Wallace & Bob Stahl Eli Lilly and Company New Product Launch Performance: Industry AverageLilly Years Required (avg per product) >14 9 <11

16 Tom Wallace & Bob Stahl Eli Lilly & Company In the past three years we have launched 9 new products and met all demand despite 2 products that sold significantly above the high-side forecast. Without Global Sales & Operations Planning, we would have been driven to reaction mode, which could have resulted in an increase in investment in new assets, a slow down in our launch plans, and/or missed demand opportunities. Ron Bohl Supply Chain Coordinator

17 Tom Wallace & Bob Stahl These 3 Examples: A Common Thread Executive S&OP is being used extensively in areas of the business that are: Mission Critical Very Difficult to Manage

18 Tom Wallace & Bob Stahl Hard Benefits Customer ServiceUP Inventory DOWN ObsolescenceDOWN Freight CostsDOWN Order Lead TimesDOWN Supplier Lead TimesDOWN Time to Launch New Products DOWN Plant ProductivityUP

19 Tom Wallace & Bob Stahl Soft Benefits Enhanced Teamwork Improved Communications Better Decisions with Less Effort and Time Better $$$ Plans with Less Effort and Time Greater Accountability Greater Control Window into the Future Top Managements Handle on the Business

20 Tom Wallace & Bob Stahl Agenda Sales & Operations Planning: Role, Structure and Benefits Implementation The Future of Executive S&OP

21 Tom Wallace & Bob Stahl The Real Issue is not in understanding S&OP. Thats easy. The hard part is... Organizational Behavior Change Changing the way we do our jobs The hard stuff is the soft stuff.

22 Tom Wallace & Bob Stahl Implementing Executive S&OP Is Different Active, Hands-on Participation by the Leader and Staff The leader of the business ( president, COO, CEO, general manager) must provide: Support Funding Commitment Leadership So whats new? Each and Every Month

23 Tom Wallace & Bob Stahl Implementing Executive S&OP Is Different Highly focused on Top Management Relatively few people Low cost/high impact

24 Tom Wallace & Bob Stahl Implementation Principles Implementation begins and ends with the Leader of the business Build it and they will come carries a low probability for success Gain and hold the high ground and success will almost always follow

25

26 Tom Wallace & Bob Stahl The Implementation Path Months Business Improvement Phase I Live Pilot Phase II Expansion Live Pilot Go/No-Go #2 Phase III $$$ Integration Executive Briefing Go/No-Go #1 Kickoff Session Low Risk Low Cost

27 Month #1 Assignment of Responsibilities Kickoff Education & Planning Development of Project Schedule Families & Sub-Families (Pilot Family) Data Definitions, Sources & Displays Month #1 Assignment of Responsibilities Kickoff Education & Planning Development of Project Schedule Families & Sub-Families (Pilot Family) Data Definitions, Sources & Displays Month #3 Pilot Preparation & Execution Go/No-Go Decision #2 Month #3 Pilot Preparation & Execution Go/No-Go Decision #2 Month #2 Demand Planning Processes & Data Feeds Supply Planning Processes & Data Feeds Month #2 Demand Planning Processes & Data Feeds Supply Planning Processes & Data Feeds Executive Briefing & Go/No-Go Decision #1 Executive Briefing & Go/No-Go Decision #1 Phase I Preparation Phase II Expansion Phase III $$$ Integration Low Risk Low Cost Months 4 – 6 Add All Product Families Full Supply Planning Limited Financials Months 4 – 6 Add All Product Families Full Supply Planning Limited Financials Months 7-9 Full Financial Integration Institutionalize the Process Months 7-9 Full Financial Integration Institutionalize the Process

28 Tom Wallace & Bob Stahl Agenda Sales & Operations Planning: Role, Structure and Benefits Implementation The Future of Executive S&OP

29 Tom Wallace & Bob Stahl The Future of S&OP: Growth Factors Success breeds success Lean Manufacturing and S&OP Globalization New users outside traditional manufacturing S&OP specific software Greater financial integration, power and utility A growing presence in the executive suite

30 Tom Wallace & Bob Stahl Implications for APICS Members (CPIM) Premises: Executive S&OP is a powerful tool for top management Its here to stay and its growing Its in APICS space CPIMs know more about Sales & Operations Planning than most others Therefore, CPIMs are positioned to take part in this growth and to be more valuable to their companies

31 Tom Wallace & Bob Stahl Implications of Executive S&OP for APICS Its in APICS space. It lives in the Executive Suite It can help attract new members: –executive perception –non-manufacturing companies APICS can play a – the? – leadership role in the widespread adoption of Executive S&OP

32 Tom Wallace & Bob Stahl APICS is Getting On Board with S&OP S&OP Conference – Chicago – June 19, 20 Demand/S&OP Flight at APICS Conference in Kansas City – September Frequent Webinars (most recent: 2-25: Sales & Operations Planning – The Executives Role)

33 Tom Wallace & Bob Stahl Thanks for Listening Go to for:www.tfwallace.com Copies of slides Periodic newsletter White papers Books and videos


Download ppt "Tom Wallace & Bob Stahl www.tfwallace.com Executive S&OP A Presentation to: APICS Southeast Florida by Tom Wallace 3-20-08."

Similar presentations


Ads by Google