Presentation is loading. Please wait.

Presentation is loading. Please wait.

EXECUTIVE S&OP by Tom Wallace WWW.TFWALLACE.COM Myths, Misunderstandings and Misinformation about S&OP A Presentation by Tom Wallace for IBF Phoenix –

Similar presentations


Presentation on theme: "EXECUTIVE S&OP by Tom Wallace WWW.TFWALLACE.COM Myths, Misunderstandings and Misinformation about S&OP A Presentation by Tom Wallace for IBF Phoenix –"— Presentation transcript:

1 EXECUTIVE S&OP by Tom Wallace WWW.TFWALLACE.COM Myths, Misunderstandings and Misinformation about S&OP A Presentation by Tom Wallace for IBF Phoenix – February 22, 2010

2 EXECUTIVE S&OP by Tom Wallace WWW.TFWALLACE.COM The Four Fundamentals Demand Supply Volume Mix Sales & Operations Planning X How Much? Rates The Big Picture Product Families Strategy/Policy/Risk Monthly/18 months+ Top Management Which Ones? Timing/Sequence The Details Products, SKUs, Orders Tactics/Execution Wkly/Daily, 2 days – 6 mos Middle Management

3 EXECUTIVE S&OP by Tom Wallace WWW.TFWALLACE.COM Sales & Operations Planning DemandSupply Volume Mix Executive S&OP Master Scheduling Supplier and Plant Scheduling Distribution Scheduling Demand Planning/ Forecasting Supply (Capacity) Planning Operational S&OP ?????

4 EXECUTIVE S&OP by Tom Wallace WWW.TFWALLACE.COM Myth #1: “S&OP’s a supply chain thing” Reality: Executive S&OP is a supply chain thing and a marketing thing and a sales thing and a finance thing and a manufacturing thing and a new product development thing and a general management thing

5 EXECUTIVE S&OP by Tom Wallace WWW.TFWALLACE.COM Soft Benefits Enhanced Teamwork Improved Communications - Institutionalized Better Decisions with Less Effort and Time Better $$$ Plans with Less Effort and Time Tighter Linkage with Strategy Greater Accountability Greater Control Window into the Future

6 EXECUTIVE S&OP by Tom Wallace WWW.TFWALLACE.COM Myth #2: “S&OP’s all about balancing demand and supply” Reality: Exec S&OP balances demand & supply and integrates financial and operational planning and links strategy to ongoing operations and impacts marketing strategy and enhances risk management and streamlines annual planning and on and on...

7 EXECUTIVE S&OP by Tom Wallace WWW.TFWALLACE.COM Strategic or Tactical? Strategy Tactics Executive S&OP

8 EXECUTIVE S&OP by Tom Wallace WWW.TFWALLACE.COM Myth #3: “S&OP takes too much of Top Management’s time” Reality: Monthly Time Requirement for the Leader of the Business = 1.5 * Executive staff time could be more than this. hours*

9 EXECUTIVE S&OP by Tom Wallace WWW.TFWALLACE.COM Step #5 Executive Meeting Decisions & Game Plan Step #4 Pre- Meeting Decisions, Recommendations & Agenda for Exec Meeting 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

10 EXECUTIVE S&OP by Tom Wallace WWW.TFWALLACE.COM Exec Meeting Pre- Meeting Data Gathering Demand Planning Supply Planning New Product Development Involvement Finance Department Involvement Role of Finance and New Product Development

11 EXECUTIVE S&OP by Tom Wallace WWW.TFWALLACE.COM Myth #4: “We’ll Never Get S&OP to Work; We Don’t Have Enough Teamwork” Reality: Teamwork Is A Result, Not A Prerequisite Q. What If You’ve Implemented S&OP and your teamwork hasn’t improved? A. You Didn’t Do It Right

12 EXECUTIVE S&OP by Tom Wallace WWW.TFWALLACE.COM Soft Benefits Enhanced Teamwork Improved Communications - Institutionalized Better Decisions with Less Effort and Time Better $$$ Plans with Less Effort and Time Tighter Linkage with Strategy Greater Accountability Greater Control Window into the Future

13 EXECUTIVE S&OP by Tom Wallace WWW.TFWALLACE.COM Myth #6: “S&OP Is Too Rigid; Our Business Changes Too Rapidly For S&OP” Reality: Executive S&OP is all about change

14 EXECUTIVE S&OP by Tom Wallace WWW.TFWALLACE.COM Tools & Techniques Increase Reliability Enhance Coordination Reduce Waste & Time Total Quality, Six Sigma, Poka-Yoke, ISO + others Lean Mfg., Just-In-Time, Quick Changeover (SMED), Flow + others Sales & Operations Planning, ERP, Kanban, VMI, + others XX X

15 EXECUTIVE S&OP by Tom Wallace WWW.TFWALLACE.COM Complexity, Change and Coordination COMPLEXITY AND THE RATE OF CHANGE NEED FOR EFFECTIVE COORDINATION PROCESSES Executive S&OP is the Primary Coordination Process

16 EXECUTIVE S&OP by Tom Wallace WWW.TFWALLACE.COM Myth # 7: “We Can’t Use S&OP Because We’re Totally Outsourced” Reality: Executive S&OP Doesn’t Care Who Owns The Factory Heavily Outsourced Companies May Need Executive S&OP More Than Others

17 EXECUTIVE S&OP by Tom Wallace WWW.TFWALLACE.COM Myth #8: “Our Company Is Too Big for S&OP” Reality: Executive S&OP operates independently of company size Procter & Gamble ~ $80 Billion Microsoft ~ $59 “ Dow Chemical ~ $57 “ Cast Fab Technologies ~ $40 Million

18 EXECUTIVE S&OP by Tom Wallace WWW.TFWALLACE.COM Myth #9: “Our Forecasts Are Not Accurate Enough For S&OP” Reality: Executive S&OP Does Not Require “Accurate” Forecasts

19 EXECUTIVE S&OP by Tom Wallace WWW.TFWALLACE.COM ForecastingForecasting 1. Reasoned 2. Reasonable 3. Reviewed Frequently 4. Represent the Total Demand THE FOUR R’s: Current Customers New Customers Competition Economic Outlook New Products Pricing Strategy Promotions Bid Activity Management Directives Intra-Company Demand History (Data) Other Process Inputs Process Output

20 EXECUTIVE S&OP by Tom Wallace WWW.TFWALLACE.COM Myth #10: “S&OP Is Simple; All You Need Is A Few Spreadsheets” Reality: Implementing Executive S&OP Is All About Change Management

21 EXECUTIVE S&OP by Tom Wallace WWW.TFWALLACE.COM The Priorities C: Software, Tools B: Process & Data A: People, Mindset

22 EXECUTIVE S&OP by Tom Wallace WWW.TFWALLACE.COM Myth #11: “We Can’t Afford To Buy More Software To Do S&OP ” Reality: You Do Not Need New Software to Make Executive S&OP Work Most of the successful users of the process use Excel (or similar)

23 EXECUTIVE S&OP by Tom Wallace WWW.TFWALLACE.COM So, What To Do About Software? Options: 1.Use spreadsheet software 2.Use S&OP specific software 3.Hybrid: start with spreadsheet switch to specific later When in doubt, pick 3.

24 EXECUTIVE S&OP by Tom Wallace WWW.TFWALLACE.COM Myth #12: “We Can’t Do S&OP. THEY Will Never Participate” Reality: People Can and Do Change

25 EXECUTIVE S&OP by Tom Wallace WWW.TFWALLACE.COM Myth #12: “We Can’t Do S&OP. THEY Will Never Participate” Who Are THEY? Top Management? Sales? Marketing? Finance? All of the above?

26 EXECUTIVE S&OP by Tom Wallace WWW.TFWALLACE.COM Myth #12: “We Can’t Do S&OP. THEY Will Never Participate” Why not? Are they bad people? No, it’s because they don’t understand it. They don’t understand it, because they haven’t been taught. “It’s all about change management” Kathy Budd Dow Chemical

27

28 EXECUTIVE S&OP by Tom Wallace WWW.TFWALLACE.COM Thanks for Being Here! Go to www.tfwallace.com for:www.tfwallace.com S&OP 101 (free) Implementation Information (free) The S&OP Forum Periodic newsletters (free) White papers (free) S&OP Effectiveness Checklist (free) Blog (this summer - free) Q&A (this summer - free) Books and videos ($$$) To talk: 513-281-0500


Download ppt "EXECUTIVE S&OP by Tom Wallace WWW.TFWALLACE.COM Myths, Misunderstandings and Misinformation about S&OP A Presentation by Tom Wallace for IBF Phoenix –"

Similar presentations


Ads by Google