1. Top 10 Success Factors for Sales and Operations Planning Joachim Schulte, Senior Sales Consultant

2. Safe Harbor Statement
The following is intended to outline our general product direction. It is intended for information purposes only, and may not be incorporated into any contract. It is not a commitment to deliver any material, code, or functionality, and should not be relied upon in making purchasing decision. The development, release, and timing of any features or functionality described for Oracle’s products remains at the sole discretion of Oracle.

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Agenda
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Challenges with Sales & Operations Planning
Oracle Demantra overview
Using Oracle Demantra

4. National Brands Ltd. Consensus demand and supply plans Company
One of South Africa’s leading CPG companies, producing tea, coffee, biscuits, and snacks
Many new product introductions
Extensive promotional activity
Planning problem solved
Consensus demand and supply plans
Unique aspects of implementation
Introduction of an integrated Sales and Operations Planning Process
And here is an example of an Oracle customer that has successfully implemented Sales and Operations Planning.
Improved forecast accuracy by 13%
Cut finished goods stock levels by 20%
Improved service levels from 94% to 96%
More effective production planning

5. Demand Driven – Significant Benefits
Demand Driven leaders have:
15% less inventory
17% stronger order fulfillment
35% shorter cash-to-cash cycle times
Which translates to:
60% better profit margins
65% better EPS
2-3x the ROA
And this is important because better demand management leads directly to better business results.
Please also read the AMR article “Handbook on becoming Demand Driven” as background information
Improved Demand Management is the first important step !
Source: AMR Benchmark Analytix

6. Traditional Approach – Disconnected
High latency, limited collaboration, no consensus forecasting
Your Company
Financial
Planning
Production
Planning
New Product
Planning
Sales
Quotas
Marketing
Forecasting
Measurement
and Reporting
Multiple, non-integrated systems
Manual processes
Multiple data sources
Most companies today have a very unstructured and fragmented process for demand management. Each department tends to have a spreadsheet driven process with critical company data stored on spreadsheets. Departmental plans are not aligned, and there is misalignment between how departments are measured and overall company objectives. For example, sales management is often measured on meeting a sales quota that may be met by selling products that supply chain is unable to produce. This tends to lead to a very time consuming and manual process of trying to come to agreement on what “the forecast” is and this painful process typically yields an inaccurate forecast at the end.
Low forecast accuracy
Departmental orientation to demand forecasting
Misalignment between metrics and objectives
Not tied to Sales and Operations Planning process ?

7. Better Approach
Real-time demand sensing and collaborative consensus forecasting
Eliminate decision making latency by focusing on excellence in demand visibility
Sense demand more frequently and closer to the point of consumption
Replace spreadsheets with one number demand management - Collaborate with all constituents
Improve your forecast accuracy
Use advanced analytics and statistics
Shape demand
Promotion excellence and decomposition
Leverage granular demand signals (customer, channel, store, shelf)
Identify and simulate cross selling opportunities
Evolve to real-time S&OP
Profitable demand response
Identify supply side opportunities
Define and monitor customer based metrics
Get real time visibility to sales tactics (price breaks, promotions, deals)
A better approach is to replace all the spreadsheets with a common platform and automate collaboration to drive to consensus and a cohesive approved plan. This includes moving to a more proactive real time process that senses demand more frequently and closer to the the end point of consumption. This also includes shaping demand by managing sales incentives and promotions with financial targets and supply in mind instead of having disconnected marketing and sales plans. A real time demand management process is also the first step in evolving to a real time sales and operations planning process.

8. Top 10 Success Factors for S&OP
3 Critical Success Factors -- Tools
Use graphical presentation
Make it easy to grasp what has changed and any issues
Ensure an “integrated” tool is used -- same tool for each step in the process
Adapted from Top 10 Success Factors for Sales and Operations Planning by Oliver Wight

9. Sense Demand Real-Time
Involve all constituents and forecast closer to the point of consumption
Sense demand real-time, at more granular level, and closer to the point of consumption
Report and measure demand in the ways important to your business - role-based Collaboration Workbench for coordinated demand response
Support different demand data for each customer and channel
Easily add additional sources of information, such as external syndicated and POS data, using data integration profiles
Use multiple units of measure and multiple currencies
Collect information from multiple source ERP instances
Out-of-the-box integration for Oracle EBS, JDE E1
Leverage built-in intelligence to automatically select which level’s data to use for forecasting
Roll up data across unlimited hierarchies
Forecast at any level of time, product, and location aggregation
Completely meta data driven – change on the fly
Weekly and daily forecasting support
Simulate and compare different demand scenarios
Automate collaboration through workflow
Ensure all constituents submit numbers on time
Configurable push exception management automates review process
Moving to being more demand driven starts with sensing demand more real time. This includes sensing demand at a much more granular level and closer to the point of consumption. Oracle Demand Management enables you to consolidate demand data from many sources, and provides the scalability to enable collecting demand data at as detailed a level as you need. While it is completely integrated with the Oracle E-Business Suite and Oracle JD Edwards E1, it is open and flexible enabling you to bring in demand data from any external source as well. It is completely meta data driven, allowing you to bring in, consolidate, and view data at any levels of aggregation across unlimited hierarchies. It also provides workflow to automate collaboration and enable a management by exception paradigm.

10. Improve Forecast Accuracy
Designed for planners, not programmers (“PhD in a box”)
Superior Bayesian-Markov Analytics
Bayesian Estimator
Historical data
Bayesian combined model
Multiple causal factors
Forecast
Estimator’s models
Bayesian mix modeling
15 model library
Auto-regressive moving average (ARMA)
Regression integrated winters
Logistic and logarithmic models
Ridge regression, Markov chain regression
Intermittent regression
Unlimited causal factors
Seasonality, weather, market indicators
Base + price + multi-event lift decomposition
Promotion effects
Cross-product and cross-location effects
Pre and post event
Automatic outlier detection
Trend long, short, dampening
Missing data interpolation
Shape modeling and auto-correction
Regime change
Fit and forecast validation
It provides best in class Bayesian-Markov statistical modeling that represents the next stage in the evolution from trial and error, to best fit methods, to blended models that incorporate all the factors that influence demand for accurate prediction of future demand.

11. Shape Demand for Profitability
Leverage Advanced Forecasting and Modeling to understand the real impact
of promotions and sales incentives
Past
Future
What incremental volume will result from a marketing program?
How will it impact the sales of other products?
How does a marketing program at a brand or product family level impact a specific item?
What were the indirect effects such as cannibalization and consumer stockpiling?
What is the ROI on my marketing and trade spending?
What is the predicted impact of future activity?
How does a promotion impact shipments and DC replenishments?
Another aspect of shaping demand is managing sales incentives and promotions to influence demand. The key to doing this profitably is detailed and accurate analysis of the true affects of incentives and promotions on demand.

12. Welch’s Live on Demand Management, Trade Management Company
Leading producer of juices and jams
> Mio $750 Mio. revenues world-wide
Thousands of different promotions per year
Planning problem solved
Promotion planning synchronized with demand planning
Unique aspects of implementation
„One-Number“ Forecast as base for improved forecasting
Promotion planning integrated with demand planning
> 100 sales reps plan promotions
Post event analysis of promotions
And here is an example of an Oracle customer that has successfully implemented Sales and Operations Planning.
Increased forecast accuracy at SKU level
Enables trade promotion planning to be integrated with RT S&OP
Reduced supply chain costs
Improved HQ and sales planning productivity

13. Top 10 Success Factors for S&OP
3 Critical Success Factors -- Process
Roles and responsibilities are defined and communicated
Manage by exception – and focus on the key issues
Gap closure (volume, revenue, and profit expectations)
Resource issues
Alignment of demand, supply, and new product plans
Performance issues
Implement quickly and improve each month
Adapted from Top 10 Success Factors for Sales and Operations Planning by Oliver Wight

14. Top 10 Success Factors for S&OP
3 Critical Success Factors -- Leadership
Senior executives do not delegate their participation in the S&OP process
Senior executives utilize S&OP as their process for managing the business
Senior executives insist on the truth
Adapted from Top 10 Success Factors for Sales and Operations Planning by Oliver Wight

15. Consensus Planning
Inclusive consensus process improves plan quality and
acceptance
Sales
Mgrs
Forecast
Sales: Plan by Product Line
Plant
Operations
Manufacturing: Plan by Plant
Sales Reps
Marketing
Marketing: Plan by Region
Asia
Americas
Finance
Finance: Budget in Dollars
Create consensus plan through continuous collaboration across sales, marketing, finance and customers
Each participant gets tailored view
Configurable worksheets
Combine top down business planning with precise bottom up forecasts to project payments
Automate process with workflow
Send reminders
Task notifications in dashboard

16. Evolve to Real-Time S&OP
Inputs display from entire collaboration group – Finance, Marketing, Operations,
Key Customers and Suppliers
Each S&OP participant has a configurable role-based view
Integrated approval workflow process
And here is a screenshot example that illustrates how each participant can have a configurable role based view that includes inputs from all the other participants and an integrated workflow approval process.
Review historical accuracy for each input

17. Interactive Management Review
Typical S&OP Management Review agenda
Sales and Operations Planning Process
What has changed since last month?
Are we on plan financially?
How are we performing to performance metrics?
What new risks do we need to consider?
What decisions need to be made now?
What decisions need to be made in the near future?
How are product families performing?
Are we on track with product development?
Do we have any critical constraints?
Is there any need to revise long term plans?
Demand Review
Product Review
Management Review
Shape
Respond
Sense
A typical agenda for the management review meeting, or Sales and Operations Planning Meeting, would consist of questions like these listed on the slide. These were adapted from the textbook on the subject called Enterprise Sales and Operations Planning by George E. Palmatier and Colleen Crum. Ultimately what RTS&OP enables is accurate and efficient answers to these key questions and decisions necessary to drive your business complete with interactive simulation to answer the questions that come up during the meeting in real time.
Execute and Measure
Supply Review
Adapted from “Enterprise Sales and Operations Planning”
by Palmatier & Crum

18. VTech Live on Demand Management, Real-Time S&OP Company
$1 billion in revenues, operating worldwide
Leading provider of cordless phones and electronic children’s toys
85% of US revenues through Wal-Mart, Target, Best Buy, and Circuit City
Planning problem solved
Real-time S&OP process driven by one demand number
Seasonal demand plans
Unique aspects of implementation
Generates forecasts from customer POS data
Web-collaboration with customers
Automatic forecast evaluation and exception management
Implementation within 90 days
And here is an example of an Oracle customer that has successfully implemented Sales and Operations Planning.
Increased order fill rate from 55% to 95%
Increased inventory turns by 100%
Reduced price protection claims by 40%
Reduced logistics costs by 65%

19. Top 10 Success Factors for S&OP
People
Tools
Process
Adapted from Top 10 Success Factors for Sales and Operations Planning by Oliver Wight

20. Oracle Closed Loop S&OP Planning
Demand Planning
Supply Planning
S&OP Meeting
Demand Data
Market Demand
Forecasting
New Product
Promotion Planning
Consensus
Forecast
Constraint-Based Production Scheduling
Strategic Network Optimization
Evaluate Supply
Constraints
S&OP Review
EDI 867
IMS data
Excel
Pedigree
xml
S&OP Outputs:
Service levels
Profitability
Inventory Levels
Promotions
DRP
MPS
Safety Stock Demand
Inventory
Optimization
Oracle delivers a S&OP solution as a completely integrated process. The sales and operations planning process typically starts with the capturing of all demand into one central place. Once you have this data you can determine your consensus forecast in line with your new product strategy. Your consensus forecast is the input to the process of balancing supply, demand, and budgets. You can leverage inventory optimization to determine time-phased inventory targets based on the consensus forecast and budgets, and use both the inventory optimization and forecasting outputs to determine the supply plan and allocations. The constrained supply plan feeds back into demand planning and management can then review and compare with consensus forecast and make decisions on the sales plan, production plan, and bookings forecast. The entire process is driven strongly by exception management and leverages the (input) data that is already present in your system.
Measure Financial and Customer Service Level Results
Execute

21. Oracle Demantra Overview
Complete, best-in-class and integrated planning process platform
Future *
Integrated
Planning
Functions
Products
Platform E1
EBS …
LegacyERP *
WFL
Common planning
data model
Connectors
Network
Design
Demand Sensing
And Shaping
Postponement
Optimization
Holistic
Supply
Promise,
Distribute, and
Replenish
Execute to plan
Embedded
Analytics
Role-based Portals
Preconfigured
Worksheets and
Workbenches
Operational
Excellence
Real-Time S&OP
Demand driven
adaptive planning
Multi-Enterprise
Collaboration
Trading Partners
Best in class
Business
Processes
Supply Chain
Risk Management
Strategic
Inventory
Real-Time
Sales &
Operations
Demand
Management
& Advanced
Forecasting
Predictive
Trade Planning &
Advanced
Production
Scheduling
Global
Order
Promising
Collaborative
Demantra
Within the context of the overall collaborative E-Business Suite, Oracle provides a complete e-business planning platform.
It is based on a common planning data model and platform that connects all products to deliver integrated planning functions that in turn enable best business process such as supply chain risk management, demand driven adaptive planning, supply chain excellence, sales and operations planning, and multi-enterprise collaboration.

22. State-of-the-art and Scalable Architecture
Handle millions of combination
Web-based user interface personalization
Dynamically configure
Drag-and-drop
Tailor workflow processes to unique company requirements
Demand Management adapts to your business process
Create alerts and exception rules
Customize reports on-the-fly
Dynamic open link to MS Excel
Work in disconnected mode
Oracle Demantra Demand Management is based on a state of the art architecture that provides unprecedented scalability.
Wendy's has ~1M combinations, 730 history daily buckets,
48 half-hour buckets per day for 90 historical days and 90 future days
- over 9B data points

23. Proven Success – Many Live Customers
And here is a sampling of who some of those customers are

24. Oracle Demantra Demand Management
Evolve at your own pace to a best-in-class solution
Start
anywhere
Forecast based on attributes and product characteristics
Compute promotional lifts and analyze impact of demand drivers
Assumption based forecasting
Leverage POS and channel data
Forecast new product introductions
Collaborate with customers
Use advanced statistics and causal factors
Complex alerts and custom worksheets
Leverage POS and channel data
Forecast new product introductions
Collaborate with customers
Use advanced statistics and causal factors
Complex alerts and custom worksheets
Manage rolling forecasts
Collaborate with all constituents
on one number
Use basic statistics, alerts, and
seeded worksheets
Tailor worksheets for individual users
Manage rolling forecasts
Collaborate with all constituents
on one number
Use basic statistics, alerts, and
seeded worksheets
Tailor worksheets for individual users
Manage rolling forecasts
Collaborate with all constituents
on one number
Use basic statistics, alerts, and
seeded worksheets
Tailor worksheets for individual users
Eliminate
spreadsheets
And maybe most importantly, it enables you to focus on what is important to you, and evolve at your own pace.
From less complex to best in class

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Summary
To summarize …

26. Oracle Demantra Demand Management
Real-time demand sensing and collaborative consensus forecasting
Sense demand real-time
Sense demand more frequently, closer to the point of consumption
Capture demand and forecast at more granular level (store, shelf, attributes, product characteristics)
Achieve consensus demand number more quickly by involving all constituents at the same time, including customers
Quickly identify and react to demand changes and exceptions
Improve forecast accuracy
Leverage advanced statistics for more accurate demand number
Use any combination of quantitative or qualitative data to establish your base line forecast
High precision statistical forecasting, no statistical background required – Superior Bayesian-Markov forecast analytics
Forecast based on attributes and characteristics
Leverage Advanced Forecast Modeling for promotion lift decomposition and causal analysis
Shape demand for profitability
Plan new product introductions
Plan promotions and sales incentives
Identify cross selling opportunities
Evolve to real-time S&OP
Profitably balance supply, demand, and budgets
CHANNEL DATA
Collaboration
Workbench
Marketing
forecast
Order
history
Customer
sales
Shipments
Oracle Demantra Demand Management enables real time sensing, shaping and responding to demand. It enables you to sense demand real time, improve your forecast accuracy, shape your demand for profitability, and provides a path to evolve to a real time sales and operations planning process.
Demand Hub and Seeded Worksheets

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