Page1

Strategies for making the most of

SAP technology
that supports
Sales and Operations Planning
(S&OP)

March 19th, 2012

Introduction
Goals For This Session

S&OP An Evolving Process Model

Bringing the Maturity Model & Technology Together
The Bottom Line
Questions & Comments

Provide an overview of the evolving and changing S&OP maturity

model for today's supply chain, and understand how it differs from
general models of the past.
Examine an evaluation of your organization's S&OP maturity level.
See which elements of SAP match specific levels of maturity of your
S&OP process allowing you to develop the technology portion of
your S&OP roadmap

Gain insights that will help you determine if additional SAP technology
investments are in order

A Look at History

Process Evolution
&
Enabling Technologies

11

Align

Building Horizontal
Connector

Adapt

Continuous
Testing
Learning
Improving

Orchestrate

Resilient
Reliable
Right Product

Sense
Demand
and Supply

Shape
Demand and
Supply based
on Market

Demand
Volatility

Right Place
Right Time

Supply
Volatility

Right Cost

Efficient
Cost

Procure to
pay/order to
cash

12

13

14

Stage 1: Characteristics

Discussion: What is the most feasible plan?

Technologies: Constraint-based planning with a focus on volume.
Decision: Trade-offs between deliver and make to meet a fixed sales
plan.

15

Goal:

A feasible plan

Model the network

Recognize and respect constraints
Gain plan visibility

Key:
Demand Planning

Supply Planning

Key Technology Points

Processes Enabled

Enabling Technology

Statistical Demand Forecasting

Supply Planning
Production Planning & Scheduling

SCM: Demand Planning

SCM: Basic Supply Network Planning
ECC: Production Planning
BO: Reporting & Analytics to Support KPIs

16

Stage 2 Characteristics:

Discussion: What is the right trade-off between go-to-market

strategies and supply chain capabilities (usually make and
deliver)?
Technologies: Advanced planning solutions with a focus on
volume. Increased needs for what-if analysis for both demand and
supply.
Decision: Trade-offs between go to market plans and supply
chain design.

17

What benefits have you received from your work with S&OP processes?

18

Goal:
A Feasible plan
Match Demand with Supply
Key:
Demand Planning

Supply Planning

Model the network

Recognize and respect constraints
Gain plan visibility

What-if analysis
Multi-tier inventory analysis
Network design

Demand Translation Platform

Inventory Planning

Key Technology Points

Processes Enabled

Enabling Technology

Statistical Demand Forecasting

Supply Planning
Inventory Planning
Production Planning & Scheduling
Network Validation & Rationalization
Scenario Management

SCM: Demand Planning

SCM: Advanced Supply Network Planning
SCM: PP/DS
Smart Ops: Multi Echelon Inventory Planning
SCM: Supply Chain Analytics
SCM: Strategic Supply Chain Design

19

Inventory Definitions:
Form

Function

Raw Material

Cycle Stock

Semi-finished Product

Forward coverage of Events:

Promotions, New Product Launch, etc.

Finished Product

Safety Stock

Finished Product in the Channel

Seasonal Stock
SLOB: Slow and Obsolete

Level

How much?
Where?

Form & Function

What is the right form?

What is the right function for
inventory to play in the supply
chain?

20

Sell

Deliver

Make

Source

Service

Network Design: What is the role of inventory in our network design?

Inventory Configuration: What is the right Form & Function of
Inventory?

Inventory Policy: What is the Right Level of inventory?

21

Stage 3 Characteristics:

Discussion: What is the right trade-off between

go-to-market strategies and supply chain
capabilities to improve profitability? Mitigate
risk?
Technologies: Advanced planning solutions
combined with financial modeling and inventory
optimization with a focus on profitability. Need
for a demand translation platform.
Decision: Trade-offs between go to market
plans and supply chain design to maximize
profitability.

22

Increasing need for

value network strategy
alignment

Increasing levels of
granularity

23

24

Letter

&
OP

Stage 1-2

Stage 3-5

Ask sales

Focus on market drivers:

How do we best shape demand?

Direct integration to supply

Design of the value chain to

optimize trade-offs, minimize risk,
balance cycles, and orchestrate
demand

Manufacturing plan

Trade-offs between make, source

and deliver

25

Goal:

Model the network

Recognize and respect constraints
Gain plan visibility

Match Demand with Supply

What-if analysis
Multi-tier inventory analysis
Network design

Deliver the most

Profitable Plan

Demand translation
Supply orchestration
Optimize financial drivers

A Feasible plan

Key:
Demand Planning

Supply Planning

Inventory Planning

Financial Planning Demand Translation Platform

Key Technology Points

Processes Enabled

Enabling Technology

Financial Impact Analysis

Business Planning & Consolidation
Consensus Demand Planning
Capacity Planning

SAP BO: S&OP Tools

SAP BO: Financial Analytics & Scenarios
Business Analytics: Asset Analytics

26

Stage 4 Characteristics:
Discussion: How do we shorten the time to
sense market changes to make the right trade-off
between go-to-market strategies and supply
chain capabilities to improve profitability and
mitigate risk?
Technologies: Advanced planning solutions
combined with financial modeling and inventory
optimization, plus demand sensing with a focus
on profitability. Need for a demand translation
platform and S&OP execution capabilities.
Decision: Trade-offs between go-to-market
plans and supply chain design to maximize
profitability.

27

To Sense and Shape Demand to

Drive a Profitable Response

Demand Shaping includes:

New product launch

Price management

Trade promotion

Sales incentives

Marketing programs

29

Goal:

Model the network

Recognize and respect constraints
Gain plan visibility

Match Demand with Supply

What-if analysis
Multi-tier inventory analysis
Network design

Deliver the most Profitable

Plan

Demand translation
Supply orchestration
Optimize financial drivers

Sense channel demand

Shape demand
Drive the most profitable response

A Feasible plan

Demand Driven

Key:
Demand Planning

Supply Planning

Inventory Planning

Financial Planning Demand Translation Platform

Market Sensing

30

Goal:
Demand Driven

Sense channel demand

Shape demand
Drive the most profitable response

Key:
Demand Planning

Supply Planning

Inventory Planning

Financial Planning Demand Translation Platform

Key Technology Points

Processes Enabled

Enabling Technology

Demand Sensing
Demand Shaping
Profitability Management

Demand Sensing
Trade & Promotion Management
Business Analytics: Asset Analytics
Business Objects: Dashboards

Market Sensing

31

32

An adaptive network focused on driving value-based

outcomes by sensing and translating market changes
(buy and sell-side markets) bi-directionally with near-real
time data latency to align, sell, deliver, make, and
sourcing operations.

A horizontal process to sense and optimize from market to

market.

34

Goal:

Model the network

Recognize and respect constraints
Gain plan visibility

Match Demand with Supply

What-if analysis
Multi-tier inventory analysis
Network design

Deliver the most Profitable

Plan

Demand translation
Supply orchestration
Optimize financial drivers

Sense channel demand

Shape demand
Drive the most profitable response

Sense buy and sell-side market

conditions
Bi-directionally orchestrate demand

A Feasible plan

Demand Driven
Market-driven

Key:
Demand Planning

Supply Planning

Inventory Planning

Financial Planning Demand Translation Platform

Market Sensing

35

Goal:

Market-driven

Sense buy and sell-side market

conditions
Bi-directionally orchestrate demand

Key:
Demand Planning

Supply Planning

Inventory Planning

Financial Planning Demand Translation Platform

Market Sensing

Key Technology Points

Processes Enabled

Enabling Technology

Supply and Demand Collaboration

Variability Management
End to End Planning

SCM: Distribution & Supply Network Collaboration

Business Analytics: Supplier InfoNet

 Where are you on your journey?

Buy technology with the Goal in mind

S&OP process definition is changing.

Are your technologies aligned to support the change?

To meet Todays needs, we need to change

Supply Chain Paradigms.

Are You Up to the

Challenge??
http://www.presscluboftibet.org/UserFiles/Mount_Everest.jpg