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

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Agenda • Challenges with Sales & Operations Planning Oracle Demantra overview <Insert Picture Here> • • Using Oracle Demantra .

producing tea. biscuits. Consensus demand and supply plans Company • One of South Africa’s leading CPG companies. coffee.National Brands Ltd. 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 • • • • Improved forecast accuracy by 13% Cut finished goods stock levels by 20% Improved service levels from 94% to 96% More effective production planning .

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 350 300 250 200 150 100 50 0 Strong Weak Improved Demand Management is the first important step ! Perfect Order Cash-to-Cash Inventory SCM Costs Source: AMR Benchmark Analytix .

limited collaboration.Traditional Approach – Disconnected High latency. non-integrated systems ? Low forecast accuracy Departmental orientation to demand forecasting Misalignment between metrics and objectives Not tied to Sales and Operations Planning process . no consensus forecasting Your Company Financial Planning Production Planning New Product Planning Sales Quotas Marketing Forecasting Measurement and Reporting Manual processes Multiple data sources Multiple.

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. 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) . store. channel.

same tool for each step in the process Adapted from Top 10 Success Factors for Sales and Operations Planning by Oliver Wight .Tools 1.Top 10 Success Factors for S&OP 3 Critical Success Factors -. Use graphical presentation 2. Ensure an “integrated” tool is used -. Make it easy to grasp what has changed and any issues 3.

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 .Sense Demand Real-Time Involve all constituents and forecast closer to the point of consumption • Sense demand real-time. 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. at more granular level. such as external syndicated and POS data. 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. product.

Markov chain regression Intermittent regression Seasonality.Improve Forecast Accuracy Designed for planners. market indicators Base + price + multi-event lift decomposition • Promotion effects • • Cross-product and cross-location effects Pre and post event • Unlimited causal factors • • • • • • • • Automatic outlier detection Trend long. dampening Missing data interpolation Shape modeling and auto-correction Regime change Fit and forecast validation . not programmers (“PhD in a box”) Bayesian Estimator Historical data Superior Bayesian-Markov Analytics Multiple causal factors Bayesian combined model Forecast Estimator’s models • • Bayesian mix modeling 15 model library • • • • • Auto-regressive moving average (ARMA) Regression integrated winters Logistic and logarithmic models Ridge regression. short. weather.

and post-effects • How does a marketing program at a brand or Competitive switching Category growth product family level impact a specific item? Baseline Actual • 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? 6 Period 11 Cases .Shape Demand for Profitability Leverage Advanced Forecasting and Modeling to understand the real impact of promotions and sales incentives 4000 3500 3000 2500 Past Future 2000 1500 1000 500 0 Period 1 Period 6 Period 11 Cannibalization Pre.and post-effects Competitive switching Category growth Baseline Actual • What incremental volume will result from a marketing program? Cannibalization • How will it impact the sales of other products? Pre.

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 • • • • 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 .

supply. and new product plans Performance issues 3. Roles and responsibilities are defined and communicated 2. Manage by exception – and focus on the key issues • • • • Gap closure (volume. and profit expectations) Resource issues Alignment of demand.Process 1. Implement quickly and improve each month Adapted from Top 10 Success Factors for Sales and Operations Planning by Oliver Wight . revenue.Top 10 Success Factors for S&OP 3 Critical Success Factors -.

Top 10 Success Factors for S&OP 3 Critical Success Factors -. Senior executives utilize S&OP as their process for managing the business 3.Leadership 1. Senior executives insist on the truth Adapted from Top 10 Success Factors for Sales and Operations Planning by Oliver Wight . Senior executives do not delegate their participation in the S&OP process 2.

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

Operations. Marketing.Evolve to Real-Time S&OP Each S&OP participant has a configurable rolebased view Inputs display from entire collaboration group – Finance. Key Customers and Suppliers Integrated approval workflow process Review historical accuracy for each input .

Interactive Management Review Typical S&OP Management Review agenda Sales and Operations Planning Process Demand Review Product Review Management Review Shape Respond Sense • 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? Adapted from “Enterprise Sales and Operations Planning” by Palmatier & Crum Execute and Measure Supply Review .

VTech Live on Demand Management. Best Buy. operating worldwide • Leading provider of cordless phones and electronic children’s toys • 85% of US revenues through Wal-Mart. 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 • • • • Increased order fill rate from 55% to 95% Increased inventory turns by 100% Reduced price protection claims by 40% Reduced logistics costs by 65% . Real-Time S&OP Company • $1 billion in revenues. Target.

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

Oracle Closed Loop S&OP Planning Demand Planning Demand Data Supply Planning • Constraint-Based Consensus Forecast Production Scheduling • Strategic Network Optimization S&OP Meeting Market Demand Forecasting EDI 867 IMS data Excel Pedigree xml New Product Forecasting S&OP Review Evaluate Supply Constraints Promotion Planning S&OP Outputs: Inventory Optimization Safety Stock Demand Service levels Profitability Inventory Levels Promotions DRP MPS Measure Financial and Customer Service Level Results Execute .

and Replenish Preconfigured Worksheets and Workbenches Execute to plan Products Strategic Inventory Network Optimization Optimization Real-Time Sales & Operations Planning Demand Predictive Management Trade & Advanced Planning & Forecasting Optimization Advanced Supply Chain Planning Production Scheduling Global Order Promising Collaborative Planning Platform WFL Connectors Common planning data model Embedded Analytics Future * E1 * EBS … * Legacy ERP Demantra . Distribute.Oracle Demantra Overview Complete. best-in-class and integrated planning process platform Trading Partners Best in class Business Processes Supply Chain Demand driven Risk Management adaptive planning Real-Time S&OP Operational Excellence Multi-Enterprise Collaboration Role-based Portals Network Design Integrated Planning Functions Demand Sensing And Shaping Postponement Optimization Holistic Supply Planning Promise.

48 half-hour buckets per day for 90 historical days and 90 future days .State-of-the-art and Scalable Architecture • Scalable s ines Bus ogic L • w& s kflo Wor ception Ex Handle millions of combination P OL A Bu s ine ss Ap p lic e ictiv Pred eling Mod • Web-based user interface personalization GUI ati on La ng ua ge / atio ser Serv • U ministr bject O d s A es • usin • B tack gy S P(S) o l o T hn L / HT Tec ise ML / HTM r p r /X r Ente AP e • SO E Serv E 2 J S • DBM • R D ry sito epo R a t d Da ces ma n e ervi D S d n e i io Unif grat Inte a t a D e s ctur e struty Servic ation a r f r i n r I u u g i a c ntr ole Se & Conf es R ic ema n imiz O pt o n i at • • 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 Wendy's has ~1M combinations.over 9B data points . 730 history daily buckets.

Proven Success – Many Live Customers .

alerts. alerts. and seeded worksheets Tailor worksheets for individual users Manage rolling forecasts Collaborate with all constituents on one number Use basic statistics. and seeded worksheets Tailor worksheets for individual users From less complex to best in class . alerts.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. and seeded worksheets Tailor worksheets for individual users Eliminate spreadsheets Manage rolling forecasts Collaborate with all constituents on one number Use basic statistics.

<Insert Picture Here> Summary .

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 Customer sales Shipments • Shape demand for profitability • • • Plan new product introductions Plan promotions and sales incentives Identify cross selling opportunities Demand Hub and Seeded Worksheets • Evolve to real-time S&OP • Profitably balance supply. closer to the point of consumption Capture demand and forecast at more granular level (store. attributes. including customers Quickly identify and react to demand changes and exceptions Collaboration Workbench Marketing forecast Order history • 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. shelf.Oracle Demantra Demand Management Real-time demand sensing and collaborative consensus forecasting • Sense demand real-time CHANNEL DATA • • • • Sense demand more frequently. and budgets . product characteristics) Achieve consensus demand number more quickly by involving all constituents at the same time. demand.

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