Integrated Business Planning · 2017. 11. 30. · Order cycle Material movement Strategic Network...

Integrated Business PlanningLinking Demantra S&OP and Hyperion Financial Planning

Agenda

Business Challenges & OpportunitiesSupply Chain Operations Planning / S&OPHow S&OP Link to FinanceProcess Flow

Customers

Suppliers

Finance

Supply Chain

Sales

Marketing

R&D

Partners

Supply Chain Planning Demand Planning

Sales & Operations Planning

Financial Planning & Goals

Strategic Planning

Collaborative Planning Design Collaboration

Sales ForecastsMarket Requirements

Business Plans Sales Forecasts

New Product Launch Product Life Cycle Plans

Product Forecasts Promotion Plans

Forecast Collaboration Product Requirements

Operating Plan

Excess & Obsolete Inventory Exposure

Profit Planning Working Capital

Planning

Planning Across the CorporationMany critical planning processes, too many spreadsheets

Key Account Planning

Revenue Planning

SKU Rationalization

New Products Planning

Product Allocation

Finance and Operations Not Aligned Disconnect between the financial and operating plans is critical obstacle

• Financial Planning– Financial plans do not reflect operational realities– Revenue forecast is unreliable as it not adjusted reflect

operating forecast– Strategic financial plans lack bottom up validation – Financial planning uses discrete periods and looks

backwards

Sales and Operations Planning – Operating plan not directly aligned to financial targets– Impact of demand and supply changes not visible to

finance– Operating plan has little top-down validation and

decisions made without considering financial impact– Operating plan is continuous and forward looking

Gartner’s View on Addressing These Challenges

Key Findings:S&OP processes are focused on operations (demand and supply balancing) but devoid of strategic and financial planning Integrated Business Planning (IBP) is the strategic modeling and reconciliation process that closes the gap between strategy and operations Corporate Performance Management (CPM) should provide the key performance framework for IBP and S&OP

Need For Integrated Business Planning

(2007)

(2007)

“Integrated business planning…fills the gap between the strategic and financial planning handled by corporate performance management suites and operational planning focused on the supply chain. S&OP has failed to bridge this gap and has remained rooted at the operational level.”

“What for decades has been a financial budget exercise to manage expenses has morphed to a continuous, integrated business planning process that aligns the entire business toward operational and financial excellence.”

http://www.amrresearch.com/default.asp

Agenda


Design Procure Make Deliver Sell

When? Where?Schedule, monitor, control and adjust production

Work center schedulingSupplier schedulingCustomer order promising / tracking

Ope

rati

onal

How much?Deploy resources to match supply to demand

Collaborative demand forecastProcurement, production, logistics planStakeholder inventory targetsT

acti

cal

What?Establish objectives, policiesand operating footprint

ObjectivesSupply policies (service levels)Network designS

trat

egic

DoBuy, build, store and transport

Order cycleMaterial movement

Exe

cuti

on

Supply Chain ManagementS

uppl

iers

Cus

tom

ers


Ope

rati

onal

Tac

tica

lS

trat

egic

Exe

cuti

on

Sup

plie

rs

Cus

tom

ers

ProductLife Cycle

Management

StrategicSourcing

CapitalAsset

Planning

Working Capital

Planning

DemandPlanning

Ramp &Obsolescence

Planning

MaterialPlanning

Master Planning

DeploymentPlanning

ConsensusForecasting

ECOScheduling

MaterialReplenishment

ProductionScheduling

TransportationPlanning

Order Promising

ECOCut-In

ProcurementManagement

Inventory& Shop FloorManagement

Warehouse &TransportationManagement

OrderManagement

Supply Chain Management


Sup

plie

rs

Cus

tom

ersDeploy resources to match Deploy resources to match

supply to demandsupply to demand

ObjectivesObjectivesSupply policies (service levels)Supply policies (service levels)Network designNetwork design

Collaborative demand forecastCollaborative demand forecastProcurement, production, logistics planProcurement, production, logistics planStakeholder inventory targetsStakeholder inventory targets

Work center schedulingWork center schedulingSupplier schedulingSupplier schedulingCustomer order promising / trackingCustomer order promising / tracking

Order cycleOrder cycleMaterial movementMaterial movement

Strategic Network OptimizationStrategic Network Optimization

Advanced Supply Chain Planning/PDPAdvanced Supply Chain Planning/PDP

Production SchedulingProduction Scheduling

Product Product Data Data

Mgmt. Mgmt.

Buy, build, store and Buy, build, store and transporttransport

Procurement Procurement Management Management

Inventory MgmtInventory Mgmt

Shop Floor MgmtShop Floor Mgmt

Trans. Trans. MgmtMgmt

Sales & Ops PlanningSales & Ops Planning

Business IntelligenceBusiness Intelligence

Sales Order Sales Order ManagementManagement

Demand Demand ManagementManagement

Trade Promotions Trade Promotions PlanningPlanning

ForecastingForecasting

ATP ATP

WarehouseWarehouseManagementManagement

Sup

plie

rs

Cus

tom

ers

Supply Chain Management

Agenda


How can Hyperion and Demantra address this?

Focus is on M&D industries where a comprehensive demand forecast, combined with S&OP, is a requirement

– Demantra Demand Management provides flexible statistical forecasting models to sense and decompose demand elements and to create a Consensus Demand Forecast

– Demantra Real-Time Sales and Operations Planning provides collaborative environment that spans LOB’s

Demantra provides the ability to link dollarized finance/sales plan from EPM with a unit-based SCM/manufacturing plan that is actionable

– Bottom-up planning and simulation to validate against top down financial performance targets, and to provide adjustments

Hyperion-Demantra integration helps to operationalizeIntegrated Business Planning for M&D industriesExpand Hyperion IBP to Oracle IBP

Integrating the Business Planning ProcessMany planning processes must be aligned

Long-termfinancial plan

Long-termfinancial planCorporate

Finance

Financial Planning and Accounting

Sales & Marketing

SupplyChain

RevisedLT financial plan

RevisedLT financial plan

Initialannual budget

Initialannual budget

Baseline LT sales forecastBaseline LT

sales forecast

Create consensus

demand plan

Create consensus

demand plan

Supply chain costs and

constraints

Supply chain costs and

constraints

Constrained operation planConstrained

operation plan

Operationally feasible

annual budget

Operationally feasible

annual budget

LT demand &supply

(capacity) plan

LT demand &supply

(capacity) plan

Sales and marketing plan

Sales and marketing plan

Rev shortfall Monitor & re-

plan

Rev shortfall Monitor & re-

plan

Shape demand to fill

shortfall

Shape demand to fill

shortfall

Legacy Oracle SAP Infor

ERP Systems

Oracle Integrated Business PlanningCreate Broader Solution Set for a Company’s Executive Leadership

Financial Planning and Budgeting Financial Planning and Budgeting

Sales and Operations Planning

Sales and Operations Planning

Demand Planning Demand Planning

Supply Planning Supply

Planning

Consensus Demand

Management

Consensus Demand

Management

Enterprise Performance Management Enterprise Performance Management

CRM / SFA CRM / SFA PLM PLM

Integrated Business Planning

Finance

Supply Chain

Sales

Marketing

R&D

• Create long-term plan• Manage cashflow and value

creation• Analyze M&A, divestitures

and strategic alliances• Evaluate financing options• Optimize capital structure

• Identify cost and profit drivers• Allocate costs and revenues

to departments, activities and products

• Calculate and analyze product and customer profitability

• Perform root cause analysis

• Manage annual budgeting• Manage periodic forecasting• Plan workforce and capital

assets• Leverage what-if scenario

planning• Analyze COGS and margin

• Balance demand and supply• Deliver consensus planning

across sales and operations• Maintain plan in near real-

time to respond to variability• Monitor operations

performance

• Analyze what-if S&OP scenarios

• Optimize supply chain network based on flexible objective functions

• Simulate contingency and scenario planning

• Sense demand based on near real-time sales capture

• Manage statistical forecasting and demand modeling

• Plan demand across multiple dimensions

• Collaborate on consensus demand forecast

• Plan supply based on constraints

• Manage production and distribution planning

• Determine safety stock levels and order policies

Strategic Financial Planning

Profitability and Cost Management

Budgeting and Forecasting


Rapid Planning

Demand Management

Supply Chain Planning

Annual PlanBudget

Financial Forecast

Consensus PlanSales Volume

Operating Volume

Oracle Integrated Business PlanningDetailed Functional Elements

Customer Relationship Management

Customer Relationship Management

Siebel

Demand Planning

Demand Planning

JDA

Supply & Capacity Planning


SAP APO

Revenue & Profittargets

Standard costs, ASP

Promotions

& Lift

Demand Plan

& Product mix

Capacity models

& constraints

Operational metrics

& variances

Financial metrics

& variances

Consensus

Demand plan

SAP ERPSAP ERP

Conceptual Deployment Aligns planning across multiple systems


Global Demand

Management

Global Demand

Management

Executive Review

Executive Review

Hyperion Planning Hyperion Planning

Demand and Supply

Balancing

Demand and Supply

Balancing Event-Based Planning and

Simulation

Event-Based Planning and

Simulation

Familiar User Experience, Better DataPurpose built UIs enable easy adoption of more comprehensive planning

Annual Plan, $

Financial Forecast, $

Budget, $

Consensus Plan, $, Units

COGS, $

Hyperion Planning budgets used as financial performance targets in Demantra S&OPIncorporate consensus forecasts from Oracle S&OP to improve financial planning, budgeting and forecasting in Hyperion PlanningFinancial analysts work in UI built for financial analysisDemand and supply planners work in UI designed for sales and operations planning Data is moved as required between planning environments

Link Financial Planning with S&OPEPM-Demantra AIA Integration

Annual Plan, $

Financial Forecast, $

Budget, $

Consensus Plan, $, Units

COGS, $

FcstSell Price

Conversion from Financial Plan ($) to Operational Plan (Qty)

SKUA@Dist Ctr

SKUB@Dist Ctr

SKUC@Dist Ctr

SKUD@Dist Ctr

Prd Grp@Sales Office Prd Grp@Sales Office

LoB@Region LoB@Region

LoB@HQ

Prd Grp@Sales Office Prd Grp@Sales Office

LoB@Region LoB@Region

LoB@HQ$10mil

$… $…

$8mil $2mil

3mil units 3mil units 1mil units 1mil units$1 $1 $1 $1

$6mil $2mil

$3mil $3mil $1mil $1mil

$8mil $2mil

$4mil $4mil $1 mil $1 mil

①

②③

4mil units

① Demantra - Aggregate [Unit forecast x Sell Price] from bottom up② Where both hierarchies meet at Product Group-by-Sales Office, transfer Financial Plan from Hyperion to Demantra③ Dis-aggregate the financial numbers down the hierarchy, based on proportions of results in ①④ Convery $ value to Qty

4mil units 1mil units 1mil units

④

Demantra

Hyperion

Consensus Demand Planning

Consensus Demand Planning

Financial AlignmentFinancial AlignmentDemand –

Supply Alignment

Demand –Supply

Alignment

Trade Promotions

Mgmt.

Trade Promotions

Mgmt.Demand Planning

Demand Planning Supply &

Capacity Planning




Financial Planning

Financial Planning

Market Intelligence

Oracle Oracle Oracle

Siebel Manu SAP APO Manu Hyperion

Promotions & Lift

Stats forecasts & Product mix

Capacity models & constraints

Revenue & Profittargets

Std. costs, ASPOther assumptions

& targets

Sara Lee Aligns Sales, Marketing and Finance

Executive Review

Executive Review

Oracle

Operational metrics & variances

Financial metrics & variances

ConsensusDemand plan

Demand &Supply plans

• Linked models across Sales, Marketing, Manufacturing Operations and Finance

• Fact-based operational decisions aligned with financial plans

Sales & Mktg.

SAP ERPSAP ERP

Integrated Solution Flow

Showcase Oracle’s best of breed products- Hyperion and DemantraIllustrate an integrated flow to align the company around a single plan aimed at profitably meeting revenue targets1. The revenue and profitability targets are established in the top-down long-range

planning process in Hyperion

2. The targets are cascaded down and annual financial plans are created to achieve targets in Hyperion. The annual plan is fed to Demantra.

3. The baseline forecast is generated statistically using Demantra’s bottom-up demand management capability and compared to annual plan to identify the gaps between the revenue predicted by the bottom-up forecast and top-down financial plan. Demantra’s promotion planning capability is used to close these revenue gaps and translate the business plan collaboratively into a demand plan to provide supply chain planning a forecast to develop a supply plan

4. Demantra’s Sales and Operations Planning is used to balance supply and demand. Resulting “likely” revenue, units, and COGS are fed back to Hyperion

5. Revenue targets on an ongoing basis to be monitored in Hyperion

Purpose

Hyperion – Demantra IntegrationOne-screen navigation

Hyperion – Demantra IntegrationCFO Dashboard – Q1 2008 review: sales less than expected

Hyperion – Demantra IntegrationRe-plan remaining three quarters to meet annual financial objectives

Hyperion – Demantra IntegrationAllocate annual target to remaining three quarters- Q2, Q3, Q4

Hyperion – Demantra IntegrationPublish to Demantra S&OP for reality check and demand shaping

Hyperion – Demantra IntegrationRole and access based collaboration workbench

Hyperion – Demantra IntegrationArrive at consensus forecast for remaining three quarters

Hyperion – Demantra IntegrationAdjust or create promotions to optimally increase demand

Hyperion – Demantra IntegrationPublish to evaluate impact on supply chain - costs and constraints

Hyperion – Demantra IntegrationDemand-supply balancing – identify constraints and optimum solution

Hyperion – Demantra IntegrationRough-cut capacity planning – where and how much to add

Hyperion – Demantra IntegrationPublish realistic and consensus revenue, COGS, and expenses

Sales & Operations Planning Integration to Financial Planning

– Improve confidence in revenue forecast – Close the gap between budget and reality– Respond faster to market changes– Improve planning efficiency– Shape demand and supply to achieve

business targets– Deliver superior returns compared to

competitors

Bring financial plan from Hyperion Planning in to sales and operations planning processSynchronize top-down, dollarized financial plan to unit-based, bottom-up operations planFeed realistic and consensus operations plan to financial planning process for better budgetingClosed-loop performance management to enable timely action to meet financial goals

Business Benefits

Key Features

– Pre-built and extensible• 20% less implementation time

– Supported by Oracle

IT Benefits

Q U E S T I O N SA N S W E R S

Integrated Business Planning · 2017. 11. 30. · Order cycle Material movement Strategic Network...

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