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Welcome!

S&OP: How to make it WorkJanuary 22, 2008 10AM Pacific, 1PM Eastern

Today’s Speakers:Mr. Tom Wallace, Author and Educator Chris Givens, VP Business Development Steelwedge Software

Tom Wallace & Bob Stahl www.tfwallace.com

Sales & Operations Planning:How to Make It Work

Sales & Operations Planning:How to Make It Work

A Webcast for Steelwedgeby

Tom Wallace

January 22, 2008


OverviewOverview

What It Isand

Where It Fits


The Four FundamentalsThe Four Fundamentals

Demand Supply

Volume

Mix

•How Much?•Rates•The Big Picture•Families•Strategy/Policy/Risk•Monthly/out to 36 Mos

•Which Ones?•Timing/Sequence•The Details•Products•Tactics/Execution•Weekly/Daily 1-3 Mos


Sales & Operations PlanningSales & Operations Planning

Demand Supply

Volume

Mix

Executive S&OP

Master SchedulingSupplier and Plant Scheduling

Distribution Scheduling

Demand Planning/Forecasting

Supply (Capacity) Planning

bodell

I think the key thing to hit is "what is Executive S&OP"? Should we have some bullet points somewhere that give some basic description? And can we link this back to some key points:?1) This is about Executive" Decision Making"2) This is about" Business Performance" (not just demand/supply balancing)3) This is not "detailed execution review"


More Terminology Changes?More Terminology Changes?

Sales & Operations Planning maybecome the successor term to

ERP/MRPII

Thus the term Executive S&OP was developed – to set it apart.


Where Executive S&OP Fits

Where Executive S&OP Fits

Strategic PlanningStrategic Planning

Detailed Planning, Scheduling &

Execution

Detailed Planning, Scheduling &

Execution

Business PlanningBusiness Planning

Disconnect!!!Disconnect!!!Executive S&OPExecutive S&OP


The Leader of the Business Unit (General Manager, President, COO) Must be Hands-On with Executive S&OP:

1. Stewardship2. Leadership

• Break ties• Set high standards• Motivate

Monthly Time Commitment: 1.5

The Role of Top ManagementThe Role of Top Management

hours


What if the Leader is not Involved?

What if the Leader is not Involved?

Attendance

Quality

Intensity

Results

Life Expectancy

Sustainability


How to Make It WorkHow to Make It Work

The Implementation

Methodology


Implementation: The Real IssueImplementation: The Real Issue

Understanding S&OP is simple.

The hard part is . . .

Behavior Change changing the way we do our jobs.

“The hard stuff is the soft stuff.”


The ABC’s of ImplementationThe ABC’s of

Implementation

• C = Computer

• B = Data

• A = People


Implementing Executive S&OP Is Different


Active, Hands-on Participation by theLeader and Staff

The leader of the business (president,

COO, CEO, general manager) must provide:• Support• Funding• Commitment• Leadership

So what’s new?

Each and Every Month




• Highly focused on Top Management

• Relatively few people

• Low cost/high impact


Implementation PrinciplesImplementation Principles

• Implementation begins and ends with the Leader of the business

• “Hold the high ground” and success will almost always follow

• “Build it and they will come” carries a low probability for success


Implementation AlternativesImplementation Alternatives

“Build it and they will come” – design it first, get the mechanics working, and then attempt to sell it to top management

=Low probability for success

“Hold the high ground” – involve top management at the very outset of the implementation, and throughout

=High probability for success


Implementation PathImplementation Path

1 2 3 4 5 6 7 8 9Months

Bu

sin

ess

Imp

rovem

en

t

Phase IPhase IPreparation

Phase IIPhase IIExpansion

Live PilotGo/No-Go #2

Phase IIIPhase III$$$

Integration

ExecutiveBriefing

Go/No-Go #1

KickoffSession

Low Risk & Low Cost

Month 1•Assignment of Responsibility

•Kickoff Education & Planning

•Development of Project Schedule

•Families & Sub-Families (Pilot Family)

•Data Definitions, Sources & Displays

Month 1•Assignment of Responsibility

•Kickoff Education & Planning

•Development of Project Schedule

•Families & Sub-Families (Pilot Family)

•Data Definitions, Sources & Displays

Month 3•Pilot Demo Preparation

& Execution

Go/No-Go Decision #2

Month 3•Pilot Demo Preparation

& Execution

Go/No-Go Decision #2

Month 2•Demand Planning Processes & Data Feeds

•Supply Planning Processes & Data Feeds

Month 2•Demand Planning Processes & Data Feeds

•Supply Planning Processes & Data FeedsExecutive Briefing& Go/No-Go Decision #1

Executive Briefing& Go/No-Go Decision #1

Phase IPhase IPreparation

Phase IIPhase IIExpansion

Phase IIIPhase III$$$

Integration

Months 4 – 6 • Add All Product Families• Full Supply Planning• Limited Financials

Months 4 – 6 • Add All Product Families• Full Supply Planning• Limited Financials

Months 7-9• Full Financial Integration•Institutionalize the Process

Months 7-9• Full Financial Integration•Institutionalize the Process


Three Levels of CommitmentThree Levels of Commitment

• Uninformed (before Go/No-go #1)

Boss: “Okay, let’s do an Executive Briefing.”

• Semi-informed (after Briefing: Go/No-go #1)

Boss: “Okay, let’s do a Live Pilot”

• Fully informed (after Pilot: Go/No-go #2)

Boss: “Okay, let’s go to full cutover.”


Implementation RolesImplementation Roles

Roles:

• Executive Champion• Design Team (Core Team, Project

Team)

• Design Team Leader

• S&OP Expert


Success RequiresSuccess RequiresDesign Team’s Job:

• Defined set of practices (What, How, & Who)

• Accurate, timely, & believed data

Leadership’s Job:

• High discipline, Clear accountability

• Constant improvement

• Changed performance measures

• Behavior change


The Future of S&OP: Growth Factors

The Future of S&OP: Growth Factors

• Success breeds success• Lean Manufacturing and S&OP• Globalization• New users outside traditional manufacturing• S&OP specific software• Greater financial integration and simulation• A growing presence in the executive suite


Thanks for ListeningThanks for Listening

Go to www.tfwallace.com for:

• Copy of today’s slides

• Periodic newsletter

• White papers

• Books and videos

http://www.tfwallace.com/

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Thank you!

Q&A

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