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In my recent Mea Culpa post, I mentioned my prior work on Sales and Operations Planning (S&OP), and the importance of leadership. Leadership and S&OP? How aligned do you believe your organization is to drive these metrics? My observation was that Mondelez’s processes were worse than Kraft’s.
The journey for S&OP is a road with many ruts and potholes. In my twenty years of following the progression of S&OP as an analyst, I am amazed at the number of “experts” with so little expertise. For most companies, building a great S&OP process is a missed opportunity. Drives Value.
I wrote my first report on Sales and Operations Planning (S&OP) while sitting on the floor in the Atlanta airport in 2005 when I was an AMR Research analyst. The model in Figure 1 became the foundational model for the Gartner S&OP model. Sales and Operations Maturity Model from 2005-2008. Figures 2 and 3.
Reason #4 Making key decisions by modelling the supply chain in Excel. Reason #9 Relentless pursuit of one supply chain metric at the expense of other metrics. Yet, these are similar instructions as what is passed down to the supply chain from executives focused on a specific supply chain metric. Sound ridiculous?
” Followed by “How are you organized, and what defines functional excellence? And, how do you tie functional excellence to corporate value?” Companies became less clear on the definition of supply chain excellence and how to implement decision support technologies. Functional Metrics.
Ultimately, what KPIs, as metrics and indicators derived from the set of plans are taken into account and prepared for each scenario. Dashboard with scenario comparison and KPIs for decision making in S&OP. Technology for Effective Planning. Figure 1 shows a dashboard that exemplifies this concept.
Sales and Operations Planning (S&OP) is in a renaissance. With growth slowing and complexity rising, S&OP is more important than ever. It is not sexy, and it requires hard work; but the greatest value of S&OP is profitable growth. S&OP is moving to the cloud. The reason?
While there was always passionate discussions on companies and metrics, the end goal was to raise awareness of supply chain as a practice. They are a supply chain that I very much like, especially from an S&OP practice. Their S&OP is great across these business units. So, drum roll please….
The companies with the strongest year-over-year performance (placing in the winner’s circle for six more times in ten years) are Apple, L’Oreal, Nike, Paccar, TJX, and TSMC. How Do You Define Excellence? In retrospect, I find that technology is an enabler, but only if we are clear on what defines supply chain excellence.
The evolution of S&OP to IBP increased process latency in 70% of companies. The shifts over the last decade are profound: Is the answer a Supply Chain Center of Excellence? So, creating a Supply Chain Center of Excellence might sound like a good idea to start. Lack of aligned metrics. Lack of executive buy-in.
The Center of Excellence at the company wanted to improve base-level capabilities but struggled to move forward due to the traditional views of the planning team, which they felt were self-serving. (The The team was not calibrated on the role of forecasting and the basics around process excellence. Let’s start with the basics.
With the purchase of i2 by JDA, and Logictools by IBM, manufacturing companies serious about network design started looking for a company, with a well-established community, that was more serious about network design. Most companies are still struggling with “what good looks like” and “what defines supply chain excellence.”
Ed argued that instead of buying new packaging equipment that we should work with R&D to have a base flavor and add the color and flavoring at the head of the machine. As a result, we shelved Ed’s idea. Testing Ed’s idea was beyond my circle of control. Strength in S&OP. The So What?
We find that companies with an analytics center of excellence drove progress faster than those with a supply chain center of excellence. While companies build Supply Chain Centers of Excellence, most are not clear on what good looks like. When you ask, “What defines supply chain excellence?” The other issue?
Sales and Operations Planning (S&OP) is a continuous business process that enables firms from hospitals to chemicals to respond to emerging situations intelligently. Our focus today is to discuss the relevance of buzz words such as Analytics, Predictive Analytics, Data Science, and Machine Learning, for S&OP.
While MRP and S&OP were defined as early as the 1980s, these provided rough cut analysis at the aggregate level, nowhere near the level of detail that is possible today. Now they want to deploy an S&OP process. However, excellence in corporate planning matters. Their words.
The focus is on the role of supply chain finance in driving supply chain excellence. Next year’s conference will be on September 8th-11th in Franklin, TN, south of Nashville, TN. The design of the conference includes tours of several modern warehouses and centers of excellence. The Role of the Budget in S&OP.
Q: Is it only inventory disrupting the agility resulting from inaccurate forecasts by S&OP? Is it S&OP? Also, invest time in improving the cross-functional processes of revenue management, Sales and Operations Planning (S&OP) and Supplier Development. Tips on Executing Agility Well.
As a result, focusing on cost and efficiency, and functional metrics throws the supply chain out of balance. Today, only 4% of companies are the first to buy new technology—a 40% decline from post Y2K in 2001. ” Let’s set the stage. Focus on Cost. A Decline in Innovation. Less Collaborative. His response? “Huh?
This morning, the New York Times pushed me an article by Peter S. Let’s face it our historic practices for demand planning create waste in a more variable world. The sad thing is that most companies will never know because they are blindly measuring the wrong metric and driving a supply-centric agenda.
Let’s start with the COVID impact. Semiconductor manufacturing consumes 10% of the island’s water supply. Let’s Start With Demand. Ukraine currently provides nearly 70 percent of the world’s neon gas capacity.) Russia produces 40% of the world’s palladium. ” I laughed.
But research suggests the most widespread and stinging criticism of IBP was that it was just mature Sales & Operations Planning (S&OP) by any other name. These critics sensed a sinister “rebranding” ploy designed to get companies to purchase technology and services they already own but perhaps have not fully implemented.
I have learned that supply chain systems are more complex than I originally thought, and that the relationships between supply chain metrics are nonlinear. I would infuse it into S&OP, risk management, and supplier development. I would build an expertise system in the Supply Chain Center of Excellence.
They can adjust quantities and generate supplier replenishment orders in PDF or Excel as needed. The system can now automatically receive all approved Purchase Orders so receipts can be reconciled against orders. In parallel, the platform is launched with a smaller planning team and without demand planners reviewing forecasts.
As a result, focusing on cost and efficiency, and functional metrics throws the supply chain out of balance. Today, only 4% of companies are the first to buy new technology—a 40% decline from post Y2K in 2001. Lucas had a team that dictated sourcing based on excel spreadsheet analysis to reduce cost and improve tax efficiency.
Nick Lynch is the Global Excellence Manager at Shell Lubricants, a division of Shell Global. Completed in 2012, the ERP project forced the company to standardize organizational design, roles, and metrics. What can often look like compliance in APO could actually be numbers calculated in Excel and posted into the SAP system.
Updated: June 26, 2024 Published: February 4, 2021 What is the Sales & Marketing Leader’s Role in S&OP? The Sales & Marketing leader is a key part of the Roles and Responsibilities of Sales and Operations (S&OP). Sales usually focus their energy on activities that will increase the sales pipeline.
” At least, that’s what was promised. This includes the automation of path-to-purchase for consumer products, active shaping of demand through price, channel incentives and promotions, eCouponing and mobile commerce for retail, and product proliferation for all. My preference is monthly as part of the S&OP process.).
In Figure 1, I show results from a recent S&OP study. S&OP Challenges. Jackie kept a lookout perched on puff’s gigantic tail. As you read the financial analyst’s views of the industry summon your inner dragon: Clearly, the whole space has moved along very rapidly in recent years.
Each year, we do a study–we term it the Voice of Supply Chain User – on user satisfaction with today’s systems. We would love your input on this year’s study. ) Steelwedge, a Software as a Service solution of S&OP, just announced a new round of financing by Camden partners. Cash is king.
Understanding the Operations Leader’s Role in S&OP Sales & Operations Planning (S&OP) requires a multi-functional team that allows each part of an organization to participate in the development of the process plan. The S&OP plan serves as a vital tool to be up-to-date with product changes.
In the last 30 years S&OP improved performance in many businesses. However, S&OP has not yet substantially delivered on its ultimate promise of enterprise wide resource management, rolling financial forecasting and strategy deployment. Worse, overall S&OP development and progress seems to have stalled.
” Steve’s response was fascinating and enlightening. I related to Steve’s story of death by a thousand cuts. 21 versus P&G’s.19 P&G’s rate of improvement on the Metrics That Matter was lower than the peer group. Let’s take the case of Cisco Systems.
Buying these solutions is far more complicated than is represented in a simple four-box quadrant. I struggle to find both in today’s market. IT’s definition focused on the movement of data with a defined context through an API, while the business leader wants a solution that can represent the end-to-end supply chain.
Executive, after executive, lament, “They have purchased many technologies and sponsored many projects to reduce inventories, but they are not seeing results.” We are systemically evaluating each industry in the Supply Chain Insights Metrics That Matter series of reports. These efforts are not enough. These are my thoughts.
Has your company ever suffered problems with, implemented, or even considered implementing a sales and operations (S&OP) planning process? But what makes it so challenging to implement S&OP successfully? Why S&OP Needs a Lot of Human Investment. Who’s Who in the S&OP Process?
Therefore, evaluating performance and creating a comprehensive digitalization strategy are essential for a distributor’s success. This involves understanding customer buying behaviour trends, seasonal variations, production schedules, and more. Logistics KPI Dashboard Excel Template 4.
Analysts at Gartner predict circular economies will replace today’s wasteful linear economies over the next decade or so. There are a number of excellent reasons circular economies are desirable, including less waste and better use of limited resources. The world’s waste problem. 4] Smart Cities World , op.
In today’s fast-paced business landscape, having an efficient supply chain department is more important than ever. Here’s why a structured approach is important: Efficiency A structured department creates a clear division of labor and defines processes for procurement, production, distribution, and returns.
At the event, James Rice, MIT, spoke on innovation, and his reflections on Clayton Christensen’s 1997 classic business book, the Innovators Dilemma. Christensen’s concept is that businesses will reject innovation based on the fact that the customer cannot currently use the innovation delaying the adoption of great ideas.
It matters not what your metric is, you get the same results: too much of our trade spend goes down the drain, doesn’t it? Demand signals include shopping trends, digital footprints of shopping online or looking at recipes, talking to their neighbors and friends on social media, buying habits, and consumption data. 3 Deductions.
Today hurricane Nate’s north winds are pushing against the bayous of Louisiana. Today’s demand processes are inside-out. In today’s architectures, there is no place to put outside-in data like VMI, Point of Sale (POS) or rating/review data. Today’s demand management processes have many issues.
Over the period of 2009-2015, only 88% of companies made improvement on the Supply Chain Metrics That Matter. To meet the criteria for The Supply Chains to Admire for 2016, companies needed to score better than their peer group average for performance metrics, while driving a higher level of improvement than 2/3 of their industry peer group.
What is much easier to measure is cost — so that’s what drives the metrics and incentives.”[1] Gilmore cites a passage from a book entitled The Supply Chain Revolution written by Suman Sarkar, CEO of Three S Consulting. Horizontal (versus Vertical) Process Excellence. ” Let’s face it.
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