KEYNOTES

How to select S&OP and other supply chain software

Sales & operations planning (S&OP) software is still high on the wish list of supply chain professionals, but the selection process for that software has changed. All software vendors now deliver the same basic functionality needed to support the S&OP process. You can compare it to buying a car. An Audi A6 is a classic, reliable car with a great track record and a design based on proven technology. Anyone who chooses it is making a safe choice.

Don’t get bogged down in lists of selection criteria or car options, but to take a quick test drive by asking software vendors to give a live demonstration. Another issue is whether one car (software package) is enough for your entire supply chain planning processes. Perhaps you need a complete fleet comprising a large diesel truck, a small electric truck and a forklift. The question is whether you should order the entire fleet from the same supplier or select the best supplier for each type of vehicle.

There are various types of software on the market, including for S&OP. Every company needs the basics: the systems of record which support transactions and register orders in a ERP system. The layer above that consists of the systems of differentiation, which companies use to set themselves apart, e.g. in terms of planning and forecasting. The top layer consists of the systems of innovation: applications that make use of machine learning and cognitive automation, for example, or the apps that companies can simply plug in.

This layering of applications translates to the set-up of a T-shaped planning tower in recent years. Sales orders enter the enterprise resource planning (ERP) solution on the first floor, Sales & Operations Execution (S&OE) on the second floor, S&OP in the next floor, Integrated Business Planning (IBP) on the fourth floor and at the top of the planning tower the end-to-end planning across the complete value chain.

Powered Supply Chains

Click & Collect, Click & Deliver, Return & Drop, Dark-shops-delivery are just a few of the new routes-to-markets in a B2B2C environment and for Supply chain leaders to deal with.
This puts a lot of pressure on the forecast-ability and quality of demand, as well as the end-to-end supply chain responsiveness. IBP is meant to be the process in the middle to Decide & Commit based on (financial) scenarios, maximising value and margin. All aligned with all business stakeholders to drive the execution of the strategy.
Today, the latest and greatest technology providers are offering the most sophisticated systems to accommodate a near-real time S&OP or IBP-process if you wish.

Very nice theory, ambitions and technologies. Not so easy to realise.
The reality is that many companies experiment to build new processes and new systems on top of their (quite often malfunctioning) legacy foundations and broken (Planning / S&OP) processes.
Such investments in new technology are very often turned into programmes to first restore the foundations (and data!), before the benefits of a successful business transformation can be grasped.

Most successful companies take the time to re-think their future Operating Model before they spec. & select the right and more sophisticated software, to drive their IBP.
Based on many learnings and good-practice operating models, companies need an approach to accelerate their journey of Tech-enabled-business-transformation, and to maximise the benefits of a ‘Powered Supply Chain’.

In my keynote I will highlight the Why, What and How of IBP-transformation, as well as the challenges to overcome as a Supply Chain leader.

The IBP journey of Henkel Laundry & Home Care

Ariane Longpré (Director Planning/IBP Program Lean – International Supply Operations) will share the IBP journey of Henkel Loundry & Home Care, and how they are getting ready in taking this step as an organization. Henkel is now at the crucial stage of creating awareness and urgency for the topic, in order to get the organization on board. What did she achieve so far?

• The S&OP journey so far – The assessment: achievements and challenges
• How does Henkel think about IBP; cross-functional work, lever for growth, holistic P&L steering
• Their vision of IBP: process, people (change management) and technology
• Their approach: how do we prepare the ground and organization

The hurdles in the journey to IBP

Introducing IBP is hard – and many companies fail along the way. Where traditional S&OP (Sales & Operations planning) is primarily focused on matching demand & supply – the ambition of IBP is “next level”  expecting  fully aligned product, demand, supply plans financialized with scenario thinking, gap closing on the 24-36 months horizon.  Driving up the IBP maturity levels results in better demand sensing, more agile supply and faster innovation. So enough reasons to expect all stakeholders to be fully engaged ?

The truth is that  getting the IBP mindset  in the company goes over many hurdles. Getting all people on board requires a “change management” approach with high buy-in from leaders up to  Executive Committee. Setting principles on the rituals, expected behaviors is key. Getting  the short term issues handled in a “Sales & Operations Execution” weekly ritual ensures IBP monthly cycle focuses on mid & long term. IBP has to be supported with proper technology capturing our plans, performance indicators to allow the learning from the past in a fast way.

A realistic roadmap, regular review & assessments are absolutely needed. Gemba-walks are a nice way to create within the company a learning culture – nothing better than a peer from another business unit attending an IBP step and provide constructive feedback and coaching.

AkzoNobel had several attempts on a IBP introductions over the last decade and faced every time the rituals weakened and faded to a level of S&OP or completely disappeared. The introduction of IBP on a global basis in 2017 has finally lead to success – achieving a high performance IBP culture fully embedded. IBP is the showroom : attending an IBP meeting – DMR, SMR, PMR, MBR should give an immediate picture on current state, opportunities & vulnerabilities, gaps to the ambition level the company has set. But every cycle is a learning – IBP is about re-inventing ourselves and taking the hurdles – to come to a next level in performance !

Why is Excellence in S&OP so hard?

In this presentation, Lora Cecere, Founder of Supply Chain Insights, shares seven reasons why most S&OP programs fail and how to improve outcomes. As an analyst in the supply chain management space for over two decades, Lora has coached over 600 companies on how to drive success.

Most Struggle. The most significant hurdle is not technology. Instead, it is an organizational design challenge that starts with leadership. Based on research and recent experience, the seven reasons and recommendations are designed to help companies maximize success.

Lora Cecere is the Founder of Supply Chain Insights. She works with supply chain leaders to take teams to higher levels of excellence.

Her research firm Supply Chain Insights is paving new directions in building thought-leading supply chain research. Lora loves to write and research is in her veins. She is the author of the enterprise software blog “Supply Chain Shaman." The blog focuses on the use of enterprise applications to drive supply chain excellence. Her co-authored book, Bricks Matter published in December, 2012 and her new book, Metrics that Matter publishes in December 2014. Lora writes monthly columns for Consumer Goods Technology and CSCMP Quarterly and actively blogs on LinkedIn as an Influencer and on Supply Chain Leadership on Forbes.

As an enterprise strategist, Lora focuses on the changing face of enterprise technologies. Her research is designed for the early adopter seeking first mover advantage. Current research topics include the digital consumer, supply chain sensing, demand shaping and revenue management, market-driven value networks, accelerating innovation through open design networks, the evolution of predictive analytics, emerging business intelligence solutions, and technologies to improve safe and secure product delivery.

She comes to the stage with over 35 years of diverse supply chain experience. She has spent nine years as an industry analyst with Gartner Group, AMR Research, Altimeter Group and is now the founder of her own firm. Prior to becoming a supply chain analyst, she spent fifteen years as a leader in the building of supply chain software at Manugistics and Descartes Systems Group, and twenty years as a supply chain practitioner at Procter & Gamble, Kraft/General Foods, Clorox, and Dreyer’s Grand Ice Cream (now a division of Nestle).

When not working, Lora is taking ballet, training for the triathlon season, or cooking up something special in the kitchen. She also loves textiles and is an avid quilter and knitter.