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Strategies for making the most of

SAP technology

that supports

Sales and Operations Planning

(S&OP)

March 19th, 2012

Introduction

Goals For This Session

S&OP – An Evolving Process Model

Bringing the Maturity Model & Technology Together

The Bottom Line

Questions & Comments

Provide an overview of the evolving and changing S&OP maturity

model for today's supply chain, and understand how it differs from

general models of the past.

Examine an evaluation of your organization's S&OP maturity level.

See which elements of SAP match specific levels of maturity of your

S&OP process – allowing you to develop the technology portion of

your S&OP roadmap

Gain insights that will help you determine if additional SAP technology

investments are in order

A Look at History

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Process Evolution

&

Enabling Technologies

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Align

Resilient Reliable

Adapt

Efficient

Building Horizontal Connector

Continuous Testing

Learning Improving

Orchestrate

Sense Demand

and Supply

Shape Demand and Supply based

on Market

Demand Volatility

Supply Volatility

Right Product

Right Place

Right Time

Right Cost

Cost

Procure to pay/order to

cash

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Stage 1: Characteristics

Discussion: What is the most feasible plan?

Technologies: Constraint-based planning with a focus on volume.

Decision: Trade-offs between deliver and make to meet a fixed sales

plan.

Goal:

A feasible plan • Model the network

• Recognize and respect constraints

• Gain plan visibility

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Demand Planning Supply Planning

Key:

Processes Enabled Enabling Technology

• Statistical Demand Forecasting

• Supply Planning

• Production Planning & Scheduling

• SCM: Demand Planning

• SCM: Basic Supply Network Planning

• ECC: Production Planning

• BO: Reporting & Analytics to Support KPI’s

Key Technology Points

Stage 2 Characteristics: Discussion: What is the right trade-off between go-to-market

strategies and supply chain capabilities (usually make and

deliver)?

Technologies: Advanced planning solutions with a focus on

volume. Increased needs for what-if analysis for both demand and

supply.

Decision: Trade-offs between go to market plans and supply

chain design.

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What benefits have you received from your work with S&OP processes?

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Inventory Planning

Goal:

A Feasible plan • Model the network



Match Demand with Supply

• What-if analysis

• Multi-tier inventory analysis

• Network design

Demand Planning Supply Planning

Key:


• Statistical Demand Forecasting

• Supply Planning

• Inventory Planning

• Production Planning & Scheduling

• Network Validation & Rationalization

• Scenario Management

• SCM: Demand Planning

• SCM: Advanced Supply Network Planning

• SCM: PP/DS

• Smart Ops: Multi Echelon Inventory Planning

• SCM: Supply Chain Analytics

• SCM: Strategic Supply Chain Design


Demand Translation Platform

Level

Form Function

Raw Material Cycle Stock

Semi-finished Product Forward coverage of Events:

Promotions, New Product Launch, etc.

Finished Product Safety Stock

Finished Product in the Channel Seasonal Stock

SLOB: Slow and Obsolete

Form & Function

How much?

Where?

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What is the right form?

What is the right function for

inventory to play in the supply

chain?

Inventory Definitions:

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Network Design: What is the role of inventory in our network design?

Inventory Configuration: What is the right Form & Function of

Inventory?

Inventory Policy: What is the Right Level of inventory?

Make Service Sell Source Deliver

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Stage 3 Characteristics: Discussion: What is the right trade-off between

go-to-market strategies and supply chain

capabilities to improve profitability? Mitigate

risk?

Technologies: Advanced planning solutions

combined with financial modeling and inventory

optimization with a focus on profitability. Need

for a demand translation platform.

Decision: Trade-offs between go to market

plans and supply chain design to maximize

profitability.

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Increasing levels of

granularity

Increasing need for

value network strategy

alignment

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Letter Stage 1-2 Stage 3-5

S Ask sales Focus on market drivers:

How do we best shape demand?

& Direct integration to supply

Design of the value chain to

optimize trade-offs, minimize risk,

balance cycles, and orchestrate

demand

OP Manufacturing plan Trade-offs between make, source

and deliver

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Demand Translation Platform Financial Planning Inventory Planning

Goal:







• Network design

Deliver the most

Profitable Plan

• Demand translation

• Supply orchestration

• Optimize financial drivers

Supply Planning

Key:

Demand Planning


• Financial Impact Analysis

• Business Planning & Consolidation

• Consensus Demand Planning

• Capacity Planning

• SAP BO: S&OP Tools

• SAP BO: Financial Analytics & Scenarios

• Business Analytics: Asset Analytics


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Stage 4 Characteristics:

Discussion: How do we shorten the time to

sense market changes to make the right trade-off

between go-to-market strategies and supply

chain capabilities to improve profitability and

mitigate risk?

Technologies: Advanced planning solutions

combined with financial modeling and inventory

optimization, plus demand sensing with a focus

on profitability. Need for a demand translation

platform and S&OP execution capabilities.

Decision: Trade-offs between go-to-market

plans and supply chain design to maximize

profitability.

Demand Shaping includes:

• New product launch

• Price management

• Trade promotion

• Sales incentives

• Marketing programs

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To Sense and Shape Demand to

Drive a Profitable Response

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Market Sensing Demand Translation Platform Financial Planning Inventory Planning Supply Planning

Key:

Demand Planning

Goal:







• Network design

Deliver the most Profitable

Plan




Demand Driven

• Sense channel demand

• Shape demand

• Drive the most profitable response

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Goal:

Demand Driven


• Shape demand



Key:

Demand Planning


• Demand Sensing

• Demand Shaping

• Profitability Management

• Demand Sensing

• Trade & Promotion Management

• Business Analytics: Asset Analytics

• Business Objects: Dashboards


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An adaptive network focused on driving value-based

outcomes by sensing and translating market changes

(buy and sell-side markets) bi-directionally with near-real

time data latency to align, sell, deliver, make, and

sourcing operations.

A horizontal process to sense and optimize from market to

market.

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Goal:







• Network design

Deliver the most Profitable

Plan




Demand Driven


• Shape demand


Market-driven

• Sense buy and sell-side market

conditions

• Bi-directionally orchestrate demand


Key:

Demand Planning

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Goal:

Market-driven

• Sense buy and sell-side market

conditions

• Bi-directionally orchestrate demand


Key:

Demand Planning


• Supply and Demand Collaboration

• Variability Management

• End to End Planning

• SCM: Distribution & Supply Network Collaboration

• Business Analytics: Supplier InfoNet


Where are you on your journey?

Buy technology with the Goal in mind

S&OP process definition is changing.

Are your technologies aligned to support the change?

To meet Today’s needs, we need to change

Supply Chain Paradigms.…

Are You Up to the

Challenge??

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Sop

Documents

demand planning scm

supply shape demand

inventory planning goal

operations planning

supply chain analytics

todays supply chain

supply chain capabilities

production planning