Strengthening the connection between the business and supply chain network

Strengthening the connection between the business and supply chain network Thursday October 19, 201711:00am PT | 2:00pm ET

Copyright © 2017 Deloitte Development LLC. All rights reserved. 2

Ken Olsen Ken is a Managing Director in Deloitte’s Supply Chain & Manufacturing Operations (SC&MO) service line and is the Global Lead for the Supply Chain Planning Market Offering. Ken has over 19 years of consulting experience assisting clients in the transformation of their supply chain capabilities including implementation of Integrated Business Planning solutions. His clients include companies in Consumer Products, Retail, Manufacturing, Process, High-Tech, and Automotive industries. His areas of experience include end-to-end supply chain planning process design, integrated business planning, demand planning, supply planning, inventory management, and supply chain system implementations.

Ken Caron Ken is a Senior Manager in the Supply Chain & Manufacturing Operations (SC&MO) service line. He has over 10 years consulting experience in strategy and operations and 19 years of industry experience for process, manufacturing and life sciences companies. Ken has rich experience in large scale implementation of APS solution across industries. His core area of expertise are S&OP / IBP, demand and supply planning, inventory management and end-to-end supply chain design and implementation. His experience includes full life cycle technology enabled supply chain transformations including current state assessments, strategy and visioning, future state process design, and tool selection.

Vivek Soneja Vivek is a Managing Partner on Anaplan’s Business Transformation team. He is the Global Lead for Supply Chain Line of Business at Anaplan. With over 20 years of consulting and industry experience, Vivek's management expertise includes business/IT/operations strategy, business transformation, enterprise improvement, supply chain management and program management. He also has strong expertise in managing and delivering large and complex technology enabled transformation programs.

Welcome


Agenda

Introduction to Integrated Business Planning 8and Common Challenges

Integrated Business Planning — A New Standard 12

Connected Planning 18

Case Study 24


IntroductionIntegrated Business Planningand Common Challenges


Polling Question

What Industry does you company operate in? Please Choose.

□ Consumer Products

□ Manufacturing/Industrial Products

□ Energy/Utilities

□ Telecom/High-Tech

□ Health Care/Life Sciences

□ Retail

□ Food & Beverage

□ Other


Polling Question

What Functional role do you play in your company? Please Choose.

□ Sales/Marketing

□ Finance

□ Supply Chain

□ Production/Operations

□ Procurement

□ Other


Polling Question

Where are you in your IBP JourneyPlease Choose.

□ Haven't Left, Still Planning

□ Just Getting Started

□ Starting to Get Comfortable

□ Well on My Way

□ Quite Far Along


Integrated Business Planning (IBP) can help keep you on the right path to realizing your plans

Alignment and AccountabilityEnsure a clear understanding of the “one” plan with clear accountability for all stakeholders to develop the plan

Objectivesof IBP

VisibilityProvide on-going visibility to financial projections vs. strategic plans and budgets and projections of supply chain constraints

Decisions and ActionsProvide a structured process open to issue identification with a focus on decisions; drive action items across the organization plans to achieve


Each function within the organization needs to work together and have these six components in place for a holistic planning view. Lack of discipline and demonstrated capability limit IBP to a supporting process

Key Reasons Why Organizations are Failing at IBP

No single person responsible for a unified planning approach across functions: lack of

discipline and inconsistent reporting templates, calendars, and approaches

Misaligned incentives, forcing functions to sub optimize decisions and pull in

opposing directions; unrealistic targets set

No “market pulse” with missed opportunities; inconsistent data across

functions; too many numbers too little insights; limited scenario analysis

Unclear objectives and lack of a clearly communicated mission

Limited capabilities, inability to manage data to drive real-time

insights

People trained to report; poor decision-making ability/transactional view; “gamesmanship: in the forecasting

process/numbers

Mission

Analytics

IBP

Finance


The planning processes should connect information across multiple functions, each with their specific requirements for the same, single company-wide operating plan

Some Companies Do Not Execute Planning as a Cross-Functional Capability

Stakeholder OverviewFor some companies, each function looks at their own unique plan with its own lens, and does not reconcile them, nor perform

scenario analyses to predict financial impact to the organization.

Executives

Shareholder Value,KPI’s

Finance and Finance Operations

Key Performance Indicators (KPIs), Annual Budget, Latest Estimates

Procurement

Raw materialsSuppliers

Shareholder Value

Manufacturing

LocationsSKU’s

Supply Plan

Purchasing PlanFinancial Statements, Management Reports

and Analytics

Sales/Marketing

Key Accounts, Brand Management

Demand Plan

Marketing Plan

Supply Chain —Logistics

SKU’sWarehouses

Logistics Plan

Inventory Plan


Polling Question

What are the primary challenges within your organization impacting the ability to establish Integrated Business Planning?

□ Sponsorship

□ System limitation/data concerns

□ BU Alignment

□ Skills gaps/training

□ Culture/Change Management

□ Other


Integrated Business PlanningA New Standard


IBP has defined a “new” standard for traditional S&OPIBP not only raises the bar for S&OP, but it addresses many of the challenges that have limited the maturity and sustainability of S&OP over the last 20 years

Traditional S&OP Integrated Business Planning (IBP)

Executive Reviews

Demand Reviews

Supply Reviews

S&OP Reviews

Financial Reviews

A cross-functional meeting-driven processthat provides governance to align demand and supply plans and escalate exceptions

…but only a “piece” of the puzzle

IBP fully integrates all planning processes from strategic to operational, to optimize

decision making against financial and strategic goals

Innovation Planning

Pricing and Promotional

Planning

Inventory Planning

Financial Planning

Strategic Planning

Production Scheduling

Supply Planning

Demand Planning


Lack of discipline and capabilities cause organizations to miss projections and earnings targets, with related misalignment in asset utilization and inventory levels.

IBP Has Defined a “New” Standard for the Traditional S&OP . . .

Alignment of operational plans with financial plans

Driven by annual and operational planning needs

Focused on goals beyond the execution window

Performance driven with clear metrics and KPIs

A cross-functional process owned by senior leadership

Elevating issues, making decisions, and taking actions

Proactive stakeholder engagement and ownership in process

An ongoing supply/demand matching process

Consider pricing in manufacturing decisions

• Alignment of strategic, innovation, financial, inventory, and operational plans

• Tuned to evolving customer and marketplace needs

• Strategic plan linked with responsiveness to near-term changes and disruptions

• Enabled by rich analytics and technology capabilities

• A cross-enterprise process owned by the CEO, and the C-suite

• Issue resolution making financially backed decisions and taking actions

• Continuous stakeholder skillset development and aligned incentives

• Pricing, promotional inputs integrated with demand shaping and sensing

• Shape pricing and propose volume/mix adjustments based on customer priorities

Not Only . . . . . . But Also


IBP is a competitive edge capability that links multiple decision-making processes to drive consensus on a unified go-to-market plan. IBP brings corporate closer to their customer, and cohesively links corporate to its manufacturing function when working well.

IBP

Demand Consensus

Supply Consensus

PlanConsensus

FinanceConsensus

1

23

4

What should we sell…

Commercial consensus on unconstrained market demand, pricing, and promotional impacts

What can we sell…

Supply Chain consensus on what we are able to supply, and potential alternatives

What will we sell…

Business consensus on most advantageous response to supply constraints

How will we improve performance…

Finance consensus on financial goals, impacts, and needed future actions

1

2

3

4

IBP brings a company closer to its customers and synchronizes the value chain

Integrated Business Planning is the overarching way in which leading companiesrun their business to achieve their overall strategy.


IBP is a leading capability that aligns segments, functions, brands, channels, geographies, customers, and supply plans to the financial strategy and metrics linked to the portfolio strategy.

IBP Drives Development and Execution of an Integrated Plan

Portfolio Strategy and

Planning

Inventory Planning

Financial Planning and

Analysis

Demand and Commercial

Planning

Supply Planning

Operational Reporting

and Analysis

Plan Adjustments

IBP

Demand Consensus

Supply Consensus

PlanConsensus

Finance Consensus

1

23

4

Operational Execution

Finalize Product Portfolio with Financial Targets

Update the Financial Plan (FP&A)

Executive Leadership Leads Review of the Operating Plan

Develop an Unconstrained Consensus Demand Plan

Position Inventory to Optimally Balance Service and Cost

Evaluate Supply Constraints and Assess Alternatives

Engage Operational Leadership to Finalize the Operating Plan

Finalize the Operating Plan


Integrated Business Planning Capability Framework

The technologies (software and hardware) and tools required to support the capability

Clear roles, decision rights, and policiesand incentives that promote behavior to drive

the organization to achieve its mission

A cross-functional set of processes and activities designed to align the

organization to one desired outcome

IBP should be “how” you run the business; the IBP mission is how you will operate, and what IBP will deliver

Information needed to drive scenario planning and real-time, insight-driven

decision making

The competencies, skills, talent infrastructure, and workforce planning

that enable an optimal talent base to execute the capability

Mission

Analytics

IBP

Finance

Six dimensions


Connected Planning


Planning

Execution

Operations

Data People

Plans

Anaplan Platform: Connected Planning Approach and Potential Benefits

• Top-down alignment• Dynamic decision-making• Faster cycles (weeks-to-days)

• Automated adjustments• Platform-enabled collaboration• Cross-functional orchestration

• Driver-based modeling• Scenario (what-if) analysis• Resource optimization


What is Connected Planning?

Across one department or area

Across the company

One business process

Speed

Agility

Visibility

Single, secure source of planning and decision data

Data

People

Plans

Greater collaboration, deeper insights, faster alignment

Dynamic, continuous planning for any area of your business

The new way connected planning A new way to run your business Connected planning potential benefits

1.5% SG&A savings through improved visibility and better decisions

3Forrester TEI study

Faster planning cycle times —2 weeks to 2 days

1Del Monte

Expense variance reduced by 50% from increasing exchange rate planning frequency from quarterly to monthly

2Intel Security

1DelMontecustomertestimonialhttps://www.anaplan.com/customers/del-monte-case-study/2IntelSecuritycustomertestimonialhttps://www.anaplan.com/videos/intelsecurity-on-managing-sales-compensation-with-anaplan/3ForresterTotalEconomicImpactTM studyhttps://www.anaplan.com/papers/forrester-tei-infographic/thanks/


Connected Planning in Supply Chain

SCPlanning

SCExecution

SCOperations

• Demand & Supply Planning• Sales & Operations Planning• Trade Promotions Planning• New Product Planning

• Supply Chain Finance• SC Predictive Analytics• Trade Promotions Optimization• Resource Capacity

• Volume Forecasting• Trade Promotions

Management• Inventory/Distribution

Management• New Product Management

Across one department or area

Across the company

One business process


Three journeys in core functions that drive growth and performance

5The fifth journey integrates all functions to connect across the company.

1

2

3

Five Journeys to Connected Planning

Finance

Supply Chain

Sales

4The fourth journey connects the core functions

Sales + Marketing

Supply Chain + R&D

Finance + HR/IT


• Mobile

• Collaborative

• Cloud based

• Scalable

• Processing power

Finance

International

Wholesale

Merchandising

Canada

Retail

• Real time

• User driven

• Connected across the enterprise

• Modeling & Predictive Capabilities

Integrate and connect multiple dynamic data sources in real time

Infuse analytical capabilities to drive better planning that matches demand

Collaborate within and across channels and business functions

Connect single version of the truth for plans across functions and to which the Company is executing

Dynamically connect, reconcile, and track plans (e.g., top down and bottom up)

Reduce or eliminate multiple planning solutionsand offline spreadsheets

Alig

ned

an

d L

inke

d

Global Retailer

Company Planning Potential Benefits


Case StudyLarge Coop


Transform to be more insight–driven where decisions are made in the light of known facts, reliable data, and critical analysis through the Implementation of a enterprise business planning platform

The Program

Anaplan stood out as a key technology enabler that would provide a flexible platform to support the boarder Integrated Business Planning (IBP) Vision

Predictive Analytics GovernanceData

IntegrationReporting and

KPIsProcess

Improvement

Use of a common business language and technology across functions

Standardization of disparate planning and reporting processes

Transparency, accuracy and reliability of data for key decisions


Multi-phased roadmap that starts with a solid — yet flexible — data integration and Anaplan architecture, which will support an Integrated Business Planning framework

The Roadmap

• Obtain leadership support • Establish program

governance

• Future-state Vision• Requirements and design• Rapid prototyping

• Complete Financial Planning Solution• Data Integration Architecture• Scalable and extendable platform

• Sales plan by Rep and Region• S&OP plan with detailed production

constraints• Supply chain plan for raw materials

and freight

• Operational Excellence• Continuous improvement in forecast

accuracy and reductions in cycle time• Improved insights

Leadership Support

Discovery Phase

Foundation Release (Finance)

S&OP and Supply Chain Planning

Business as Usual

1

2

34

5


Wrap UpKey Take-AwaysQ&A


Successfully unlocking the value of IBP requires dedication of stakeholders across the enterprise and a strong focus on process and change

Key Takeaways

Critical Elements

□ Clear vision - IBP is a journey: Understand process and capability gaps and the value from closing them, and build a roadmap of prioritized actions that drive quick wins and sustainable benefits

□ Sponsorship: Executive willing to “Sell” the process and align stakeholders

□ Change Management: IBP touches many functions across the enterprise; care must be taken to bring the stakeholders along


Q A


Appendix


Integrated Business Planning will likely have a substantial impact on all aspects of enterprise value creation, including revenue growth, cost reduction, and improved cash flow.

Deloitte’s Enterprise Value Map — IBP Can Increase Shareholder Value

IBP Levers

Value Drivers

Functions Driving Value

KPIs

Margin-based optimization of product/volume/customer mix

More efficient cross-functional promotion

planning process

Reduced cost of variability throughout the value chain

Reduced op. costs with optimal tactical planning

decisions

Higher utilization of fixed assets

Optimal product mix based on available capacity

Better trade-off between service and cost

Improved planning decisions based on

inventory value

Reduced Order-to-delivery cycle time

Improved product allocation

Mitigated supply disruptions and improved

SC network inventory

Smoother new product introduction process

Better collaboration with customers on product

transitions

Enhanced product mix availability alignment with

demand

Network-wide cost-based optimization decisions

Fewer production disruptions Higher inventory visibility

Lower schedule volatilityDecreased occurrences of expedited orders

Reduced safety stock due to lower demand

uncertainty

Stronger alignment across functions

Enhanced financial and capacity planning

(strategic, annual, and Latest Estimates)

Higher user adoption and process sustainability

Alignment between IBP and pricing initiatives

Shareholder Value

DeliveryExperience

ProductInnovation

Revenue Management

Fixed Asset UtilizationCost Reduction Working Capital

UtilizationCompany Strengths

KPIs KPIs KPIs KPIsKPIs KPIs KPIs

Sales/Marketing ExecutivesSupply Chain Supply Chains and Finance

Manufacturing, Procurement, Supply Chain

Revenue Growth Operating Margin Asset Efficiency Sustainability

About DeloitteDeloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee (“DTTL”), its network of member firms, and their related entities. DTTL and each of its member firms are legally separate and independent entities. DTTL (also referred to as “Deloitte Global”) does not provide services to clients. Please see www.deloitte.com/about for a detailed description of DTTL and its member firms. Please see www.deloitte.com/us/about for a detailed description of the legal structure of Deloitte LLP and its subsidiaries. Certain services may not be available to attest clients under the rules and regulations of public accounting.

Copyright © 2016 Deloitte Development LLC. All rights reserved.36 USC 220506Member of Deloitte Touche Tohmatsu Limited

This communication contains general information only, and none of Deloitte Touche Tohmatsu Limited, its member firms, or their related entities (collectively, the “Deloitte Network) is, by means of this communication, rendering professional advice or services. Before making any decision or taking any action that may affect your finances or business, you should consult a qualified professional adviser.No entity in the Deloitte Network shall be responsible for any loss whatsoever sustained by any person who relies on this communication.