Real Time S & OP with APCC

Chandra Pandey – Director Supply Chain

FUJITSU CONSULTING
Agenda

■ What is S & OP, Why is it important

■ S & OP Challenges
■ Real Time S & OP – different approach
■ Oracle Sales & Operations Planning Solution
■ High Level Demo and Solution Walk through
■ Fujitsu Value Chain Practice / COE

2
S & OP – Balancing Supply & Demand
•Sales and Operations Planning (S&OP) is an integrated
business management process through which the
executive/leadership team continually achieves focus,
alignment and synchronization among all the functions of the
organization.

•Sales
•-Sale Forecast
•- Promotions
•Operations Plans
•- Production Plan
•- Inventory Plan
•- Backlog
•Financial & Strategic Plans

3
Sales & Operations Planning Integration

Generate Statistical Demand Planning

Forecast (Consensus
Sales Forecasting Forecast)

Supply Planning

Pre- SOP
Reconciliation of
Plans Finalize S & OP
release for Execution
(Match Supply /
Demand)

4
Sales & Operations Planning

Inputs Outputs

Marketing
Strategic Plans Profitability
Sales Finance
Promotional &
Service Levels
Volume Plans
Exceptions Consensus Alerts
Demand Plans Inventory Levels

Promotion
Capacity Plans Product
Executive Develop- Effectiveness
PhaseIn/Phase ment
Plan Accuracy
Out Products Manufacturing

In-Flight Real-time
Actual Promotional Consumption
Shipments Execution Data
Demand Management Differentiators

6
Demand Management

7
Why is Sales and Operations Planning important?
Companies that excel at S&OP outperform their competition

100
%
90
%
80
%
70
% Laggar

Current % performance
60 d
% Industry norm
50 Best-in-
% class
40
%
30
%
20
%
10
%
0
% Complete % Gross margin % Customer
order
fill rate retention

Source: AMR Benchmark Analytix © 2004 AberdeenGroup Performance metric

Demand Driven leaders typically have: S&OP leaders outperform their competitors:
■ 15% less inventory
• Improved order fill rates
■ 17% stronger order fulfillment
■ 35% shorter cash-to-cash cycle times • Increased gross margin
• Higher customer retention
8
Sales & Operations Planning

CHALLENGES & TRADITIONAL

APPROACH

9
 S&OP: The challenge of data integration
Pre-work activities Time required for exec S&OP prep

No process
integration
Takes a long
time to gather

What data is most challenging? #1 impediment to data collection

No access
to right data Lack of
systems

10
Traditional approach doesn’t work
Disconnected plans, long planning cycles, high latency in decision making

CUSTOMERS SUPPLIERS

Tier 1 Tier 2

Product Demand Supply Financial

planning planning planning planning

Manual measurement
and reporting from
multiple data sources Paper

HIGH LATENCY, NO VISIBILITY

• No connection between plans, plans not tied to execution

• Misalignment between metrics and objectives
• Unreliable forecasts and production plans Reactive S&OP

11
Sales & Operations Planning

DIFFERENT APPROACH

12
Better approach – Real Time S & OP
Real time, continuous and collaborative Sales and Operations Planning process

■ Replace disconnected processes

■ Replace spreadsheets with a ‘one number’ approach
Product Demand Supply Finance ■ All key stakeholders collaborate on a single version of
the truth

■ Optionally, start with traditional S&OP

process implementation
Product Demand Supply Finance ■ Better: move to real-time continuous
S&OP
■ Enable real time decision making by providing key
managers with instant “live” access to S&OP
information – Self-service S&OP Executive Review
Demand
dashboard
Trade
Supply ■ Enable key managers to determine what alternative
Risk
S& S&OP scenarios need to be evaluated by assigning
O Design activities to planners
Finance ■ Move from a periodic reactive process to a real time
P iterative and proactive process that profitably balances
demand, supply and budgets – demand sensing and
Real-time Sales and Operations Planning shaping
■ Enforce S&OP decisions directly into operational
planning and execution and close the loop via
embedded performance management

13
Better Approach - Real-time, continuous, and
collaborative Sales and Operations Planning process.
■ Eliminate decision making latency by focusing on
excellence in demand visibility
■ Sense demand more frequently and closer to
the point of consumption
■ Replace spreadsheets with one number
demand management – collaborate with all
constituents
■ Improve your forecast accuracy
■ Use advanced analytics and statistics
■ Shape demand
■ Promotion excellence and decomposition
■ Leverage granular demand signals (customer,
channel, store, shelf)
■ Identify and simulate cross selling opportunities
■ Evolve to real-time S&OP
■ Profitable demand response
■ Identify supply side opportunities
■ Define and monitor customer based metrics
■ Get real time visibility to sales tactics (price
breaks, promotions, deals)
Sales & Operations Planning

ORACLE SOLUTION

15
Oracle Sales and Operations Planning solution
Enable the next generation best-in-class S&OP process

Advanced Planning Command Center

Demand
■ Interactively engage management
Trade
S&OP
Supply
■ Move from a periodic reactive to a
Risk

Finance
Design
real time, iterative and proactive
process
■ Reduce cycle time and improve alignment by
Demantra Real-Time S&OP
automating the consensus process
■ Profitably balance supply, demand, and
Sales and budgets
operations
■ Drive tactical decisions into
planning
operational planning and execution,
detailed
and monitor performance
analysis and
simulation ■ Start quickly with best practice
Product Demand Supply Finance
templates and easily adapt to your
(Agile)* (Demantra DM) (ASCP, SNO, IO) (Hyperion)*
business – evolve at your own pace
Detailed Planner Workbenches

* Planned for future

16
Sales & Operations Planning Integration

17
Sales & Operations Planning Integration
with APCC

Demantra
Items, Orgs, etc Sales & Operation
Calendars, Users Planning
Shipments,
Bookings, UOM,
Currency,
Oracle EBS /JDE Conversion Rates, S&OP
Price Lists
Supply PLUS
Chain SCI data and unit
Management cost
and APCC
Financials ASCP data, Supply Plan
Consensus
members, SNO publish
Forecast
data files

Supply Chain
Planning
Inventory Optimization
SNO/ASCP
collections
Strategic Network Optimization

Adv. Supply Chain Planning

18
Demand Review

19
Supply Review

20
Executive Review

21
Put key management executives in charge
Engage pro-actively via Oracle Advanced Planning Command Center

Advanced Planning Command Center

Demantra Real-Time S&OP
Sales and operations
planning detailed
analysis and simulation
Product Demand
(Agile)* (Demantra DM)
Detailed Planner Workbenches
* Planned for future
Demand ■ Enable key managers to continuously
Trade
S&OP
Supply
monitor S&OP performance
Risk
Design ■ Provides 360 degree view of supply, demand,
Finance inventory, and cost details
■ Automatically translates operational to corporate
metrics
■ Enables self-service access to dashboards and
reports
■ Evaluate alternative business scenarios
■ Define business planning scenarios and assign
activities to planners for execution
■ Compare business impact of alternative scenarios
■ Link multiple planning processes together for
automated (BPEL) or manual execution
■ Power users can leverage direct links to
Demantra RTS&OP to perform detailed
Supply Finance
analysis and simulation
(ASCP, SNO, IO) (Hyperion)* ■ Shape demand
■ Simulate supply scenarios
■ Perform financial reconciliation

22
S&OP Dashboard for executive analysis
Self-service access for key decision makers

Compare alternative
business scenarios
Analyze profit
and loss

Analyze key
Planning metrics

Link directly to
Demantra RTS&OP
worksheets Evaluate supply
constraints

23
Put key management executives in charge
Execute and compare alternative business scenarios

Advanced Planning Command Center

■ Compare alternative
business scenarios
■ Planners execute
scenarios
■ Automatically
translate detailed
planning information
Suggested to corporate metrics
alternatives ■ Track assumptions
for and attach
evaluation
supporting
documents
■ Approve and drive
into execution
Demantra DM ASCP / SNO IO
■ Choose your
baseline plan
■ Drive tactical and
execution decisions

Business Assigned
■ Monitor
scenarios activities ■ Continuously monitor
Planners execute assigned activities performance and get
real-time visibility to
deviations

24
Interactive management review
Typical S&OP Management Review agenda
Continuous S&OP process Execution

Service levels
Inventory policy
Carrier contracts
Product mix
Supply network sourcing
Strategic Decisions
Balance capacity
Rebalance inventory
Track orders
Allocate products
Shape demand Track shipments
Alert issues
Tactical Decisions Operational Events

■ What has changed since last month?

■ Are we on plan financially? Is there any need to revise long term plans?
■ How are we performing to performance metrics?
■ What new risks do we need to consider?
■ What decisions need to be made now and in the near future?
■ How are product families performing?
■ Are we on track with product development?
■ Do we have any critical constraints?
Adapted from “Enterprise Sales and Operations Planning” -
by Palmatier & Crum
25
Monitor and manage – Close the loop
Control the S&OP process with Oracle Advanced Planning Command Center

Executive performance
summary

■ Measure performance to plan

■ Monitor sales, revenue, and profits against
plan
Alerts ■ Performance to budgets and financial plans
■ Accuracy of the forecast at multiple levels
■ Production performance to plan
■ Inventory performance to plan
Budget analysis
■ Proactively respond to
deviations in performance
■ Identify root cause, assign accountability,
and manage corrective action
■ Define and evaluate alternative business
scenarios
■ Manage execution of scenarios; assign
tasks to planners and other stakeholders

Profit and cost analysis

26
Close the loop
Problem ► Cause ► Alternative solution evaluation

Why do I Change product mix

What have this

problem problem? Competitor Launch promotion
promotion
do I have?
Sales selling wrong Adjust pricing
product mix
Sales below target
Promote alternate
Pricing issues product
What
Revenue below target actions
should I
Plan overtime evaluate?
Critical part shortage

Supply shortages Outsource

Lost production
capacity production

Lost sales due to lack Change inventory

of supply levels

Hedge supply

Analy Plann
sis ing
27
 <Insert Picture Here>

Start quickly with best

practice templates and easily
adapt to your business

28
Start quickly with best practice templates
Out-of-the-box starting point for Sales and Operations Planning

• Start quickly, integrated with ERP

– Seeded data streams for data commonly used in
the process
– Common data model shared with DM, PTP
– Seeded performance metrics
– Seeded workflows

• Seeded templates for collaboration

– Seeded consensus planning worksheets
– Easily tailored to your business

• Configurable and extensible

– Collaborate at any level

• Complete out of the box support for a

typical best practice sales and
operations planning process

29
Start quickly – Progress at your own pace
Evolve to a best-practice Sales and Operations Planning process

Network design
Promotion optimization
Risk Management
Inventory Optimization
Product life cycle
management

Demand shaping
Demand and supply balancing
Workflow driven exceptions
Promotion planning
Financial planning

Eliminate Single consensus demand number

spreadsheets Pre-defined S&OP analysis
worksheets
Demand and supply review
Financial review
Personal dashboards

30
Phased Approach

•Demantra Demand Management

•Supply Planning (ASCP)
•Demantra –
•Real Time Sales & Operations Planning
•Constraint Planning
•Advanced Planning Command Center
•(APCC)

31
Sales & Operations Planning

SOLUTION WALK THROUGH &

DEMO

32
APCC Setups

33
Scenarios creation

34
Analysis in APCC- Example

35
Analysis in APCC- Example

36
Analysis in APCC- Example

37
Analysis in APCC- Example

38
S & OP Dashboard to Demantra S & OP

39
Value Chain Practice Differentiators
• 60 plus
practitioners
Experienc value Chain
• 20 plus
ed practitioners
specifically in
Practitione Value chain
• Keeping
Planning up( • Keeping up
rs
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average with Cutting
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quickly
• Welch’s -on • quickly
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Center of new releases
Trade new releases
Trade Trade
e.g. APCC on
Promotions e.g. APCC on
Promotions Promotions
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Guru Experts –
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40
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Value Chain COE

Center of Excellence
(COE)

Core
Demantr Supply EBS
a Industry
Chain Supply Specific
COE Planning Chain

❑Lab Environment – current and last release ( R12, 11.5.10)

❑Leading Practice Repository
❑Fujitsu Solution sets
❑Demonstration Scripts
❑Offerings – Assessment studies

41
Q&
Q U E S T I O N S
A N S W E R S

A 42
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