866.P4D.INFO | Plan4Demand.com | Info@plan4demand.com Presentation from SAP Insider SCM 2012 Conference, March 19TH Orlando, Florida. The session, titled “Strategies for making the most of SAP technology that supports sales and operations planning (S&OP),” offers attendees expert advice, strategies, and technology guidance to increase efficiency in the S&OP process. McCall and Cecere provide a critical overview of the evolving and changing S&OP maturity model for today's supply chain, examine a realistic approach to evaluate an organizations’ S&OP maturity level, and reveal tips for overcoming obstacles and achieving positive results. “We feel privileged to be recognized by the SAP conference planning committee as an expert in the field of business forecasting and planning. Collaborating with Lora Cecere is a great opportunity and our presentation is packed with analysis of current S&OP models, as well as advice on how to improve upon those models and increase a business’s S&OP process efficiency,” stated McCall. “It seems that 95% of companies are unclear how to use their SAP solutions for S&OP,” said Cecere. “It starts with answering three basic questions and then applying the answers to these questions to a roadmap. Andrew, and I are partnering together to unveil these insights at SAP Insider.”

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Strategies for making the most of
SAP technology
that supports
Sales and Operations Planning
(S&OP)
March 19th, 2012

2.  Introduction
 Goals For This Session
 S&OP – An Evolving Process Model
 Bringing the Maturity Model & Technology Together
 The Bottom Line
 Questions & Comments

3.  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

5. A Look at History

6. 6

7. 7

8. 8

9. 9

10. Process Evolution
&
Enabling Technologies

11. 11
Continuous
Align Building Horizontal
Connector
Testing
Learning Orchestrate
Improving
Adapt
Resilient
Reliable
Right Product Efficient
Sense Demand
Demand Volatility
and Supply Right Place Cost
Shape Right Time
Procure to
Demand and Supply pay/order to
Supply based Volatility cash
on Market Right Cost

12. 12

13. 13

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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.

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Goal:
• Model the network
A feasible plan • Recognize and respect constraints
• Gain plan visibility
Key:
Demand Planning Supply Planning
Key Technology Points
Processes Enabled Enabling Technology
• Statistical Demand Forecasting • SCM: Demand Planning
• Supply Planning • SCM: Basic Supply Network Planning
• Production Planning & Scheduling • ECC: Production Planning
• BO: Reporting & Analytics to Support KPI’s

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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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Goal:
• Model the network
A Feasible plan • Recognize and respect constraints
• Gain plan visibility
• What-if analysis
Match Demand with Supply
• Multi-tier inventory analysis
• Network design
Key:
Demand Planning Supply Planning Inventory Planning Demand Translation Platform
Key Technology Points
Processes Enabled Enabling Technology
• Statistical Demand Forecasting • SCM: Demand Planning
• Supply Planning • SCM: Advanced Supply Network Planning
• Inventory Planning • SCM: PP/DS
• Production Planning & Scheduling • Smart Ops: Multi Echelon Inventory Planning
• Network Validation & Rationalization • SCM: Supply Chain Analytics
• Scenario Management • SCM: Strategic Supply Chain Design

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Inventory Definitions:
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
Level Form & Function
 How much?  What is the right form?
 Where?  What is the right function for
inventory to play in the supply
chain?

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Sell Deliver Make Source Service
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?

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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 need for
value network strategy
alignment
Increasing levels of
granularity

23. 23

24. 24
Letter Stage 1-2 Stage 3-5
Focus on market drivers:
S Ask sales
How do we best shape demand?
Design of the value chain to
optimize trade-offs, minimize risk,
& Direct integration to supply
balance cycles, and orchestrate
demand
Trade-offs between make, source
OP Manufacturing plan
and deliver

25. 25
Goal:
• Model the network
A Feasible plan • Recognize and respect constraints
• Gain plan visibility
• What-if analysis
Match Demand with Supply
• Multi-tier inventory analysis
• Network design
Deliver the most • Demand translation
• Supply orchestration
Profitable Plan • Optimize financial drivers
Key:
Demand Planning Supply Planning Inventory Planning Financial Planning Demand Translation Platform
Key Technology Points
Processes Enabled Enabling Technology
• Financial Impact Analysis • SAP BO: S&OP Tools
• Business Planning & Consolidation • SAP BO: Financial Analytics & Scenarios
• Consensus Demand Planning • Business Analytics: Asset Analytics
• Capacity Planning

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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.

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To Sense and Shape Demand to
Drive a Profitable Response
Demand Shaping includes:
• New product launch
• Price management
• Trade promotion
• Sales incentives
• Marketing programs

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Goal:
• Model the network
A Feasible plan • Recognize and respect constraints
• Gain plan visibility
• What-if analysis
Match Demand with Supply
• Multi-tier inventory analysis
• Network design
Deliver the most Profitable • Demand translation
• Supply orchestration
Plan • Optimize financial drivers
• Sense channel demand
• Shape demand
Demand Driven • Drive the most profitable response
Key:
Demand Planning Supply Planning Inventory Planning Financial Planning Demand Translation Platform Market Sensing

30. 30
Goal:
• Sense channel demand
• Shape demand
Demand Driven • Drive the most profitable response
Key:
Demand Planning Supply Planning Inventory Planning Financial Planning Demand Translation Platform Market Sensing
Key Technology Points
Processes Enabled Enabling Technology
• Demand Sensing • Demand Sensing
• Demand Shaping • Trade & Promotion Management
• Profitability 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.

34. 34
Goal:
• Model the network
A Feasible plan • Recognize and respect constraints
• Gain plan visibility
• What-if analysis
Match Demand with Supply
• Multi-tier inventory analysis
• Network design
Deliver the most Profitable • Demand translation
• Supply orchestration
Plan • Optimize financial drivers
• Sense channel demand
• Shape demand
Demand Driven • Drive the most profitable response
• Sense buy and sell-side market
Market-driven conditions
• Bi-directionally orchestrate demand
Key:
Demand Planning Supply Planning Inventory Planning Financial Planning Demand Translation Platform Market Sensing

35. 35
Goal:
• Sense buy and sell-side market
conditions
Market-driven • Bi-directionally orchestrate demand
Key:
Demand Planning Supply Planning Inventory Planning Financial Planning Demand Translation Platform Market Sensing
Key Technology Points
Processes Enabled Enabling Technology
• Supply and Demand Collaboration • SCM: Distribution & Supply Network Collaboration
• Variability Management • Business Analytics: Supplier InfoNet
• End to End Planning

36.  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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