16. S&OP Evolution
Greater Benefit
Business- • Growth
Sales Driven
planning Driven • Resilience
Match Demand
Maximize • Efficiency
with Supply
Profitability
Market Driven
Manufacturing- Demand Driven
Driven Maximize
Maximize
Opportunity and
Deliver a Feasible Opportunity
Mitigate Risk.
Plan for Operations Sense and
Orchestrate
Match Demand Shape
Demand
with Supply Demand
Market to Market
20. Demand-side Views Supply-side Views
Hole in Enterprise
Architectures
Account-Level
VMI C
A Supplier Supplier Supplier Supplier
Downstream Data Distribution Distribution Distribution
Network Network Network
21. Demand-side Views Supply-side Views
Demand
Translation
Account-Level
VMI C
A Supplier Supplier Supplier Supplier
Downstream Data Distribution Distribution Distribution
Network Network Network
22. A Forecast is not a Forecast is not a Forecast
Increasing need for value
network strategy alignment
Business Planning
Forecasting
Constrained Forecast
Increasing levels of
granularity
22
23. Getting to Letter Perfect….
Common Practice Market-driven Focus
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
23
24. The Need for Balance
S: Go-to-
OP: Demand
Market
Strategies & Orchestration
Goal
24
35. Looking at Supply Chain as a Complex
System
Profitable Growth
Revenue Cost of Goods
Corporate
Trade-offs Working Capital
Corporate Social Responsibility
Investment
Trade-offs R&D Strategy and Investment Asset Strategy and Investment
Forecast Accuracy Customer Service Inventory
Supply Chain
Trade-offs Channel Strategy Product and Supplier Strategy
Service Portfolio
Sales Distribution Manufacturing Logistics Procurement
Supply Chain Policies Policies Policies Policies Policies
Waste
Returns Backorders First Pass Yield Empty Miles Material Yield
36. Looking at Supply Chain as a Complex
System
Profitable Growth
Revenue Cost of Goods
Corporate
Trade-offs Working Capital
Corporate Social Responsibility
Investment
Trade-offs R&D Strategy and Investment Asset Strategy and Investment
Forecast Accuracy Customer Service Inventory
Supply Chain
Trade-offs Channel Strategy Product and Supplier Strategy
Service Portfolio
Sales Distribution Manufacturing Logistics Procurement
Supply Chain Policies Policies Policies Policies Policies
Waste
Returns Backorders First Pass Yield Empty Miles Material Yield
38. Comparison of Revenue/Employee for
the Period of 2000-2011
P&G Colgate Unilever Kimberly-Clark Nestle Kraft
700
Revenue/Thousands of Employee
600
500
400
300
200
100
0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
39. Comparison of EBIT/Employee for the
Period of 2000-2011
P&G Colgate Unilever Kimberly-Clark Nestle Kraft
140.0
120.0
100.0
EBIT/Employee
80.0
60.0
40.0
20.0
0.0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
40. Consumer Products: Comparison of
Days of Inventory
P&G Colgate Unilever Nestle Kraft
80
75
70
65
60
55
50
2002 2003 2004 2005 2006 2007 2008 2009 2010
41. Consumer Products: Cost of Sales as
a Percentage of Revenue
Unilever Kellogg Kraft General Mills
Campbell Hershey P&G
70%
Cost of Sales as a % of Revnue
65%
60%
55%
50%
45%
40%
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011