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June 27th, 2012

S&OP LEADERSHIP EXCHANGE: GLOBAL ROLLOUTS – BALANCING STANDARDIZATION & LOCALIZATION

The Web Event will begin momentarily with your host:

Andrew McCall

plan4demand

Understanding the impact and reasons why companies are more interested

in a Global view of Sales & Operations planning – Does this fit your

organization?

Gain some insight into the obstacles and roadblocks that a global rollout of

S&OP faces :

where are the complexities?

which ones are important?

which ones are just “noise”?

Review some of the implementation strategies than can offset the obstacles,

and establish a global process, without losing the local decision making and

action orientation that is so critical to a high performance S&OP process.

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Why? What reasons do we have to drive towards a global view?

Leverage best practices

Common Process model allows for us to aggregate and disaggregate our views

of data, business conditions, reporting, etc.

Common Metrics and KPI’s for measuring success

Labor, Market Conditions, Tax, Cost to Produce arbitrage & flexibility is

desirable in a global economy

Global growth diversifies risk in our organizations

Sounds great – but are we making any progress?

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Yes 77%

No 23%

Whether Operate Globally

SOURCE: Supply Chain Insights, VOICE 2012 Base: Total Sample (61)

Q12. Does your company operate “globally?”

Base: Operate Globally (47)

Q13, Which of the following best describes how your company operates “globally?” Please select the one that fits best.

19%

32%

11%

38%

How Operate Globally

Global (regions roll up

into global

team; plan

globally to act

locally)

Multi-

national (countries roll up into

regional operation;

global planning)

Multi-

national (countries roll

up into regional

operations;

regional

planning)

Regional (regional

operations

supported by

regional supply

chains)

43% Multi-national

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Today’s realities

Company’s have multiple S&OP processes

Supply Chain vision is diluted or poorly understood globally

Unit performance metrics and global trade offs can easily be misaligned

Results are still regional, so decision making processes are too

Global governance has no real teeth

Infrastructure

• Data

• Reporting

• Systems Footprint

Global Supply Chain Consistency

• Vision

• Metrics/KPI’s

• Process Consistency

• Business Model

Culture/Politics

• Transparency

• Goals

• Communications

• Decision Making

Governance & Funding Model

• Common Oversight

• Suggested vs. Required

• Local Requirements

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• Product Roadmap

Decisions – Global Level?

Local Market Driven?

Both?

• Pricing Strategy? Brand

Drive? Market?

• Top Down Revenue

Planning?

• Local Market/Region

Bottoms up Forecast?

• Do we share GAPS with

“Global Process”, of

keep in house?

• Global Manufacturing

Footprint?

• Bias towards “Regional”

service?

• Global Balance Decisions

vs. 4 walls of the local ops

• Transparency

• Gaps

• Risks & Opportunities

• Financial Trade Offs

between regions

• Executive Regional Targets vs. Global Goals

• Review & Action Surrounding:

• Gaps & Decision Making

• R&O

• Communicating the Plan/Decision Buy In

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Where are the following key decisions made in your organization?

Select your answers on the left side of your screen

Portfolio Management (New Products, Markets, SKU Rationalization, Pricing?)

Regionally

Global

Demand Management (Volume projections, Demand Forecast, R&O?)

Regionally

Global

Supply Management (Where made, Capacity, Sourcing Changes, Network, Inventory)

Regionally

Global

Pre-S&OP/IBR (R&O, Gap Closers, Scenario Recommendations/Decisions)

Regionally

Global

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Global Roles – Leveraging Span & “The Helicopter” view of the business

Need to provide overall supply chain strategy, and how it supports with and works with

individual markets

Establish Common Practices for key planning processes so that a base layer of consistency exists

to leverage when viewing the business as a whole, setting targets and making decisions

Common KPI platform (methodologies and calculations, not necessarily targets)

Outline where sourcing, distribution and production footprints server more than one region

Local Roles – What needs to stay close to markets & operations to drive solid decision

making and action?

Market Intel & Demand Signal Management

Channel & Business Model differentiation within regions or local markets

Target and Threshold setting

Local Assumptions based on Demonstrated Performance

Achieving Balance? What brings these two vantage points together and

synchronizes them, instead of putting them at odds?

Transparency

Understanding the role that each “view” plays in the overall Decision Making process

surrounding mid and long range planning

Top Down - Global Template, Local Customization

Creation of a Global Process Template

Global Reporting Package

Local changes to the sub processes to help support decision making, but still rolling to a top line

package that is standard world wide

Actions and Decision making at both the Global and Local level

BEST FIT?: Global Operating Footprint, Similar Channels to Market World Wide – StratPlan

managed globally with local performance inputs

Bottom Up - Local Template, Global Rollup Requirements

Local Templates by Region – minimum standards outlined globally

Financial Projection, R&O and KPI’s roll up based on common methodology for consolidation

Global Rollup is largely a reporting & monitoring view – actions and decision making are

managed locally against local targets & goals

BEST FIT?: Regional/Local Operating Footprint, Dissimilar Channels to Market across different

regions and localities – StratPlan managed locally in market with global inputs or assumptions

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Hybrid - Global Center of Excellence

Help provide structure to either the Top Down or Bottom Up Model

Create an overall Governance and Process Model “review board” for localizations, or entire

local processes to be vetted, “certified” and monitored for performance

Establishes a top down view that can be used to highlight misalignments in goals, objectives, or

gaps in strategy that result in growth, changes in market conditions or portfolio shifts in the

categories (ours or our competitors)

Allows local markets or regions to pull on “expertise” and experience from other markets facing

similar challenges without having to “re-invent the wheel”

Allows for Global adjustments to the model or strategy by incorporating changes in the strategic

plan into the CoE charter and definition and be rolled out consistently

Manage the Roadmap & Priority of initiatives and the rate of change

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Global Consumer Goods Company:

OTC Products still requiring a high degree of validation and FDA type compliance

4 primary markets (EMEA, NAFTA, South America, AsiaPAC – with an emerging BRIC strategy

2 production facilities supporting global supply

4 In Market Packaging and Distribution facilities supporting Global Demand, and Local

Postponement strategy

Challenges:

5 different S&OP Processes

Supply viewed and planned through a site specific Supply Review process – disconnected from

the global view, silos between Base Production & Packaing

Manufacturing Flexibility Strategy not well understood at the facility level

Demand driven by market specific financial targets

Impacts

Customer Service Levels falling while Inventory was growing – mix was wrong based on

fractured planning & strategy

No visibility across the globe into operating capacity and market demands that could be used to

balance supply & demand fluctuations. Idle capacity in one market, customer service issues in

another market that could be resolved by pulling that capacity into the plan.

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Global Center of Excellence – “Chicken or the Egg?” Needed to redefine the S&OP process model for the entire business – Top Down, Bottom Up?

Several Key decisions that needed to be reached: Global Supply Footprint Trade Offs – Cost Per Unit - Flexibility

Demand Consensus at a market level – how do we consistently arrive at a number that is locally viable, and

not linked to a “site view” of packaging capacity

Common Metrics & KPI’s that align with the overall Strategic Plan

Governance Model to support local demand decisions being fulfilled by a global network Establish priorities in terms of overall business strategy, not local cost per unit

Create internal service level requirements and metrics

Define Roles in terms of the planning process – R.A.C.I model for units, global team and decision making

domain

Roadmap Built S&OP Teams

Steering Committees (Local & Global) – evolved into Governance Team

Global Project Team (included Local Champions)

Local Champions & Project Team

Outlined Global Standard Maturity Model – Stages of Evolution

Local Level Diagnostic – How far off are we, target stage of evolution by region or site

Establish Rollout Sequence

Create Playbook for Rollout

Used Continuous Measurement to manage progress and Governance reporting

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Strategy – needs to be well understood from a global and local level in order to make

good decisions on the right model to use – top down or bottom up

Develop Balance – the design needs to be considered from both the global view and

local decision making. If we are out of balance – it becomes a “read out” and not

actionable

Implementing the model – you don’t have to start with a “CoE” – but you CAN leverage

the principles and rollout strategy even if you don’t establish the global layer in a very

formal fashion. Take a “best of the best” approach and use the components that fit your

organization best.

This Summer – Look for:

A summary of this years survey data across all 6 sessions to date

A schedule of the fall webinar topics

A few other surprises in the group – have a good summer!

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September 12th S&OP Technology: A tool, or a strategy?

October 3rd S&OP Jump Start: Starting or Re-Starting

your process in less than 90 days

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