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In the years after The Great Recession of 2008, companies focused their energy and attention in driving efficiency and being more cost effective. Forecast accuracy became even more important. However, in the last 2 years the global economy has shown revival signs and growth is now both a possibility and a priority. But, how can companies continue to drive cost efficiency and, at the same time, foster growth? Revenue Growth or Cost Control? Strike the Right Balance with S&OP and Demand Planning TechnologyThis webinar will discuss S&OP in the context of balancing control vs. growth—with a look at the prospects and pitfalls of balancing global, regional and local planning and decision making. We will discuss how an established S&OP process and the right technology: Enables top executives to drive their strategic agenda all the way to the operational and transactional layers Helps companies to maintain financial and operational control while fostering revenue growth Creates the agility to pursue both external growth opportunities and internal drive for growth through innovation Join us to learn how to optimize your company’s approach to drive growth, whether you are new to S&OP and Demand Planning or you are evolving your strategy and process.
Citation preview
© StrataBridge 2014
WE GROWTH
© StrataBridge 2014
Chris Turner Co-Founder, StrataBridge
We are a Boutique Consulting Firm.
We advise fast-moving, brand-led organisations on strategy,
innovation, and operations.
We help organisations achieve sustainable growth in
unpredictable circumstances.
We’re specialists in joined-up decision-making – Sales and
Operations Planning (S&OP), Integrated Business Planning
(IBP) et al – as a means to delivering strategy.
We’ve worked with companies of all shapes
and sizes, from the UK to Europe, from
the Americas to Asia and from the
Middle East to Africa.
We help companies create their future.
Our ideas, processes and interactions are
designed to allow organisations to bridge the
gap between where they are and where
they want to be.
A (very) Brief Introduction
© StrataBridge 2014
So, what’s the BIG Idea, Question and
Opportunity?
A rapidly and
continually
changing context
is opening-up
increasing
opportunities for
growth against a
backdrop of
unprecedented
change and new
risks
Many (possibly
most?) organis-
ations decision-
making processes
(particularly
‘S&OP’, ‘IBP’
etc.) have been
designed on the
(often implicit)
assumption of
‘control’
How
do we adapt
routines
we’ve refined
for operational
efficiency to
enable similar
degrees of
strategic
flexibility?
© StrataBridge 2014
Some Structure and Thought-
Provokers…
Mindset trumps Process – Think
‘Eco-system’ not ‘system’…
What’s going-on out there (and with
you)? Big trends and growth drivers…
Adapting the decision-making ‘eco-
system’ – Both Control and Growth…
© StrataBridge 2014
Mindset trumps Process –
Think ‘Eco-system’ not
‘system’…
What’s going-on out there (and with
you)? Big trends and growth drivers…
Adapting the decision-making ‘eco-
system’ – Both Control and Growth…
Some Structure and Thought-
Provokers…
© StrataBridge 2014
Thinking about this webinar… and developing a
Growth Mindset
© StrataBridge 2014
© StrataBridge 2014
Results
‘Eco-System’
Design/Behaviour
Strategy
Thinking about this webinar… and developing a
Growth Mindset
© StrataBridge 2014
"Invention is by its very nature a disorderly
process," says current CEO George Buckley,
who has dialled back many of McNerney's
initiatives. "You can't put a Six Sigma process
into that area and say, well, I'm getting behind
on invention, so I'm going to schedule myself
for three good ideas on Wednesday and two
on Friday. That's not how creativity works.”
"You cannot create in that atmosphere of
confinement or sameness," Buckley says.
"Perhaps one of the mistakes that we made as
a company—it's one of the dangers of Six
Sigma—is that when you value sameness
more than you value creativity, I think you
potentially undermine the heart and soul of a
company like 3M.”
McNerney declined to comment for this story.
Control, Growth and ‘Culture’…
© StrataBridge 2014
Mindset trumps Process – Think
‘Eco-system’ not ‘system’…
What’s going-on out there (and with
you)? Big trends and growth
drivers…
Adapting the decision-making ‘eco-
system’ – Both Control and Growth…
Some Structure and Thought-
Provokers…
© StrataBridge 2014 © StrataBridge 2014
How do you expect your companies growth
prospects to change over the coming year or two
compared to the last year or two?
• Significantly increase
• Moderately increase
• About the same
• Moderately decrease
• Significantly decrease
Understanding your context… your
opportunities and expectations for Growth…
© StrataBridge 2014
2009 2011 2012 2013 2014 2015 2010
10%
40%
50%
60%
30%
20%
How do you expect customer demand for your company’s products or services to
change, if at all, in the next six months?
Source: McKinsey Global Economic Conditions Snapshot Quarterly Survey April 2009 - June 2014
Increase
Stay the same
Decrease
Don’t know
47%
43%
9%
1%
Understanding the external context…
© StrataBridge 2014 © StrataBridge 2014
60% Asia 14% Africa
11% Europe
8% North America
6% South America
0.5% Australia
A tipping balance:
Understanding the external context – Big
Trends pointing towards growth…
© StrataBridge 2014
2011 2030 2050
PPP
Rank Country
GDP @ PPP
(2011 US$bn) Country
Projected
GDP @
PPP
Country
Projected
GDP @
PPP
1 US 15,094 China 30,634 China 53,856
2 China 11,347 US 23,376 US 37,998
3 India 4,531 India 13,716 India 34,704
4 Japan 4,381 Japan 5,842 Brazil 8,825
5 Germany 3,221 Russia 5,308 Japan 8,065
6 Russia 3,031 Brazil 4,685 Russia 8,013
7 Brazil 2,305 Germany 4,118 Mexico 7,409
8 France 2,303 Mexico 3,662 Indonesia 6,346
9 UK 2,287 UK 3,499 Germany 5,822
10 Italy 1,979 France 3,427 France 5,714
11 Mexico 1,761 Indonesia 2,912 UK 5,598
12 Spain 1,512 Turkey 2,760 Turkey 5,032
13 South Korea 1,504 Italy 2,629 Nigeria 3,964
14 Canada 1,398 South Korea 2,454 Italy 3,867
15 Turkey 1,243 Spain 2,327 Spain 3,612
16 Indonesia 1,131 Canada 2,148 Canada 3,549
17 Australia 893 Saudi
Arabia
1,582 South Korea 3,545
18 Poland 813 Australia 1,535 Saudi
Arabia
3,090
19 Argentina 720 Poland 1,415 Vietnam 2,715
20 Saudi
Arabia
686 Argentina 1,407 Argentina 2,620
The World in 2050 – Actual and Projected top 20 economies based on GDP in PPP terms
Source: World Bank – 2011 Actuals
PWC – 2030, 2050 Estimates
Understanding the external context – Big
Trends pointing towards growth…
© StrataBridge 2014
Disproportionate
& Sustainable
Growth
Growth Move Criteria:
• Favourable
demographics
• Macroeconomics
• Market ‘maturity’ –
where on the ‘curve’
• Channel dynamics
• Competitive
landscape/intensity
• Attractiveness vs.
Winability
Sources of Growth:
• Market Momentum – e.g.
Geographies/Categories/Segments with
high growth rates/potential (short-medium-
long term)
• Share Gain – e.g. win share from existing
competitors/block new competitors
• Grow Participation – e.g. expand
geographic/category participation
• Grow Total Market – e.g. innovation to grow
the total market and take the greater share
of growth
• Create options for future growth – e.g.
selective moves designed to create more
upside than downside for future growth
• M&A
Innovation Drivers and Intersections:
• Our Purpose, Proposition and Brands
• Consumer Trends, Insights and Unmet
Needs
• Technical evolution, development and
breakthroughs
• Shopper, market, trade, channel, competitor
landscape and evolution
Defining the ‘Strategic
Portfolio Role’:
• Disproportionate
Growth/Growth/Market
Entry/Maintain/Defend/Deem
phasise/Exit
• Exploit/Experiment/Explore
• Both Growth and Learning
Plotting the Routes to Growth –
e.g. Growing from the ‘Core’:
Implications across the Business:
• Connecting trends, insights and
innovation – Where to play? How to
Win? What do we need to do?
• Developing a ‘joined-up’ response
• Choices, trade-offs and
consequences – ‘optimisation of the
‘whole’
Developing your ‘Growth Map’ – Where to
Play? and How to Win?…
© StrataBridge 2014
Mindset trumps Process – Think
‘Eco-system’ not ‘system’…
What’s going-on out there (and with
you)? Big trends and growth drivers…
Adapting the decision-making ‘eco-
system’ – Both Control and Growth…
Some Structure and Thought-
Provokers…
© StrataBridge 2014
A Fundamental Conflict – The
Control ⇆ Growth Paradox…
The Pursuit of ‘Growth’
The creation of new value for customers and shareholders,
driving the need for new stuff – new products, new
services, new markets, new business models, etc. – by
definition, increasingly different from what we currently
do…
The Desire for ‘Control’
The focus on continuously tightening the grip on how we
do things today – driving predictability and productivity
by fine-tuning our knowledge of, and control over, our
existing business portfolio – products, customers,
channels, etc.
© StrataBridge 2014
The Hungry Beast and the Ugly Baby –
Protecting the New…
© Pixar Animation Studios
Originality is fragile, initially
awkward, unformed, vulnerable
and incomplete. New ideas are
‘ugly babies’ that need
nurturing in order to grow.
They have a hard time
coexisting with the ‘beast’; any
large group that needs to be fed
an uninterrupted and consistent
diet in order to function.
As a business becomes
successful an inordinate amount
of energy is directed toward
feeding the breast – protecting
what has worked so far. The
key to preventing this is
balance.
Ed Catmull Co-founder Pixar and President Disney Animation
Studios
Creativity Inc.
“
”
© StrataBridge 2014
Adapting our decision-making approach to
reflect our ‘uneven knowledge’ of the world
© StrataBridge 2014
Heuristic
Principles/
Rules of
Thumb
Mystery
Hunches/
Questions/
Paradox
Algorithm
Repeatable/
Reliable/
Formulaic
0101001110110101001
Code
Repeatable/
Reliable/
Formulaic
Automated
‘Outsourcable’
Adapting our decision-making approach to
reflect our ‘uneven knowledge’ of the world
© StrataBridge 2014
Algorithm
Repeatable/
Reliable/
Formulaic
Mystery
Hunches/
Questions/
Paradox
Heuristic
Principles/
Rules of
Thumb
Adapting our decision-making approach to
reflect our ‘uneven knowledge’ of the world
© StrataBridge 2014
Mystery
Hunches/
Questions/
Paradox
Algorithm
Repeatable/
Reliable/
Formulaic
Heuristic
Principles/
Rules of
Thumb
Adapting our decision-making approach to
reflect our ‘uneven knowledge’ of the world
© StrataBridge 2014
Heuristic
Principles/
Rules of
Thumb
Algorithm
Repeatable/
Reliable/
Formulaic
Mystery
Hunches/
Questions/
Paradox
Exploration Exploitation Experimentation
Adapting our decision-making approach to
reflect our ‘uneven knowledge’ of the world
© StrataBridge 2014
Heuristic
Principles/
Rules of
Thumb
Algorithm
Repeatable/
Reliable/
Formulaic
Mystery
Hunches/
Questions/
Paradox
Exploration Exploitation Experimentation
Adapting our decision-making approach to
reflect our ‘uneven knowledge’ of the world
© StrataBridge 2014
Valu
e
Time
Creating New Value – The Sigmoid Curve
Increasing the ‘area under the curve’
Lower
Investment
More Cash
Generated
Increased
Longevity
Later
Investment
Faster
Payback
Multiple Levers; Two
Dynamics: • Magnitude
• Timing
(Levers and dynamics
are not mutually
exclusive)
© StrataBridge 2014
Development Growth Maturity Decline
Time
Valu
e
Creating New Value – The Sigmoid Curve
Increasing the ‘area under the curve’
© StrataBridge 2014
Development Growth Maturity Decline
‘Known’
Precision/
Fine-tuning
Continuous
Improvement
Analyse Assume
Probe
Time
Valu
e
Creating New Value – The Sigmoid Curve
Increasing the ‘area under the curve’
© StrataBridge 2014
Development Growth Maturity Decline
‘Unknown’
Bets &
Options
Lead with
Hypothesis
Probe Assume Analyse
(Explore)
‘Knowing’
Learn-
by-Doing
‘Lead’
or ‘Lag’
Assume Probe Analyse
(Experiment)
‘Known’
Precision/
Fine-tuning
Continuous
Improvement
Analyse Assume
Probe
(Exploit)
~ Ditto ~
‘Growth -1
’
+
How to
profitably exit
or jump to the
next curve?
Time
Valu
e
Creating New Value – The Sigmoid Curve
Increasing the ‘area under the curve’
© StrataBridge 2014 © StrataBridge 2012
Consistency
Standardisation
Proceduralisatio
n
Change
Innovation
Experimentation
Learning, Competitive
Advantage & Results
fuelled by…
Efficiency
Productivity
Agility
Adaptability
Hierarchical
and
Centralised
Flat,
Networked and
Distributed
Performance Beliefs…
Organisational Construct
and Location of Power…
Analytical Exercise
Fixed
Destination/Direct
Route
Systemic Intervention
Overarching
Direction/Course
Correction Mechanical
Formulaic
Wanting
Answers
Organic
Dialogue-based
Asking
Questions
Data-driven
Numbers based
Insight-driven
Assumptions based
??1+2=3
Approach to Strategy…
Decision-making
Routines…
Supporting
Information Focus…
Process (People are there
to ‘enact the process’)
People (Process
provides ‘enough
structure’)
Obedience
Compliance
Competence
Creativity
Stretch
Passion
Automate the
Processes
Enable the
People
Results Driven
Through…
Talent Hired For…
Technology used to…
C
o
n
t
r
o
l
G
ro
wt
h
More Volatile
More Uncertain
New ‘Rules’
Volatile
Uncertain
Changing ‘Rules’
External Environment - Competitor, Customer, Consumer
Landscape & Behaviour - & Macro Trends
Stable
Predictable
Consistent ‘Rules’
Volatile
Uncertain
Changing ‘Rules’
External Environment - Competitor, Customer, Consumer
Landscape & Behaviour - & Macro Trends
Decision-
making
Contexts
Mindsets and
Characteristics
© StrataBridge 2014 © StrataBridge 2012 © StrataBridge 2014
C
o
n
t
r
o
l
G
ro
wt
h
Striking the ‘Right Balance’?
In general, how would you rank your
organisational DNA on the 'Control-Growth
Spectrum’?
1 2 3 4 5
More 'Control’ More 'Growth’
About right
What do you need to strike the right
balance to deliver your strategy and
desired business results?
© StrataBridge 2014
So, what’s the BIG Idea, Question and
Opportunity?
A rapidly and
continually
changing context
is opening-up
increasing
opportunities for
growth against a
backdrop of
unprecedented
change and new
risks
Many (possibly
most?) organis-
ations decision-
making processes
(particularly
‘S&OP’, ‘IBP’
etc.) have been
designed on the
(often implicit)
assumption of
‘control’
How
do we adapt
routines
we’ve refined
for operational
efficiency to
enable similar
degrees of
strategic
flexibility?
© StrataBridge 2014
Chris Turner
mobile: +44 7802 252 003
e-mail: [email protected]
web: www.stratabridge.com
… and over to Ed
32 © 2014 Steelwedge Software, Inc..
Single Line of Sight: Plan, Perform, Profit
Steelwedge Agility Webinar Series
Revenue Growth or Cost Control
July 15, 2014
33 © 2014 Steelwedge Software, Inc. Confidential.
“ Steelwedge has grown into
the market's leading S&OP
solution in the cloud. ”
Rating: Positive
Global market share leader
Offices: USA, Europe, Japan & India
Founded in 2000, 50%+ year over year growth
Global organization focused on global delivery
Cloud Based Integrated Business planning platform
100% cloud-based for rapid deployment & value realization
Steelwedge: The S&OP Company
34 © 2014 Steelwedge Software, Inc..
Pre-ESOP
Ground Reality: Trying It With Spreadsheets
Demand Planning, SCM/APS Systems
ERP, Financial, & Transactional
Systems SAP, Oracle, etc.
Industry
Data
Consolidation, Review,
Overrides
Data Collection,
Reconciliation
Consensus Process ESOP
Operations
Marketing
Sales
Finance
Manual
Complex
Security Risk
Not Scalable
What’s going on? Big Trend Visibility?
Systems Landscape
Exploring opportunities?
Decision-making eco-system?
35 © 2014 Steelwedge Software, Inc..
Change Your Reality; Drive S&OP Adoption & Values
Time
L1
L2
L3
L4
Q1 Q2 Q3
Step Change
Maturity &
Performance
Avoid Process
Failure
Q4
Val
ue
Accelerated
Time to Value
“Companies can have a hard time getting past basic levels of S&OP without
technologies like Steelwedge to support the process”
-Tim Payne
VP Supply Chain Analysis, Gartner
36 © 2014 Steelwedge Software, Inc..
Best Practice S&OP Aligns People, Process & Systems
“We continue to look at S&OP as an
aspect of business that
needs terrific improvement…
It’s hard to argue this shouldn’t be a
central piece of management software”
–Rob Kugel, Ventana Research
37 © 2014 Steelwedge Software, Inc..
S&OP Success with Steelwedge
Demand Planning, SCM/APS Systems
ERP, Financial, & Transactional
Systems SAP, Oracle, etc.
Industry
Data
Single Cross-Functional
Planning Environment
Automated Planning Prep
Interactive planning for:
• All S&OP Stakeholders
• Plan Review
• Opportunity/Risk
• Upside/Downside
• Planning Overrides
• Assumptions
• Scenarios
• Consensus Process
• Pre-S&OP
• Executive S&OP
• Audit Trail
Systems Landscape Product / Sub-Family Customer Revenue
Product / Family Territory / Region Revenue
Product / Family Promotions Revenue
Product / Family Region Units & Revenue
Product Stock Locations Units and Inventory
Family / Series Territory / Region Revenue, Margin & Cash
Family / Series / BU Geo Revenue, Margin & Cash
Product Production Site Units and Capacity
Family / Series / BU Geo Revenue, Margin & Cash
Family / Series / BU Geo Revenue, Margin & Cash
Planning Terms Stakeholders
Account Managers
Sales Managers
Marketing
Demand Planners
Supply Planners
Production Planners
Finance
Executives
Customers
Suppliers
Cross-functional Planning
Environment
38 © 2014 Steelwedge Software, Inc. Confidential.
Managing the Translation between Functions
Sales, Marketing, Product Management,
Demand Planning
Demand
Inventory, Production, Procurement and
Allocations
Supply
Profit & Loss,
Balance Sheet
Finance
Executive
Dashboards
Executive
39 © 2014 Steelwedge Software, Inc. Confidential.
Planning Dashboard
Steelwedge Enterprise Enabled Excel
Slice of view (hierarchy)
Time series of key figures
Planning data for review and
updates
Planning Views Combine Planning, Analytics in Familiar UI
Capture institutional knowledge / assumptions
40 © 2014 Steelwedge Software, Inc..
Return on Investment is Substantial and Sequential
50-70% Reduction
15-30% Improvement
20%-25% Reduction
25% Reduction in Stock-outs
1-2% Lift in Revenue 3-5% Margin Increase
Time
$5M to $10M in Committed Savings per $1B in Revenue (avg. over all customers)
41 © 2014 Steelwedge Software, Inc..
Steelwedge is a strong leader in S&OP and IBP
“Steelwedge is an ideal solution for a heterogeneous environment with multiple S&OP processes
with inputs from multiple ERP and APS technologies.”
Lora Cecere
Founder and CEO, Supply Chain Insights
“Steelwedge has grown into one of the market's leading S&OP solutions". “Steelwedge has
proven that it provides a capable and scalable Stage 3 S&OP solution suitable for global
deployments.”
Tim Payne
Research Vice President, Supply Chain Research Group, GARTNER
Steelwedge was among the highest ranked in capabilities scoring and was one of “the vendors
that were notable in portfolio strategy and portfolio benefits delivered.”
Simon Ellis
Supply Chain Practice Director, IDC
42 © 2014 Steelwedge Software, Inc. Confidential.
Crawl – Walk – Run Approach
• Key to success is incremental value
• Crawl: plan ahead with end in site
• Walk: implement single solution
• Run: measure, improve, expand
• Sprint: align, integrate, monitor
• Start with quick win as phase 1 & foundation
• Expand the roll-out adding value as you go
43 © 2014 Steelwedge Software, Inc. Confidential.
Why Steelwedge?
• Cross-functional, Collaborative Planning Solution
• Flexible, Scalable and Easy to Use
• Accelerated Time to Value
• Market’s Leading Cloud-based S&OP Solution
• 100% S&OP Focus & Best Practices
• Leverages Existing Investment in Systems