Transcript Best of the Best S&OP Conference First General Session SALES & OPERATIONS PLANNING: STRUCTURE, PROCESS, BENEFITS Panelists: Amy Mansfield Joe Shedlawski Terry Finnegan Presenter/Moderator: Tom Wallace Tom Wallace &

Best of the Best
S&OP Conference
First General Session
SALES & OPERATIONS PLANNING:
STRUCTURE, PROCESS, BENEFITS
Panelists: Amy Mansfield
Joe Shedlawski
Terry Finnegan
Presenter/Moderator: Tom Wallace
Tom Wallace & Bob Stahl
www.tfwallace.com
Amy Mansfield
V&M STAR
Production Planning Manager
V&M STAR
Vallourec & Mannesmann Tubes
•North America's leading producer of seamless casing
•Annual Capacity 500,000 metric tons finished product
•1st Executive S&OP Meeting, January 2006
Certifications: API 5CT, API 5L, OSHAS 18001, ISO 9001, ISO 14001
Products and Customers
•Oil Country Tubular Goods, Line and Standard Pipe, Coupling
Stock and Mechanical Tube
•100% Make-to-Order
•Sales Channels: 100% Distribution
•Key End Users: Devon, Exxonmobil, Chesapeake, Applied
Drilling, El Paso
Joe Shedlawski, CPIM

Wyeth Consumer Healthcare

Principal, Commercial Operations

Past President of APICS (2007)
Wyeth Consumer Healthcare
•Headquartered in Madison, NJ
•Global marketer and manufacturer of over-the-counter health
care products-analgesics, nutritionals, respiratory, topicals
•$2.7 Billion global sales
•First Sales and Operations Planning implementation-1992Lederle Consumer Healthcare-led by Joe Shedlawski
•One of the world’s top 5 consumer healthcare companies
with several top market share brands
Products and Customers
•Major Products: Advil, Alavert, Caltrate, Centrum, Chapstick,
Dimetapp, Robitussin
•70% Make-to-Stock
•30% Promotional Pack or Custom Display
•Key Customers:
Wal-mart, Walgreens,CVS, Costco, Target, Rite Aid, Kroger
(Sales Channel: Distribution Centers
Terry Finnegan
ImagePoint
Senior Business Manager
ImagePoint
•Largest provider of retail exterior image products and services
•Headquarters in Knoxville, TN
•Production facilities in Florence, KY and Columbia, SC
•$200M in annual sales
•Started ES&OP May 2007
Products and Customers
•Products: signs, lettersets, electronic message centers,
fascia systems, menuboards
building elements,
•Services: surveys, installation, maintenance, project
conceptual art, and engineering
management,
•100% Make-to-Order
•Key customers: McDonalds, GM, Honda, Nissan, Ford, Chrysler, Lexus, Chase,
Wachovia, Wells Fargo, Rite Aid, Fed. Express, Sunoco
•Sales channels: direct to Corporate clients
The Four Fundamentals
Volume
Supply
Demand
Mix
Tom Wallace & Bob Stahl
•How Much?
•Rates
•The Big Picture
•Product Families
•Strategy/Policy/Risk
•Monthly/18 Months+
•Top Management
•Which Ones?
•Timing/Sequence
•The Details
•Individual Products,
SKUS, Customer Orders
•Tactics/Execution
•Weekly/Daily 1-3 Mos
•Middle Management
www.tfwallace.com
The Old Terminology
Sales &
Operations Planning
Volume
Demand Planning/ Demand
Forecasting
Supply
Supply (Capacity)
Planning
Mix
Tom Wallace & Bob Stahl
www.tfwallace.com
Sales & Operations Planning
“Morphed” Terminology
Sales &
Operations Planning
Volume
Demand Planning/ Demand
Forecasting
Supply
Supply (Capacity)
Planning
Mix
Master Scheduling
Supplier and Plant Scheduling
Distribution Scheduling
Tom Wallace & Bob Stahl
www.tfwallace.com
Sales & Operations Planning
“Morphed” Terminology
Sales &
Operations Planning
Volume
Demand Planning/ Demand
Forecasting
Supply
Supply (Capacity)
Planning
Mix
Master Scheduling
Supplier and Plant Scheduling
Distribution Scheduling
Tom Wallace & Bob Stahl
www.tfwallace.com
Sales & Operations Planning
“Morphed” Terminology
Sales &
Operations Planning
Volume
Demand Planning/ Demand
Forecasting
Supply
Supply (Capacity)
Planning
Mix
Master Scheduling
Supplier and Plant Scheduling
Distribution Scheduling
Tom Wallace & Bob Stahl
www.tfwallace.com
Sales & Operations Planning
Sales &
Operations Planning
Volume
Demand Planning/ Demand
Forecasting
Supply
Supply (Capacity)
Planning
Mix
Master Scheduling
Supplier and Plant Scheduling
Distribution Scheduling
Tom Wallace & Bob Stahl
www.tfwallace.com
Sales & Operations Planning
New Terminology
????????
Volume
Demand Planning/
Forecasting
Demand
Supply
Supply (Capacity)
Planning
Mix
Master Scheduling
Supplier and Plant Scheduling
Distribution Scheduling
Tom Wallace & Bob Stahl
www.tfwallace.com
Sales & Operations Planning
New Terminology
Executive S&OP
Volume
Demand Planning/
Forecasting
Demand
Supply
Supply (Capacity)
Planning
Mix
Master Scheduling
Supplier and Plant Scheduling
Distribution Scheduling
Tom Wallace & Bob Stahl
www.tfwallace.com
The 5-Step Executive S&OP Process
Step 5
Exec
Meeting
Decisions &
Updated
Game Plan
Step 4
PreMeeting
Step 3
Supply
Planning
Step 2
Demand
Planning
Step 1
Data
Gathering
Tom Wallace & Bob Stahl
www.tfwallace.com
Conference Pointer
The Five-Step Process
Dean Smetana, VP, Sanford/Sharpie
Bill Zimmerman, Manager, Sanford/Sharpie
10:00 Thursday – Level I
Tom Wallace & Bob Stahl
www.tfwallace.com
The 5-Step Executive S&OP Process
Step 2
Demand
Planning
Management Forecast
1st-pass spreadsheets
Step 1
Data
Gathering
Actual
Demand, Supply,
Inventory, & Backlog +
Statistical Forecasts
and Worksheets
Tom Wallace & Bob Stahl
www.tfwallace.com
Conference Pointer
Forecasting and
Demand Planning
Scott Harrison, VP, Valor Brands
11:10 Thursday – Level I
Tom Wallace & Bob Stahl
www.tfwallace.com
Conference Pointer
The Demand Management Game
Robert Burrows, Principal, On-Point Group
9:45 Friday– Level I
(double session)
Tom Wallace & Bob Stahl
www.tfwallace.com
The 5-Step Executive S&OP Process
Step 3
Supply
Planning
Resource Requirements Plan
Capacity Constraints
2nd-pass spreadsheets
Step 2
Demand
Planning
Management Forecast
1st-pass spreadsheets
Step 1
Data
Gathering
Actual
Demand, Supply,
Inventory, & Backlog +
Statistical Forecasts
and Worksheets
Tom Wallace & Bob Stahl
www.tfwallace.com
Conference Pointer
Supply Planning
Joe Shedlawski, Principal, Wyeth
2:15 Thursday – Level I
Tom Wallace & Bob Stahl
www.tfwallace.com
The 5-Step Executive S&OP Process
Decisions &
Updated
Game Plan
Step 5
Exec
Meeting
Step 4
PreMeeting
Step 3
Supply
Planning
Decisions,
Recommendations,
Scenarios, & Agenda
for Exec Meeting
Resource Requirements Plan
Capacity Constraints
2nd-pass spreadsheets
Step 2
Demand
Planning
Management Forecast
1st-pass spreadsheets
Step 1
Data
Gathering
Actual
Demand, Supply,
Inventory, & Backlog +
Statistical Forecasts
and Worksheets
End of Month
Tom Wallace & Bob Stahl
www.tfwallace.com
Conference Pointer
How to Conduct the
Pre-Meeting and Exec Meeting
Brian Harlan, Director
Johnsonville Sausage
3:45 Thursday – Level I
Tom Wallace & Bob Stahl
www.tfwallace.com
Conference Pointer
Obtaining Top Management
Commitment and Participation
Terry Finnegan, Senior Business Manager
ImagePoint
10:00 Thursday – Level II
Tom Wallace & Bob Stahl
www.tfwallace.com
Conference Pointer
Resolving Conflict and
Building Consensus
John Gallucci, Director, Gerber
11:10 Thursday – Level II
Tom Wallace & Bob Stahl
www.tfwallace.com
The 5-Step Executive S&OP Process
Decisions &
Updated
Game Plan
Step 5
Exec
Meeting
Step 4
PreMeeting
Step 3
Supply
Planning
Decisions,
Recommendations,
Scenarios, & Agenda
for Exec Meeting
Resource Requirements Plan
Capacity Constraints
2nd-pass spreadsheets
Step 2
Demand
Planning
Management Forecast
1st-pass spreadsheets
Step 1
Data
Gathering
Actual
Demand, Supply,
Inventory, & Backlog +
Statistical Forecasts
and Worksheets
End of Month
Tom Wallace & Bob Stahl
www.tfwallace.com
Question for Panelists
Your Process:
Same?
Different?
Hardest Part?
Tom Wallace & Bob Stahl
www.tfwallace.com
Executive S&OP . . .
• Is an executive decision-making process
• Balances demand and supply
• Deals with volume in both units and $$$
• Ties operational plans to financial plans:
one set of numbers
Tom Wallace & Bob Stahl
www.tfwallace.com
Conference Pointer
Working with One Set of Numbers
Amy Mansfield, Manager, V&M Star
Melissa Takas, Financial Analyst, V&M Star
3:45 Thursday – Level II
Tom Wallace & Bob Stahl
www.tfwallace.com
Executive S&OP . . .
• Is an executive decision-making process
• Balances demand and supply
• Deals with volume in both units and $$$
• Ties operational plans to financial plans:
one set of numbers
• Is the forum for setting relevant strategy
and policy regarding demand and supply
Tom Wallace & Bob Stahl
www.tfwallace.com
Question for Panelists
What role does Top Management
play in this process at your
company?
Tom Wallace & Bob Stahl
www.tfwallace.com
Hard Benefits
• Customer Service
• Plant Productivity
• Inventory
• Obsolescence
• Freight Costs
• Order Lead Times
• Supplier Lead Times
• Time to Launch New Products
Tom Wallace & Bob Stahl
UP
UP
DOWN
DOWN
DOWN
DOWN
DOWN
DOWN
www.tfwallace.com
Conference Pointer
S&OP Support for
New Product Launch
Craig Faulkner, S&OP, W. L. Gore
9:45 Friday – Level II
Tom Wallace & Bob Stahl
www.tfwallace.com
Soft Benefits
•
•
•
•
•
•
•
Enhanced Teamwork
Structured Communications
Better Decisions with Less Effort and Time
Better $$$ Plans with Less Effort and Time
Greater Accountability
Greater Control
Window into the Future
Top Management’s Handle on the Business
Tom Wallace & Bob Stahl
www.tfwallace.com
Question for Panelists
Biggest Benefits:
Hard
Soft
Tom Wallace & Bob Stahl
www.tfwallace.com
Question for Panelists
Implementation:
How Long?
Costs?
Toughest Part?
Tom Wallace & Bob Stahl
www.tfwallace.com
Conference Pointer
How to Implement S&OP
Successfully
Rick Hall, VP, Homac/Thomas & Betts
Bob Stahl, President, R.A. Stahl & Co
8:30 Friday– Level I
Tom Wallace & Bob Stahl
www.tfwallace.com
The Global Challenge
“We are a series of organizations doing
business locally, with intense global
coordination.” –
Percy Barnevik
Former CEO
ABB
Executive S&OP should support
these dual objectives.
Tom Wallace & Bob Stahl
www.tfwallace.com
Conference Pointer
S&OP in a Global Business
Alan L. Milliken, Manager, BASF
8:30 Friday– Level II
Tom Wallace & Bob Stahl
www.tfwallace.com
The Future of Executive S&OP:
Growth Factors
• Success breeds success
Tom Wallace & Bob Stahl
www.tfwallace.com
Adoption of New Processes
There is a 15-25 year lag between the
development of a new process and its
widespread adoption.
Examples: MRPII/ERP, TQM/6SIGMA, JIT/LEAN
Executive S&OP Today
Tom Wallace & Bob Stahl
“The word
gets around.”
www.tfwallace.com
The Future of Executive S&OP:
Growth Factors
• Success breeds success
• Lean Manufacturing and S&OP
Tom Wallace & Bob Stahl
www.tfwallace.com
Toyota:
The Lean “Poster Child”
At Toyota, production is
pushed into  Fin Goods Inv
(~ $2-3 Billion)
In many companies, production is
pulled by  Customer Demand
In balancing demand and supply,
many companies have a tougher job
than Toyota.
Their solution: Executive S&OP.
Tom Wallace & Bob Stahl
www.tfwallace.com
Conference Pointer
S&OP and Lean Manufacturing
Jeff Greer, VP, KVH Industries
2:15 Thursday – Level II
Tom Wallace & Bob Stahl
www.tfwallace.com
The Future of Executive S&OP:
Growth Factors
•
•
•
•
•
Success breeds success
Lean Manufacturing and S&OP
Globalization
New users outside traditional manufacturing
S&OP specific software
Tom Wallace & Bob Stahl
www.tfwallace.com
Conference Pointer
Technology as an S&OP Enabler
Larry Lapide, Director, MIT
10:55 Friday– Level II
Tom Wallace & Bob Stahl
www.tfwallace.com
The Future of Executive S&OP:
Growth Factors
•
•
•
•
•
•
•
Success breeds success
Lean Manufacturing and S&OP
Globalization
New users outside traditional manufacturing
S&OP specific software
Greater financial integration, power and utility
A highly visible presence
in the executive suite
Tom Wallace & Bob Stahl
www.tfwallace.com
My Prediction
“Over the next 10 years, Executive S&OP
will emerge as a primary tool in the Top
Management tool kit.
“It will be widely viewed as indispensable
for organizations needing to balance
demand and supply in a complex, rapidly
changing environment.”
Tom Wallace
Chicago
June 19, 2008
Tom Wallace & Bob Stahl
www.tfwallace.com
Thanks for Listening
To get copies of slides:
www.tfwallace.com/resources
will be up by Monday morning
Tom Wallace & Bob Stahl
www.tfwallace.com