Transcript Sales and Operations Planning Sustaining Performance after Implementation Brad McCollum Ned Finch Sr. Manager, Materials Planning and Logistics SVP, Global Supply Chain & Lifoam Operations Agenda • • • • • • Introductions A little about Jarden.

Sales and Operations Planning
Sustaining Performance after
Implementation
Brad McCollum
Ned Finch
Sr. Manager, Materials Planning and
Logistics
SVP, Global Supply Chain & Lifoam
Operations
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Agenda
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Introductions
A little about Jarden and Jarden Home Brands
The History of Our S&OP
Symptoms of a Degrading Process
Keys to Maintaining Quality
Questions
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Jarden: The brands of everyday life
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Jarden: The brands of everyday life
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Jarden: The brands of everyday life
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Functional Structure - 4 Business Units
Casual Entertaining
Fresh Preserving
2009
Firelogs
Recreational
Products
2010
2011
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OUR SUCCESS
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Demand: Market Facing Families…
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2003-2007: Family Level Demand
Normal Mfg
Capacity
Max Mfg
Capacity
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Probably
Notyear…
Just another
2008
2nd Lowest
JUN in 6
Yrs
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The Results…
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Significant Increase in Sales
2009
ES&OP
Kick-Off
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Reduced Cancellations due to Product Availability
Before S&OP
After S&OP
~ 50%
Reduction with
Significantly
Higher Sales
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Significant Cultural Benefits
 Alignment of Human Energy
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Elimination of the silos
Cross Functional Education
 Dials are Connected
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Tactical Execution of Strategic Plans
Risks Decisions are Made at Right Levels
 Inclusive Business Management
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S&OP Team Owned the Sales Forecast
S&OP Team Owned the Production Plan
S&OP Team Owned the Process and Deliverables to the Exec Team
 Conflict Resolution
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S&OP Requires Conflict, but also Provides a Forum and Process to Management it
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The Challenge…
Sustaining that Performance over time…
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Where problems occurred…
Exec S&OP
Meeting
Integration
Supply
Recommend
ations
Demand
Alignment
Month End
Data
Gathering
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Cracks in our Foundation
 Data Conversion Issues
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New Items improperly equalized
Items Missed/Not Maintained
 Late Deliverables
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Sliding Dates
Expanding Calendars (“I just need more time”)
 Changes Occur without Confirmation
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Tool Formats Change
Sources Change
Horizon Change
 Quality Issues Creep into Process
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Loss of Confidence in Supporting Data
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The Solution
 Continuous Quality Assurance
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Deliverables should be checked every cycle prior to their entry into the
process
Track Changes Cycle over Cycle
 Corrective Actions have to be Immediate and with Priority
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Remember that this Data supports business critical decisions
 Drive Ways to Make this Process Bullet Proof
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Eliminate sources of error
 Maintain a Path for Confirming Process Change
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Better and more efficient ways are expected as part of the process, but still
need to be confirmed by the team
 Keep up with Adjacent Changes
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S&OP support needs to be part of adjacent systems design/change
considerations
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Where the problems occurred…
Exec S&OP
Meeting
Integration
Supply
Response
Demand
Alignment
Month End
Data
Alignment
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The Fundamentals of Demand Alignment
Customer
Demand
Alignment
Reconciliation of Opposing Views
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Shortening Horizon
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Months
Time
MIX
VOLUME
Volume/Marketing Call
Consensus
Demand
Reconciliation
Planning Time Fence
Sales Call
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Loss of Top Down Perspective
THEORIES
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Bias and Error
BIAS
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Other Symptoms
 Demand Alignment Meetings become shorter and shorter
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The Reconciliation of Opposing Perspectives requires debate
 Demand Alignment Meetings Attendance Suffers
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Key players begin to decline/no show
 BIAS Becomes Apparent
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Prolonged Bias Results and becomes difficult to address
Supply begins taking bias into consideration
 Eventually Real Alignment isn’t really happening
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Error Increases without the value of the discussions required to gain alignment
The value and importance of Alignment erodes
Demand Team Members disconnect from the process and if deliverable
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The Solution
 Never Loose the Three Legs
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Retain Rigor around bottom up forecast within the Planning Time Fence
Top down is more art than science – It is the quantification of theories that are
relevant to the category
 Don’t let up on basis Meeting Management
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Attendance
QA of Deliverables
 Track and Monitor Bias and Error
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Improvement should be the basis for comparison
 Set and Pursue Continuous
Improvement Goals
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Exec S&OP
Meeting
Integration
Supply
Response
Demand
Alignment
Month End
Data
Alignment
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Reasonable Assumptions Change
Product Groupings:
Design Objectives:
Market Facing
Product Families
Highest level possible based on
agreed upon market drivers
Reasonable
Assumptions
Proven Assumptions that allow
demand to be applied to supply
groupings
Supply Grouping
Grouped based on how
capacities are constrained
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Monitors Get Lost
Run Charts for each Split
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Capacities and Productivity Change
WC1
WC2
WC3
Capacity Grouping
WC4
WC5
WCN
Individual Capacities - Scheduled
Rough-Cut Capacity
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The Solution
 Rigor Around Supporting Monitors
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Make Run Charts part of the regular Meeting (i.e. Assumption Models)
Pursue Ways to Bullet Proof and Automate Monitors
 Educate New Players on the Key Behind the Scenes Controls
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As your models Mature, these Monitors/Controls become more complicated
and difficult to hand-off/transfer to other resources
 Aggressively Pursue Outliers/Bias
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These assumptions are fundamental to your results
 Monitor Adjacent Projects Impacts to S&OP Assumptions
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Acquisitions
Plant/Capacity Modifications and Improvements
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The Results
Exec S&OP
Meeting
Integration
Supply
Response
Demand
Alignment
Month End
Data
Alignment
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Upstream Issues Create…
 Last Minute Iterations before Integration and Executive Meetings
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Last Minute Errors Found
Financial Integration show something totally off
 Integration Meeting Content gives way to Reconciliation and Error
checking instead of Substantive Discussion
 Integration Meeting Attendance Dwindles
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Same people you had in Supply Meetings
 People Unwilling/Unable to Defend Perspective
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Inconsistent perspectives exist
Backroom Discussions/Decisions
 Ultimately, ES&OP Meeting Attendance Dwindles
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Benefits begin to un-ravel
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Summary
 Be vigilant with 1st Pass Quality with deliverables
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Cracks in the Foundation damage the rest of the house
Don’t let the details fall to the way side…
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RUN CHARTS to understand when change is occurring
 Continuous Continuous Improvement
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It really does take constant pressure
 Survey Regularly
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Flag for degrading processes
Everyone is responsible for pointing out the need for corrective actions
 Watch and Track Attendance
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When attendance dwindles...something is wrong
 Don’t Expect New Team Members to Just “Get it”
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Onboard S&OP Participants and New Executive Team Members to the Process is
CRITICAL
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S&OP is Never Ending Continuous Improvement
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Questions?
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