Case in point comes from the July 6, 2009 Wall Street Journal article (http://online.wsj.com/article/SB124683295589397615.html) by Cari Tuna which provides an overview of the key plan options presented at JDSU and the likely impacts of each plan:

“Each spring, executives at JDS Uniphase Corp. plan for three potential sales scenarios for the coming fiscal year, which begins in July. Last year, rattled by financial-market turmoil, they included an extremely pessimistic sales outlook and outlined potential cost cuts….The experience highlights the value of scenario planning, or preparing responses to imagined changes in conditions.

“It’s not about predicting the future,” says Peter Schwartz, a partner at Monitor Group, a Cambridge, Mass., consulting firm. “Scenario planning is a tool for learning” and making better decisions.”

Steelwedge is proud of its role as the acknowledged leading provider of software-as-aservice solutions to enable complex scenario planning.  The Steelwedge Sales and Operations Planning (S&OP) is unique in its power, flexiblity, and low cost.  Its ability to model top-down, middle-out, bottom up price, cost, demand and supply changes is at the center of this approach.

1. For the first time in the history of S&OP - thanks to cloud computing and other technologies - it is possible for companies to implement and adopt this mission-critical process in a timely manner.   The evolution of ERP, CRM and SCM solutions coupled with improved data stores, data integration tools and user sophistication has further driven this growth.

2. The cloud computing approach and the advent of highly specialised S&OP applications means that business users no longer need to rely on weighty IT support to drive their S&OP process.  In the past, business users were dependent on internal IT organizations with long lists of competing priorities, disparate platform standards,  long capiital budgeting cycles, and limited bandwidth to support such initiatives.  Today, thanks to cloud computing and improved integration tools, it is possible to implement an S&OP system in the time it used to take just to order the hardware - as little as 10 to 12 weeks.

3. Oversupply and unpredictable demand in today’s economy coupled with staff shortages are making it more imperative than ever to improve, reduce the latency, and automate the process.  If in past years the focus was on supply deliver, today the focus is on tightly matching supply against demand.

4. The high cost and limited availability of credit have put new pressures on working capital and therefore inventory management.  The need for more effective inventory management coupled with volatilty in demand make S&OP an essential process for corporate success.

And so, the list of reasons why S&OP has become so hot grows daily.  What other items would  you add?

Chris Chiappinelli, a blogger associated with the Managing Automation Blog offers the following :

“Just in Time, in its purest form, is a thing of beauty. Read Toyota’s description of it on their website — it sounds like poetry in motion. But the marketplace doesn’t care for poetry. We don’t want to place our order and watch the gears — perfectly meshed though they may be — smoothly churn out our product. We want our hamburgers pre-cooked and waiting for us under a heat lamp. In that world, Just-in-Time has no place. It’s a museum piece, a relic of a more patient era. In this world of pre-heated hamburgers and mass customization, Toyota and its counterparts are forced to produce not to actual demand, but to expected demand. And that, my friends, not only belies JIT; it creates a huge amount of risk.”

“A New York Times article illustrates just how far from its roots Toyota strayed:Previously, plants operated under the sales force’s direction of “you make them, we will sell them,” said Real C. Tanguay, president of Toyota Motor Manufacturing Canada. Now the philosophy is, “if we can sell them, then you will make them,” he said.”  “Oh, how the mighty have fallen. Who would have predicted that a Toyota executive would ever sum up the company’s philosophy as, “You make them, we will sell them”?”

__________________

Steelwedge enables customers to better understand and anticipate demand through forecasting, collaborative engagement of field sales, and analysis of changes in sales pipeline opportunities.  In today’s world, these are vital processes.

Many corporations are turning to S&OP to create value by improving financial and operational performance through better alignment of supply and demand. However, the majority applications that claim to be “S&OP” solutions (e.g. excel, demand planning, supply planning, business intelligence…), where designed as “building blocks” to solve only a subset of the S&OP problem. S&OP “building blocks” are critical functions for an effective S&OP solution, however, they where not architected and designed to leverage the full value resulting from a fully technology enabled Executive S&OP process.

To achieve the full benefits of S&OP, a convergence of multiple capabilities within a technology platform is required to enable the process including:

1. Centralized Database
2. Info Bridge
3. Multi-Level Planning
4. Multi-User Collaboration Model
5. Flexible Business Rules & Formulas
6. Workflow
7. Performance Management

The Steelwedge OnDemand Executive S&OP solution was designed with a 100% focus on S&OP. It was architected and designed to specifically meet the requirements of an Executive S&OP solution. The Steelwedge OnDemand Executive S&OP solution is built on an enterprise class three-tiered Java platform that embraces the seven key capabilities identified above.

]]> http://www.steelwedge.com/blog/creating-value-through-purpose-built-sop-technology.html/feed http://www.steelwedge.com/blog/creating-value-through-purpose-built-sop-technology.html http://feedproxy.google.com/~r/SteelwedgeSoftware/~3/5c35-rJWHYk/sop-the-need-for-automation.html http://www.steelwedge.com/blog/sop-the-need-for-automation.html#comments Mon, 11 May 2009 17:24:14 +0000 Glen Margolis, Founder & CEO http://www.steelwedge.com/blog/?p=297 S&OP continues to gain visibility among global manufacturing companies as a key process to drive improvements in revenue, profitability, customer service and competitive advantage.  Unfortunately, many companies are confused about what it is and where it fits.  Executive S&OP is focused on the medium to long term planning horizon based on product family volume versus SKU level unit mix. Engaging executive management in a monthly review for a 1-2 hour meeting requires a more aggregate level of planning to drive strategic level decisions around balancing supply and demand.

The types of decisions addressed in Executive S&OP are as follows:

– How much to increase or decrease plant capacity Should we add or delete operational shifts?
– Do we need to pursue alternative global sources of capacity?
– Does our pre-build inventory strategy support our needs looking out 3 quarters?
– What is the best timing for a major new product introduction?
– How does reducing our capacity by 25% impact Revenue and Margin?

Is it practical for executives to log onto an SAP or Oracle ERP, CRM, Demand Planning, Supply Chain Planning, or Business Intelligence application to get answers to the above questions? Do these applications provide the appropriate level of detail in one solution to support strategic level decisions?

Most enterprises do not have a single application with the appropriate level of detail to support Executive S&OP. The primary application used to support the process is desktop Excel, which has many short comings including: manual data consolidation, lack of security, limited version control…

Steelwedge Software (www.steelwedge.com) is purpose-built for Executive S&OP.  The application is designed to consolidate data from multiple applications and provide multi-level aggregate views needed for cross functional collaboration and Executive level decisions.  Companies that implement Steelwedge have a single application with built in workflow, user security, catalog management, excel user interface, and performance management.yes;”>While Executive S&OP has existed as a concept for many decades, for today’s complex, data-rich, highly collaborative global organizations, application-driven Executive S&OP is no longer a luxury but rather a necessity.