Category: Sales and Operations Planning

Investing In Enterprise Technology for S&OP Process

The world has changed. Very soon, the days when managing enterprise applications was considered cumbersome would become a thing of the past. Big Data, Cloud, Social Analytics etc. have changed the paradigm in which enterprise applications work.  Today CIOs and IT managers are using mobile apps to increase organizational and business process efficiency. SAP, one of the biggest players in the world of enterprise applications have taken a positive step in this regard by incorporating faster technology designed for user-centric applications, rather than traditional applications which require years of experience to master. With onset of its solutions for sales and Operations planning process for global supply chains, SAP is ready to change the world of enterprise applications.

But what happens to the installed base of current SAP customers, particularly those using its existing supply chain solutions?  SAP has solutions in all areas of business you can think of – Demand Management, Supply Planning, Inventory & Service Level Optimization, Collaborative Response Management, Manufacturing, Transportation Management, Warehouse Management, and Service Parts Management as well as Supply Chain Monitoring processes. Should customers of these products think of shelving their IT investments so far (which may range anywhere in millions of dollars, depending on the size of the company) and spend more on the new solutions (which again will range in millions of dollars, depending on the size of the company)

Investing in enterprise applications is very much like investing in stock market – One needs to undertake comprehensive analysis before making a buy decision and once a buy decision is made, one wants as much returns as possible. However it is much more difficult to take a sell decision – (No longer use an enterprise technology) – for the simple reason that the amount of efforts invested in technology implementations are humongous and more so in getting that technology up and running for day to day business. On an average it takes around 3-4 years for any technology implementation to stabilize and provide substantial returns. Once the technology is stabilized, it is very difficult to change it as it calls for changing the way people do their daily jobs. In fact investing in new enterprise technology is not an easy riddle to solve

So then, what should one do? I may not be able to advise you on that, but what I can tell you is what you should have been doing – “Maximizing returns from existing supply chain investments, while you craft a transition roadmap for the future technologies

Taking a particular case of SAP SCM application (SAP APO) as example – It is one of the most powerful supply chain planning engines available in the market but still I have seen customers not being able to make the full use of its capabilities. In most cases, it’s a poor system design leading to sub-optimal use of product capabilities and lower than expected returns/results. I have seen from my experience, how a good system design implementation can lead to drive up revenues, streamline processes and also drive up morale of the users J

I was recently involved in developing design for enabling S&OP process using SAP APO. With respect to sales and operations planning process, my focus was on following major areas

  1. Increase in user adoption with easy to use interfaces
  2. Better consolidation of planning results, KPI tracking and process adherence
  3. More planning simulations with automated alerts
  4. Email notifications and Sharing comments/qualitative information to keep all the users informed.

For existing SAP APO customer, if the value of the products can be fully realized, it will lead to a more granular and comprehensive integrated capability that converges planning and execution.  The top 3 Value Add Provided by APO for Enabling S&OP process are

  1. Very Robust Integration with SAP Execution system and BI systems
  1. Capability to Drive Execution
  1. Powerful Demand and Supply Planning Algorithms and Support for a variety of business situations

Other aspects of a good S&OP process e.g.  – Simulations, scenario comparison, analytics etc. can be covered by a good system design and using less costly APO Add-on solutions. However if nature of businesses is such that it need faster platforms with the latest state of the art planning algorithms, Then it will be better to look out into the market on what suits best.  Thus I feel it is extremely important for businesses today to assess the current design’s ability to meet the changing business requirements and then take well informed decision. They may be able to get small incremental returns from existing investments with less risk or can have breakthrough returns for the dynamic business with some challenges. Take your pick!

Real-Time Analysis Of Demand, Supply Chain And Financial Data At Granular Levels

As an organization, you need to review on a consistent basis, your demand trends, supply and the resulting financial impact. Evaluate multiple planning scenarios and analyze the impact on revenue, margin and volume. You need to ensure that your plans are in alignment with the overall business objectives. In short, you need a single operating plan to identify the allocation of your resources, time and money.

Complex supply chains coupled with increasingly volatile demand, necessitate a level-by-level synchronization of demand and supply for your organization to promptly respond to demand fluctuations.

SAP Sales and Operations Planning (S&OP) includes your various business areas like Sales, Marketing, Finance, Demand Planning, and Supply Chain Planning on a monthly basis and aims at optimally and profitably meeting long-term future demand. The solution enables companies to develop tactical plans and align the tactical plans developed by each of the business areas. SAP S&OP leverages HANA and delivers a cloud based platform to enable your organization’s key stakeholders to collaborate effectively and integrate the planning process aligning demand and supply.

Bristlecone aims at providing rapid and actionable insights for your logistics, manufacturing and procurement processes, analyzing the pulse of your customer demands with its implementation of SAP S&OP.  The implementation enables you to collaborate all your departments and arrive at a consensus plan, resulting in better agility and faster reactions to changes in demand. You can gauge the impact of changes on the plans across all departments improving the planning efficiency.

Bristlecone’s implementation of SAP S&OP provides:

  • Unified data model enabling planning and real-time analysis of demand, supply chain and financial data at any level of granularity and dimension
  • Rapid, interactive simulation and scenario analysis, using the full S&OP data model to support demand-supply balancing decisions
  • Embedded, context-aware social collaboration, enabling rapid planning and decision-making across the organization

Our unique and complete out-of-box model comes with real-time financial, demand and supply-chain calculators. The calculations are reconfigurable via modern HTML 5 Web-UI and scalable with lower-level product information. It also has attribute-based aggregation and disaggregation to serve the needs of all S&OP roles.

Webinar on Hi-tech and Semiconductor Sales and Operations Planning – Part 2

The high tech and semiconductor industry is a rapidly growing area, and serves as the foundation for the increasingly data driven global businesses. From state-of-the-art computing systems, to data arrays spread over acres of land, there is very little in the field of modern technology that the Hi-tech and Semiconductor industry does not directly or indirectly power.

In order to implement sales and operation planning in an industry like hi-tech and semiconductor, one must first understand the characteristics that are used to define it. Hi-tech and semiconductor is primarily defined by short product life cycles, and supply chains that pan out all over the globe and are often complex, circuitous and geographically diverse. The diversity of the process makes it susceptible to issues like complicated tax structures, overtly long lead times, and high product proliferation. Other common factors that need to be tackled are long shipping distances and highly complicated logistics in the event of product recall.

There are several challenges that the industry presents for S&OP. Fluctuating customer demands, and rapidly changing consumer demographics are some of the biggest challenges that a supply chain vendor will have to overcome when creating an effective supply chain for the business. The decline in the revenue that each product generates for the company is another factor that needs to be put under consideration, and forces the use of technologies that are highly cost effective and flexible. The industry is also plagued by a rate of product obsolescence that is almost unique to this sector. Companies are always in the race to launch new products, and hence even the relatively newer models get outdated very quickly. These challenges need to be carefully evaluated and addressed when implementing S&OP. 

Gartner S&OP Maturity Model

Defining process maturity is a basic step that needs to be tackled upfront. From strategy to implementation, a good supply chain vendor ensures value every step of the way. The development of a process plan, matching it with the needs of the client, a profitability analysis and final orchestration needs to run in parallel to the technological aspects of supply chain implementation. Gartner has a handy plan of action that solves a lot of dilemmas that the industry presents to supply chain vendors. This process needs to be refined further and the industry specific challenges need to be addressed in order to achieve enhanced efficiency and value.

The best practices in S&OP should be aligned with the underlying building blocks – Process, Product, People, and Technology. Well defined processes help to balance and support S&OP Goals. Also, the product supply, demand, financial and product lifecycle information must be fully integrated into S&OP. To address the people factor, Change Management is a critical element. Also, S&OP roles must be identified upfront such that people understand what is needed from them. And finally, a good technology platform can be a process booster. After all, the best people and process can perform better with the help of enabling technologies. 

S&OP Building Blocks

The technology decides whether the supply chain will be profitable or not. There is no room for error, and the supply chain vendor needs to be in a position to anticipate change and respond swiftly to it.  Multi user platforms that allow seamless collaboration, and some equipped with simulation capabilities are an obvious requirement. The supply chain also needs to emulate product hierarchy and allow for easy conversion between units and currencies. The more closely integrated the technology is with S&OP, the better results it will yield.

Enabling efficient S&OP for a company is a process that is always underway. One must never confuse it with monthly meetings and impromptu brainstorming sessions that end up with productive ideas and provide definite results. Intermediate and long term goals for S&OP need to be well defined and clear to every stakeholder.


S&OP provides full network visibility throughout the supply chain. Through the creation of responsive supply chains that are demand driven and provide the maximum efficiency, S&OP is able to offer companies more accurate forecasts that allow them time to reduce inventory. The advantages that S&OP offers the business, like improved customer service, plant productivity and future visibility, decreased obsolescence and the lead time for order as well as supplier, make the investment valuable, and the leading reason why more and more businesses working in the Hi Tech and Semiconductor industry are opting for it.

Webinar on Hi-tech and Semiconductor Sales and Operations Planning

Would you like to know some of the typical characteristics of High Tech and Semiconductor Industries? Would you like to discuss the key S&OP challenges in these industries? How would you define process maturity in these industries and is there a framework to do so? What role does technology play here? And most importantly, what are the steps you can take to enable a more mature S&OP process in your organization?

Well, good news for you! We have a webinar planned for the 11th of June from 10 AM PDT to 11 AM PDT which will help address all these questions. The webinar will focus on effectively enabling S&OP in High Tech and Semiconductor Industries and will be presented by none other than our expert Saroj Tripathi, Director, Global Solutions Enablement at Bristlecone. With a decade plus experience in supply chain consulting, he is proficient in supply chain strategies, transformations, business process definitions, sales and operations planning, facilitating analytics, etc.

Though it has been around for decades, the S&OP process is increasingly gaining importance as a tool for competitive advantage, improving responsiveness and resilience of supply chains. And as with any process, an effective and comprehensive deployment of S&OP depends on the technology in use. Join us for the webinar and learn in-depth business insights about S&OP.

To register for the webinar, click here.

Lean principles and S&OP – Do they belong together?

S&OP and Lean are fundamentally different processes. Lean is an internally focused process, with emphasis on how the manufacturing department produces the goods; whereas S&OP is outward looking with focus on customers and markets.

So, do companies working on Lean principles need an S&OP process in place? The answer is an emphatic yes; simply because these two concepts complement each other. And in the words of Tom Wallace, “Lean and S&OP work best when they work together”.

Lean aims to create pulls based on customer demands, which requires the value stream and supply chain to be in sync – albeit in advance. Being focused on execution in short-term, Lean cannot predict long-term volume fluctuations, and thus its impact on capacity. This is where S&OP bridges the gap. It ensures that capacity is upgraded based on any future demand upturns, since it is by nature a mid to long-term process.

S&OP coupled with rough cut capacity planning and resource requirement planning can predict upswings and/or downswings of capacity based on demand forecasting. Additionally, S&OP brings the demand and supply planning teams together, which in the long run is required to drive Lean goals better. S&OP looks at both directions of supply chain, and it is this holistic view which complements a Lean implementation, since Lean typically only looks at supplier schedules.

A common integration technique for S&OP and Lean could be to include Lean metrics like takt time, cycle time, and costs in the executive S&OP process.

Another way to make them work together is to align the product family categorization of Lean and S&OP.

Both Lean and S&OP require grouping products into families; but for very different reasons. This commonly results in a difference in how the grouping happens.

Typically for Lean, a family would mean grouping of products manufactured by the same resources. This would create a synchronous flow in manufacturing that allows products to be produced at a uniform, linear, market-driven time known as takt time.

For S&OP, families are product groups that are similar in the ways customers/sales look at them in the market as per their usage. Their purpose is to help arrive at a rational and reasonable forecast based on market trends.

As is typical with ideal circumstances, only rarely would there be the same families for both Lean and S&OP. This rare case would be when the Lean product families match what is sold to customer markets. That is, there is a one-to-one mapping between production and the markets – quite unusual.

The recommended approach to best align the product families for Lean and S&OP is to use the Executive S&OP techniques. This would involve converting each market based family demand into value stream volume or run rate, which would then drive the execution.

Lean needs to know how much volume needs to be manufactured per production family. The rough cut resource planning done as part of S&OP can be used for alignment by mapping the volume data from S&OP to the detailed level data for execution purposes.

To arrive at a reasoned relationship between product families, map the historical data of S&OP market families against existing Lean families to arrive at a correlation, which in turn can be used as a basis for translating volume to mix (detailed level). However, while this connection is being established, scenarios like seasonality, cyclical nature, among others will need to be considered.

The Lean principles of operational efficiency are essential to a successful S&OP. Continuous improvement driven by S&OP will be advanced by embracing Lean concepts and help close the loop between business strategy and execution.

Organizational Alignment: The Key To Successful S&OP Deployment

The market has been through an extended period of upheaval, which has left it volatile. The aftermath of this turmoil makes investors as well as business owners anxious. Sales & Operation Planning has emerged as a popular solution for businesses that are looking to minimize their risks and devise an operations strategy that yields favorable results. S&OP can greatly boost the visibility and instill better business relation within the enterprise. At the Las Vegas S&OP Conference that was organized by the IE Group this year, the interest shown by industry leaders in S&OP can be easily gauged from the volume of the audience who made it to the event. Subsequent events have also generated similar buzz in the industry, and S&OP has emerged as a very real and a viable approach for gearing up the business towards greater revenue generation.

An emerging trend among supply chain vendors has been to headhunt senior executives who have orchestrated change at an organizational level and implemented S&OP for their former employers, and thus possess the skills as well as the experience necessary to perform a similar feat for their new employers. The need for such a move on a vendor’s part arises because of the heavy repercussions of not deploying the S&OP in a correct manner. The sheer investment and the training aspects of the entire process are a logistical nightmare, and only a professional who has a well defined outline of the entire process already in their head can ensure the successful completion of such an endeavor.

The need for organizational change supersedes all other requirements that a company might encounter in their quest for enterprise wide S&OP deployment. The very fact that S&OP has a direct impact on demand forecasts, resource management, and labor utilization makes it a powerful tool for radically improving the reliability as well as performance of the supply chain.

An unconventional approach is required for a successful and rapid implementation of S&OP on an organizational level.  This whole process is made even more complex by the fact that there is no defined point at which the implementation of S&OP is deemed completed. It is a gradual and ongoing process that a supply chain vendor will consistently have to work on and optimize in order to adapt to the volatile markets, the evolving business relationships that all growing companies end up forging, and the industry in itself which keeps pushing the boundaries for what is considered standard.

People often are hesitant in pushing forward and questioning what is acceptable and what is attainable. Limiting your options even before you have had a chance to find out for yourself what the limitations actually are is a common reason why S&OP does not yield expected results for many organizations. S&OP needs to be implemented not because the present market scenario will be easier to navigate, but because the organization will be better prepared for major future events. Limiting the process to what is foreseeable defeats the purpose, and thus must be avoided. The inherent inertia that causes this attitude needs to be tackled directly, and organizational change is the key to that.

Changing the mindset of an entire organization and radically altering the established way of doing things will certainly not be an easy task, or even possible to achieve overnight. Consistent and persistent effort, guided by an expert who has the entire roadmap clear ahead of them is the best way to ensure the success of this effort. The need for every single department and organization within the enterprise to collaborate with each other and work in tandem is essential if the implementation of S&OP throughout the company is to be fruitful.

Bristlecone ensure smoother management of operations across different geographies, while increasing the top line through the deployment of best-of-breed S&OP solutions. The company achieves this by ensuring collaboration across the enterprise and aligning core objectives by creating central goals and bringing all external and internal stakeholders together. The S&OP deployments services that Bristlecone offers, are rapidly developed through the inclusion of popular metrics and enhanced data crunching capabilities, providing remarkable results for your organization, and ensure that you have a lot to gain from the deployment of S&OP solution in your enterprise.

Register for our Webinar on Hi-tech and Semiconductor Sales and Operations Planning.
Click here.

The Metrics Game – KPIs for S&OP

Sales and Operations Planning, or S&OP, is a subject of great interest to many companies – large and small.  In simple terms, it helps companies match demand and supply. On the demand side, there has been a growing interest to leverage more and more demand signals so as to make better predictions and on the supply side the attention has been on inventory optimization. Sales & Operations planning was introduced to tackle the problems on both sides, as a result creating a more Integrated Supply Chain.

Many companies have adopted a roughly sketched monthly process to review their demand and inventory situation. However due to the dynamic nature of today’s businesses and excess reactivity by management, organizations are looking for best practices and performance measures of an S&OP process. These measures differ from organization to organization, depending on the kind of industry they operate in. Identifying the right performance metrics of an S&OP process can help customers of S&OP achieve greater automation and effectiveness.

To understand the improvement because of S&OP, the first question that comes to mind is what is to be measured? As the saying goes, anything that cannot be measured cannot be improved. The same stands true for the S&OP process as well, where the organization implementing S&OP should know what the most important KPIs for S&OP are.

Essential KPI and Reports for S&OP

The S&OP process of every organization is different, thus their S&OP KPIs would be different. However there are a few metrics that anybody implementing S&OP cannot afford to miss.  Broadly, these KPIs fall into 3 levels – Strategic KPIs, Detailed KPIs and Process control measures. These KPIs should have an end-to-end focus rather than having functional limits. Every identified KPI should have a functional owner and this functional owner should be involved at every stage of the process. Also, care should be taken that these KPIs are measured frequently. In fact, many KPIs need to be monitored weekly; some even daily.  It is very important that the senior management pays constant attention to these metrics and the ground staff clearly understand these KPIs.

Designing the KPIs for S&OP process should primarily involve the following steps:

  1. Identify the needs of various stakeholders of S&OP process
  2. Establish S&OP goals
  3. Identify various crucial demand and supply aspects
  4. Select Metrics and Performance Indicators for different aspects of demand and supply
  5. Assign KPI Owners
  6. Set Targets for Metrics
  7. Track Performance of Metrics
  8. Monitor S&OP Process Control Indicators

A streamlined S&OP process adds significant value to an organization.  If measured effectively, the S&OP measures would have a positive effect on other measures as well.  Thus it is essential to devise a structured framework for identifying critical KPIs for S&OP.