The core building block of a successful Sales and Operations Planning (S&OP) process is a solid demand planning process. Carlisle Brake & Friction (CBF), the leading provider of high performance braking had the need to implement a Demand Management Engine as their primary tool to facilitate the demand planning process. The presentation focuses on the S&OP process, from creating the need, to laying out a road map, as well as building the Demand Planning capability.

1. Michael Ryan, Carlisle Brake & Friction
IBF Business Planning & Forecasting, Orlando, FL
October 29, 2014
Implementing a Demand Planning
System from the Ground Up
Copyright © 2014 Carlisle Brake & Friction

2. 2IBF: DP from the Ground Up ● October 29, 2014
CARLISLE INTERCONNECT
TECHNOLOGIES
CARLISLE FOOD
SERVICES
C A R L I S L E B R A K E
& F R I C T I O N
CARLISLE CONSTRUCTION
MATERIALS
Carlisle Companies (NYSE:CSL)
Overview
 Diversified Manufacturing Conglomerate
 Headquartered in Charlotte, NC
 2013 Revenues: $2.9B
 Public Company (CSL on NYSE)

3. 3IBF: DP from the Ground Up ● October 29, 2014
Markets & Applications

4. 4IBF: DP from the Ground Up ● October 29, 2014
Carlisle Brake & Friction
“Carlisle Brake & Friction is the first choice in innovative braking
and friction solutions for the world’s top manufacturers. Our
global manufacturing, sales and support networks ensure we
are there to serve and support our customer base, wherever
they may be.”
Matt Dietrich, President CBF

5. 5IBF: DP from the Ground Up ● October 29, 2014
Implementing Demand Planning from the Ground Up
Mapping the Path Forward
TechnologyPeople Process

6. 6IBF: DP from the Ground Up ● October 29, 2014
What’s the Problem We’re Trying To Solve? Why?
Demand Planning as the Foundation of S&OP
S&OP Implementation Challenges
Choosing a Demand Planning Software Provider
Lessons Learned
The Path Forward with S&OP
Implementing Demand Planning from the Ground Up
Agenda

7. 7IBF: DP from the Ground Up ● October 29, 2014
S&OP will become “The Way We Work” at Carlisle Brake & Friction
Why “Do” S&OP?
Sales Perspective:
• Improved Supply
• Improved OTD
• Results in Sales Revenue
What’s In It For Me? (WIIFM)
Quantitative: It Can be Measured
The WIIFM of S&OP
What’s in It For Me? Carlisle Brake & Friction?
Manufacturing Perspective:
• Improved Forecasts
• Improved Communication
• Results in Better Execution
From a Business Perspective:
• Support Reaching Our 2014 Global Sales Goal
• Demonstrate Capability to Customers as a Reliable and On Time Supplier
• More Efficient Use of Capital by Linking Production, Shipments and Inventory

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Businesses utilizing S&OP realize measurable benefits
Supply Chain Insights LLC, Copyright © 2013
Cross-Industry Survey Linking S&OP to Business Results
What Benefits Can We Expect From S&OP?
Benefits Received from an Effective S&OP Process

9. 9IBF: DP from the Ground Up ● October 29, 2014
Why did we start an S&OP process?
• Wanted to add value to the business
• Be better suppliers for our customers
S&OP is…
• A Business Process
• Market based and customer driven
• Collaborative and cross-functional
• Metrics tracked; performance driven
• Tied to execution of strategic plans
• Process of continuous improvement
Why Did We Start an S&OP Process?
What Motivated the Business?
Executive
S&OP
Product
Review
Demand
Review
Demand / Supply
Balance
Supply
Review
Integrated
Reconciliation
Closed Loop
Process

10. 10IBF: DP from the Ground Up ● October 29, 2014
S&OP Implementation Challenges
Recognizing Barriers to Success
Challenges: People, Process, Technology
People
• Develop organizational resources to support S&OP implementation
• Drive change management for buy in and support
• Execute on quick wins while implementing broader process
Process
• Formalize expectations and timing on S&OP process deliverables
• Shift from a dollar based to a unit based forecast
• Leverage segmentation to define MTS/ATO/MTO and lead times
Technology
• Select, purchase and implement Demand Planning Software
• Load historical demand and configure system to support process
• Link forecast to Rough Cut Capacity Planning to assist Supply Planning

11. 11IBF: DP from the Ground Up ● October 29, 2014
Demand Planning as the Foundation of S&OP
The Important Role of “Sales” in Sales & Operations Planning
DEMAND PLANNING
S&OP
ProductReview
DemandReview
SupplyReview
Demand/Supply
Balancing
Integrated
Reconciliation
ExecutiveS&OP

12. 12IBF: DP from the Ground Up ● October 29, 2014
Starting Point:
Forecasting was done within existing instance of QAD.
• It is an item-based forecast; limited to one forecast line per item.
• No visibility to individual customer forecasts.
• Forecast changes are not trackable in the system.
• Cannot “blow down” changes from the top level down to items
Desired Functionality:
Defining requirements for Demand Planning software
• Forecast by Customer/Item
• Apply changes at any level of the Customer or Product hierarchy
• Systematically identify forecast outliers (oversold/undersold)
• Locate items with forecast without sales (exception reporting)
• Integrate with existing MRP system
Value Proposition of Demand Planning Software
Making the Business Case

13. 13IBF: DP from the Ground Up ● October 29, 2014
Demand Planning Software Implementation Plan
John Galt Project Plan
Scope and
Initiation
Conceptual
Design and
Plan
Detailed
Design
Configure
and Build
Test and
Train
Deploy and
Hyper Care
Gap Analysis
Project SoW
To-Be Process Maps
Design Signoff
Data Mapping / Rules
Finalize Consensus Forecast
Interface Build
Data Mapping
User Acceptance Test
Process Based Training
Go Live!
Hypercare
Implementation %

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Forecast Characteristics
• Forecast in Units, monthly buckets
• Aggregate Level, by
Product, Market or Customer
• 12-18 month view
• Updated monthly
14
Forecast captures the information needed to drive execution
Questions Answered
• What product will be shipped?
• When will it be shipped?
• How many will be shipped?
• Who is buying it?
• Where is it going?
Same Data, Different Perspectives Forecasting is a Closed Loop
FeedbackLoop
External Input (Qualitative)
History
Statistical Forecast
Customer Input
Marketing Input
Market Segment Mgr.
Sales Leadership
Consensus
Official SIOP Fcst.
Forecasting Process
• Closed Loop Process
Level of Detail
• Item to Aggregate
Item
Aggregate
Demand
Planner
Leadership
Team
Sales &
Marketing
Discussions
• Cross Functional
529
MRP12046
MRP1173
90002245
342-116-1
VTS2
SALES
MARKETING FINANCE
MANUFACTURING
SUPPLY
CHAIN
CUSTOMER
SERVICE
LEADERSHIP
• New Products
• Product Support
• Product Lifecycle
• OTD
• Lead Time
• MTS/MTO/MTA
• Sales $
• Margin $
• EBIT %
• Customer
• OE / Aftermarket
• Market Segment
• AOP
• Source Facility
• Process
• Interplant
• Product Family /
Line
• Shipments
• Intercompany
• Direct Ship
• Material
• Projected
Inventory
• Business Results
• Internal Reporting
• External Reporting
What’s In A Forecast?
Deliverables from John Galt’s Demand Management Engine

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Demand
Planning
Supply
Planning
Finance
Consensus
Process
Parallel
Views
Internal Views
External Views
(Actual)
(Plan)
Demand & Supply Plan Flow
Control
Document
Sales Forecast Manufacturing Execution
Financial Performance
• S&OP process links Sales, Manufacturing, Finance and Supply Chain
• Sales forecast signals Manufacturing; Manufacturing supply plan signals Sourcing
• Sourcing utilizes forward forecast to schedule material buys
• Revenue forecast created by Finance; applying customer margins to sales forecast
• Forecast is a closed loop process; feedback incorporated from prior cycle
• Performance to plan is measured and tracked
How The Forecast Feeds the Process
What Will the Forecast Be Used For

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Setting the Path for Success
• Plenty of Opportunity!
– Some coming from existing broken processes / awkward practices
• S&OP Shows us the “Rocks” in the Water
The Path Forward with S&OP
Where We Were, Are, Are Going
We Were… We Are… We Are Going…
• Communication by exception
• Improved Forecast Accuracy
• Plan for every part
• Align inventory to demand
Order
Management
Supply
Planning
Inventory
Management
• Daily interaction w/ plants
• No Demand Planning Org
• No Forecasting software
• Near term (<30 days) focused
• Reactive inventory mgmt.
Where…
• Moving to standard lead times
• Staffed
• Implementing Software
• Rough Cut Capacity Planning
• Calculating inventory entitlement
Demand
Planning

17. 17IBF: DP from the Ground Up ● October 29, 2014
Focus on Metrics That Matter
• Customer Facing Metrics
– On Time Delivery
– Backorders
– Customer Forecast Accuracy
• Internal Metrics
– Forecast Accuracy
– Schedule Attainment
– Inventory Turns
Understand Interrelationship between Metrics
– Aligned & complementary goals
Make It Measurable
Get A Baseline, Drive Continuous Improvement
Maximum Service
Maximum Profit
Reduced
Service
Undersold
Plan
Reduced
Service
Oversold
Plan
• Lost Sales
• Backorders
• Overtime
• Expediting
• Cash
• Inventory
• Capacity
• Utilization
Profit
“One Goal, One Plan”

18. 18IBF: DP from the Ground Up ● October 29, 2014
Sales & Operations Planning (S&OP)
Moving Forward on Our Journey

19. 19IBF: DP from the Ground Up ● October 29, 2014
For More Information
Mryan@CarlisleCBF.com
www.Linkedin.com/in/isolveproblems