Sales and Operations Planning Las Vegas 2011

1. January 27, 2011

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Who is Optimum Nutrition
Need for CPFR in the S&OP
Process
Implementing CPFR
Goal of CPFR
Roadblocks to success
Overcoming roadblocks
Final Thoughts
Questions

3.  Optimum Nutrition (ON) is a dominant force in the sports nutrition
industry with the highest quality products available in health food
stores, specialty stores, gyms and progressive retailers everywhere
 ON was founded in 1986 by two brothers in Chicago , IL
 Optimum Nutrition, Inc. (ON) is now a wholly owned subsidiary of
Glanbia, a leading international cheese and nutritional ingredients
group based in Ireland
 ON has two brands of nutritional supplements
◦ Optimum Nutrition
◦ American Body Building
 ON is the only sports nutrition company to manufacture items in
every product category:
◦ Protein Powders
◦ Nutritional Bars
◦ Ready-to-drink Sports Beverages
◦ Vitamins
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4.  Significant growth in any industry drives the
industry leaders to initiate change in order to
be successful…
 The Sports Nutrition Industry, until
recently, was not truly focused on
forecasting, collaboration or the Supply and
Operations Planning Process
 ON recognized that in order to continue their
success and support their growth
initiatives, change had to occur in these areas
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5.  Collaborative Planning, Forecasting
and Replenishment practice is the basis
for achieving Optimum results from
your Supply and Operations Planning
Process
 This collaboration must take place
with both internal and external
customers in order to drive results
through to the S&OP process
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6.  Collaborative planning and forecasting must first
begin with the demand planning function at both the
supplier and trade partner
 The baseline forecast is created at the customer level
by sku to drive improved forecast accuracy
◦ Input internally from the sales and marketing functions are
key
 Trade Partners and Suppliers must then openly share
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forecasting information in order to begin the
collaboration process

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 Supplier best practices:
 Monthly in depth forecasting meeting with top trade
partners looking at a rolling 6 month forecast with a
focus on the next 90 days
 Weekly meetings with top trade partners where possible
in order to react to changes more quickly
 Compare both forecasts and manage the exceptions and
discuss any new information from both parties
 New products
 Promotional calendars
 Supply constraints

8.  Goal of CPFR is to create a more accurate forecast in order to
drive a better S&OP process
 The timely handoff from the demand planning function to the
supply planning function is critical
 Speed is of the essence: the quicker you can alert the supply
planning group to changes, the more success you will have in
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altering your production schedules
 Helping people understand the goal of
the CPFR process is in the end to
increase fulfillment rates, improve
customer satisfaction, increase
manufacturing efficiencies and decrease
inventory DOH

9.  Under developed demand planning function both at the
supplier and trade partner level
 Under developed supply planning function
◦ Supply Planning vs Manufacturing?
 Sales team not familiar with the collaborative planning
and forecasting model
◦ Forecasting viewed as a waste of time
 Trade Partners not familiar with the collaborative
planning and forecasting model
 Weak S&OP process not supported by business
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10.  Make sure that the demand and supply planning functions have
the right team in order to drive change both internally and
externally with trade partners
 Help the internal sales team understand the importance of the
process by demonstrating what improved forecasting can do to
their sales and fulfillment levels
 Help trade partners understand the importance of the process
by demonstrating that improved forecasting can have a positive
impact on increasing fill rates, improving out of stocks and
driving sales
 Implement a very detailed S&OP process
◦ Weekly “mini” S&OP meetings
◦ Monthly S&OP Meeting
 Over communication is a good thing
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11.  In order to develop a great S&OP process it must first
begin with a solid forecast
 At least try something
 Monthly S&OP meetings are great, but in this industry
weekly meetings are critical to success
 Over communicate
 Goal of all good S&OP processes:
◦ Establish and achieve DOH targets while exceeding trade
partners needs!!
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12. QUESTIONS/DISCUSSION?
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