866.P4D.INFO | Plan4Demand.com | Info@plan4demand.com Presented by Sharon Nelson and Andrew McCall at SAPInsider #SCM2013 March 6th, 2013 This session reviews core elements of supply chain planning: Demand planning and forecasting, consensus forecasting, supply planning, DRP, CPFR, and the overarching S&OP process that drives these elements. Examine components of the SAP solution, as well as discussion of how the SAP S&OP HANA environment (cloud-based) and the SAP instance need to be established to work together. Gain an understanding of the roles that different application components play. Learn how to design and blueprint so that enabling technology can be added to the process in stages. Get a clear vision of what a high-performing planning process looks like when these tools and practices are in place. Walk away from this session with a set of practical steps needed to take to get started on this process. For more information, a PDF, or the video recording contact Jaime.Reints@Plan4Demand.com Check out more information on additional topics at www.plan4demand.com

1. March 6th, 2013 Partnering for Success

2. Page 1
Andrew McCall Sharon Nelson
• Solution Director, Sales & Operations Planning @ • Managing Director @ Plan4Demand
Plan4Demand • Manages all aspects of Consulting & Delivery for our
• 28 Years in Supply Chain, Operations & Finance customers
• Vertical Expertise in Food & Bev, CPG, Beer/Wine/Spirits, • Specializes in Business Transformation and Process
Chemical, Paper & Wholesale Distribution Improvement
• Brings a Holistic view of People, Process & Technology to the • Has been a CIO at IBM Network Hardware, ABB Kent Taylor
space & Easton Bell Sports
• Lives in the Frozen North of New Hampshire • Lives in the Warmth of Sunny South Florida

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 Overview & Intro
 Planning Today - Driving Competitive Advantage
 The Role Technology Plays
 Functionality
 Infrastructure
 Your Maturity Model – What Does Good Look Like to You?
 Design Considerations – Best Practices in your industry and SCN
 Phasing & Pre-Requisites
 Using Technology to DRIVE Maturity, not as a stage gate activity
 Measuring Success
 Key Take Aways
 Q&A

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Overview & Intro
• Take Away an Understanding of Planning Today: Challenges,
Changes & Opportunities
• A clear picture of the evolving role of enabling technology and
how it is shifting
• Creating a Vision within your organization, and driving progress
towards that vision
• Measuring Success

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Planning Today
• Planning?? Pervasive
• Horizontal Orientation: What does it look like?
• Key Points in Driving Linkage

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• Demand Plan
• Supply Plan
• Production Plan
• S&OP Forecast • Rough Cut Capacity Plan
• Annual Operating Plan • Finite Plan & Schedule
(Budget) Tactical • Distribution Plan
• Standard Cost • Transportation Plan
• Brand Plan • Labor Plan
• Strategic Logistics Plan • Materials Plan
Operational
Strategic
• Strat Plan
• CapEx Plan
• Portfolio
Plan/Product
Roadmap
• IT Roadmap

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Demand Management S&OP Supply Management
History
Demand Supply
(Unconstrained
(Constrained Inventory
product
market demand) availability)
Sensing
Supportable
Demand
Operational Planning & Execution
Demand Signal Sourcing Production Deployment Fulfillment
Sourcing, Production, Logistics & Fulfillment Planning

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Source: Supply Chain Insights LLC

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 Challenges
 Cross Functional Orientation: Requires that process, knowledge and
data flows from area to area, and through a multitude of systems and
views – creating a unified flow through these areas is easier said than
done!
 Different Metrics & KPI’s that need to be “harmonized” to drive towards
and alignment with overall strategy
 Data Explosion – Exponential: Requires and strategy to support –
collection and use are two different strategies.
 Multiple Supply Chains Optimize on different points: Customer Facing
Supply Chain vs. Operational
 External Focus: Market & Competitive Conditions continue to evolve and
change while we try and get everything else aligned. In many cases,
requirements are changing faster than we can address them.

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The Role Technology Plays
• Functionality
• Infrastructure
• Emerging Capabilities

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Applications – Tight coupling between application server and SAP HANA®
Tight Coupling
Today  With large data volumes, reading Mid-Term (Plan)
information becomes a bottleneck
ABAP AS ABAP AS Next Generation
App
 The advent of next generation Next Generation Apps
OLAP enables a great deal of new Procedure
code
Program
code
capabilities in users hands
Fast data
 Next generation applications will compile
transfer
delegate data intense operations & deploy
DB Data in
Runtime
 The runtime environment executes memory
complex processes in memory SAP HANA
 In-memory computing returns
results by pointing apps to a
location in shared memory

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Corporate BI
Enterprise Data Warehouse (BW)
SAP HANA (nxt)
Local BI
Virtual Virtual Virtual
New Applications
Data Mart Data Mart Data Mart
SAP ERP 1 SAP ERP n Non SAP
(or CRM, SRM, SCM) (or CRM, SRM, SCM) Bus App
...
Database Database Database

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Mid-Term
• SAP Trade Promotion Management
• SAP Merchandise and Assortment Planning
Short-Term • SAP Planning and Consolidation
• Sales and Operations Planning
• SAP Strategic Workforce Planning
• Predictive Segmentation & Targeting
• SAP Dynamic Cash Management
• Customer Revenue Performance Mgmt
• SAP Smart Meter Analytics
• Demand Signal Repository
• Profitability Analysis with SAP ERP
• And additional solutions in the pipeline

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Was… Is Evolving To…
Batch Driven Real Time
Get the Process right before putting Use Technology to drive process
technology in place maturation
Cross Functional Data Silos Horizontal Data Flow Layer
Disconnected Metrics Dynamic Analytical Layer
Volume Forecast that is Converted to Toggle between Volume, Financial, &
Financial Forecast Profitability
Sales History as Driver Sales History, Channel, Consumer, Market
& Category Data all being used to
develop insight
One Number as Goal Managing all Numbers and the drivers of
differences between each simultaneously

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Your Maturity Model: Defining Your Vision
• Functionality
• Infrastructure
• Emerging Capabilities

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Key Objectives of Supply Chain & Operations Management
Strategic Tactical
• Optimized long range capacity • Credible Demand Forecast
(production & fulfillment) • Accuracy/Stability
• Effective Sourcing (Where Made, • Visibility
Raw Material, Resins)
• Priorities
• Supported new product
development/product • Alignment on Pre-Build
transformation/ innovation Requirements & Lead Time Support
• Alignment with Annual Operating • Visibility to planned
Plan/LRStrat Plan production/deployment
• Demand Responsive Inventory & Mix • Reliable production/deployment
Positions execution
Enablers
Management Business Insight Organization & Processes, Information Scope &
Oversight / Metrics Talent Policies & Technology & Interdependencies
Controls Data

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Demand Management Supply Management
 Forecast Error & Bias  Capacity Availability
 Mid/Long Volume Projections  Inventory Performance & Projections
 Forecast Risks & Opportunities  Customer Service Levels
 Customer Projections  Demonstrated Performance
 Brand Projections  Capital Requirements & Projections
 Volume Assumptions 3/11/2013
 TDC Performance & Projections
Source: Supply Chain Insights LLC  Supply Assumptions

20. Source: Supply Chain Insights LLC

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Measuring Success
• Moving the Needle towards the Vision: Measuring Maturity
• KPI’s & Benefits

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Executive Continuous
Overall Portfolio Demand Supply Pre-S&OP Review Improvement
Survey Data 1.9 1.5 1.6 1.6 1.1 1.4 1.2
MM Target 4 4 4 4 4 4 4

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Top Value Opportunities Delivered by S&OP
 Improved customer service and revenue generation
 Improved coordination between Sales / Marketing / Operations/Finance
 Improved forecast accuracy
 Better new-product introductions
 Inventory reduction – The right mix of inventory
 Reducing the cost of obsolete inventory
 Capacity Utilization & Efficiency

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Item Best in Class Results*
Inventory Reduction 15% - 20%
Service Level Improvement 3% - 5%
Excess & Obsolete Reduction 25% - 40%
Unplanned Transfer & Expediting Cost 5% - 10%
Overtime Labor Reduction 10% - 12%
Difficult to Quantify/Softer Benefits
 Portfolio Management Capabilities * Aberdeen Group 7/2011
* Tom Wallace - S&OP Cost & Benefits 2010
 SKU Rationalization & Complexity Management
 Improvement of Accountability & Control
 Earlier visibility into issues
 Embedded Communication & Complex Project Management Capability
 Action Orientation
 Exception and KPI focused

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Key Take Aways
• Companies Successful in the space are defining an overall
transformation in their planning culture – this is not a “project”
• Enabling Technology has “leap frogged” from the end of a
transformation to a DRIVER of transformation – this can help us
push maturity faster.
• It is critical to establish a vision and maturity model for YOUR
planning environment
• Establishing Success Criteria up front helps organization
persevere through what is a long cycle of change and keep an
eye on performance.

26. March 6th, 2013 Partnering for Success

27. For Additional Resources:
Contact: Jaime Reints
412.733.5011
jaime.reints@plan4demand.com

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