Enabling Best-Practice Demand Management and S&OP with Advanced Technology Featured Presenter: Doug Dedman, Vice President, Global Services, Steelwedge Software Are you taking full advantage of all your demand signals? The sheer velocity of change – in business complexity, global volatility and available data – makes the prospect of managing regional and global planning a more elusive mission. Powerful demand planning can take you from a reactive to a proactive mode and turbo-charge your S&OP process. In this webinar, you will learn how next-generation technology has enabled companies to more accurately forecast what their businesses will require. Join us to learn more about how the right demand management approach and platform can enable you to: Understand and grasp each demand type Ensure accountability to the demand plan Benefit from statistical forecasting where it makes sense while maintaining flexibility to use other forecasting methods Collaborate internally and with customers when it makes sense Achieve real-time visibility and synergy across all channels To learn more about Steelwedge's Advanced S&OP Technology please visit: http://www.steelwedge.com/solutions/

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Single Line of Sight: Plan, Perform, Profit
The 5 Keys to Demand Planning Success
April 29, 2014

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Today’s Presenter
Background
Doug Dedman brings more than 20 years of services, operations, supply chain
planning and S&OP expertise to Steelwedge. Prior to joining Steelwedge, Doug spent
18 years at DBM Systems.
While there, he was responsible for the development and growth of a global Sales and
Operations Planning (S&OP) consulting practice that specialized in helping
multinational corporations develop effective executive S&OP processes. He also held
roles in General Management, Program Management and operations and supply
chain consulting.
Doug has also served in the role of Senior Director Customer Management at
Steelwedge, with responsibility for executive sponsorship and overall customer
satisfaction and project quality. He holds a bachelor of arts in Honors Economics from
the University of Waterloo as well as an MBA from the Odette School of Business.
Doug Dedman
VP, Global Services
SteelwedgeSoftware Inc.
3825 Hopyard Rd
Pleasanton, CA 94588
Tel : (949) 460-1700
ddedman@steelwedge.com

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Introduction
Separating Demand by Demand Type
EnsuringAccountability For Demand Plan
Prudent Use of Statistical Forecasting
Collaboration
Real Time VisibilityAcross Business
Summary and QA
Agenda

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What is the purpose of Demand Planning?
• Input into developing a Financial Forecast
• Develop an unconstrained market driven Booking and
Shipment Plan
• Set targets to meet market expectations
• lead time, product offering, pricing, service etc.
• Set targets for operational buffers
• Backlog and Finished Goods Inventory
• Input and Output of S&OP process
• Constrain or increase the Demand Plan based on S&OP
feedback (supply plan) – shape demand

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What are the Keys to Demand Planning Success?
1. Separating Demand by Demand type
2. Ensuring Accountability for Demand Plan
3. Use Statistical Forecasts where appropriate
4. Collaborate to develop the Demand Plan
5. Real time visibility across business

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Demand Streams

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Demand Streams
• Break the Demand Plan into streams
based on:
• Demand characteristics
• Accountability
Purpose
To better understand your demand
Result
Improve the accuracy of your future plans

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Demand Streams
• Typical breakdowns:
• Region (Geography)
• Normal vs. Abnormal Demand (Flow vs. Project)
• Distribution Centre vs. Direct
• Large Customer(s) versus Small Customers

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Demand Streams
• Demand characteristics may be different by stream
• Seasonalityand/or Order Cycles
• Normal vs. Abnormal Demand
• IntelligentDemand
• Major Customer
• Product mix may be different by demand stream
• Specific items for specific customers
• Demand Planning tools should support:
• Bringing demand streams in from different sources: CRM, Customer
Collaboration,MRO demand
• Supportaccuracy measurementby stream
• Supportcollaborationand consollidation

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Insert SPB screenshots here
Link to
ESOP
Opportunity Pipeline via
Sales Pipeline Bridge
on
Opportunity Pipeline for S&OP Planning

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2.42 Acct Mgr RE Laptops Max Stores-M
Opportunity Pipeline via
Sales Pipeline Bridge
on
Opportunity Pipeline Detail

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Confirmed S&OP Sales Plan

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Consolidating Demand Streams
Sum up the demand stream plans for the Executive Meeting
CRM
(Region 1)
CRM
(Region 2)
CRM
(Region 3)
Flow Demand
Demand Plan
(Region 1)
MU - Spain
Demand Plan
(Region 2)
MU - Turkey
Flow DemandFlow Demand
Demand Plan
(Region 3)
MU - UK
Consolidated Demand Plan
(Center Node)
(ENPE)
5-Section Sheet
(Center Node)
(ENPE)
Detail
Level for
Demand
Cycle
Detail
Level for
Executive
Meeting

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Demand Streams
• Breaking out demand streams allows better
management of the demand plan
• Statistical forecast where applicable
• Intelligent schedules where applicable
• CRM based project forecasts where applicable
• Breaking out demand streams allows you to assign
accountability
• It won’t improve unless a specific person is responsible and
accountable
• Measure accuracy at this level in the demand cycle of S&OP

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Holding Accountability to Demand Plan

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A Common Organizational Challenge!
In Order to improve Demand Planning, I need
to hold someone accountable for the demand
plan!
Why is this so difficult?

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Accountability
• Need to measure demand plan on something that is not a shared result:
• Bookings - Output of Sales/Marketing(Demand Side)
• Shipments – Result of demand (orders) and supply (inventory, production)
• Need to measure at a level of responsibility
• Region
• Customer
• Distribution/Direct
• Breaking out demand streams allows you to assign accountability
• It won’t improve unless a specific person is responsible and accountable
• Measure accuracy at this level in the demand cycle of S&OP

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Accountability Includes Measurement of Change
• Need ability to see change in plan (month over month)
• Drill down as required to see what caused change:
• product/customer/demand planning role
• Accountability not only includes accuracy but net change
• Tie measurement back to supply capability
What is the impact of
downturn in demand
one month out?

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Example Customer: Program Objectives and Deliverables

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Example Customer: Quantitative Assessment
Target Savings: $5M - $10M per $1B in revenue
Inventory Reduction
10-20% reduction through more accurate demand plan
Customer Satisfaction
10-30% improvementin customer satisfaction through reduced stock-outs
Demand Plan Accuracy
15-30% improvementthrough collaboration
Planning Cycle Time
50-70% reduction via integration and process automation
Revenue and Margins
5% lift through reduced stock-outs and better cost management

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Use Statistical Forecast to Improve Demand

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Normal Vs. Abnormal Demand
• Normal Demand – past performance (mix and volume) is a good
indicator of Future Forecast - FLOW
• Statistical forecast based on history
• Modified by future plans – promotion, price change, new markets
• Abnormal Demand – a single transaction drives a significant
portion of business - PROJECT
• Past sales are not an indication of future sales – lumpy demand
– Forecast on a case by case basis
– Use an Opportunity ManagementProcess - CRM
• Historical mix ratios will not apply
• May include more than one product family
“Manage” the Projects - “Forecast” the Flow.

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Normal Vs. Abnormal Demand
• Types:
• Flow vs. Project
• MRO vs. Project
• Flow vs. New Distribution Center
• Domestic vs. Large Export
• Regular vs. Lumpy
• Trying to statistically forecast the right hand side is
extremely difficult and may give misleading results
• Break the demand planning into the different inputs and run
forecast against items on the left
Keep in Mind: You will most likely have different
fulfillment strategies based on the type of demand.

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Identifying Abnormal Demand
• Determine the “size” of
opportunity that is abnormal
• Evaluate historical bookings to
determine order size relative to
volume
• Find the balance between:
– Number of opportunities
– Large opportunities that upset
the normal supply flow
If in doubt, pick a lower
number of opportunities
to manage.

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Statistical Forecast Analysis
• Understandthe quality of the demand data, i.e. active periods, sparse, etc.
• Generatemultiple hierarchy level forecasts and analyze results
• Understandthe forecast error by levels, i.e. MAPE and Weighted MAPE
• Assess the forecast growth and inflation
• Recommend the optimal forecast level

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Product Segmentation Analysis – Demand Policy
Take the efficient approach - Understand complexity and its impacts
Volatility
Impact
Statistical
Forecast
Collab &
Exception
Stocking Strategy: Min/Max, Safety
Stock, etc

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Demand Policy

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Collaboration

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Why Collaboration?
Demand Planning is an Integral
Part of S&OP.
S&OP is a collaborative process to
arrive at a balanced demand and
supply plan.
Using collaboration to arrive at
Demand Planning provides a better
signal to the S&OP/IBP process
S&OP
Strategic Plan
Master
Schedule
Demand Plan
Production and
Material Plan
Three to five year
strategic plan for the
family. Typically
updated annually
12 month or more, rolling plan
from the family. Updated monthly
12 month or more, rolling demand
plan for the family. Updated
monthly
Detailed schedule for specific items
in the family. Authorized by the
S&OP production plan. Typically
updated daily or weekly.
Detailed production and material
plans linked directly to the master
schedule.
S&OP

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Why Collaboration is important?
• Demand Planning is about predicting future results.
• Because we are dealing with the future, by definition we will be wrong!
• You want to use the best information possible to develop the demand
plan – pull in from multiple sources.
• Examples of Collaboration
• Customer Collaboration
• Partner Collaboration
• Internal Collaboration
– Multi-level demand plan
– Vertical integration

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Collaborative Business Planning Process
GoPro S&OP Sales Demand Planning
Sales
Manager
Forecast
Demand
Forecast
Inputs
Account
Forecast
Sales Orders
Master Data
Customer Data
Sales Territory
Forecast
Demand
Review
Consensus
Forecast
Planning Processes
Transaction
Files
Marketing
Demand
Planning
Account
Manager
Sales
Management
Sales/Ops
Consensus Exec
S&OP
Inputs & Outputs
Consensus
Forecast
Historical
Demand
Analysis
Performance
Current Plan
Finance
Waterfall
KPI Dashboard
Collaboration
S&OP
Sales
S&OP
Ops
Executive S&OP
Collaboration
Marketing
Forecast
New Product Forecasting
SOFE
Forecast
Locked
Consensus
Forecast
Locked
Consensus
Forecast

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Screen Shots – Account Manager

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Screen Shots – Sales Manager

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Screen Shots – Sales Ops

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Screen Shots – S&OP

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Real Time Visibility Across Business

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Real Time Visibility Across the Business
• Demand Planning is one key input to S&OP Process.
• Needs to support an S&OP process that is:
• Run on a regular monthly cadence
• Establishing clear accountability for all plans (demand and supply)
• Looking at business by product family – across demand and supply
• Link demand plans and supply constraints
• A learning process – monthly feedback and continuous improvement
• Include Key Business Levers
– Bookings,Backlog, Shipments, Inventory,Supply (Production)
• Supported by common definitions across the business

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Best Practice Enabled by Technology
• Single version of the Truth – from across multiple systems
• CRM, Orders, Forecast, Collaborative Demand view
• Integration to Finance (Monthly Financial Plan)
• Visibility of Budget in process
• Measurementof gap to Budget
• Use S&OP process to inform budget
• Ability to convert between units and dollars – will tell two different stories
• Earn and report in dollars – make and sell in units
• Ability to analyze data to determine RCA on out of tolerance plans and
recognize bias
• Capabilityto drill down below family to lower level drivers/issues
• Linked to system of record – aligned to execution plan

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Holistic View – Supported by Collaborative Process
• Need to view Demand Planning as an input to the overall demand and supply balancing process
• Tools need to support integration and timely data access
• Eliminate the time required to consolidate and manage data – Utilize this time for analysis

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Outcomes
Results/Benefits
First time in Company B’s history they are able to view demand in a single
source system with a common understandingon how the numbers are
generated
Challenges and Lessons Learned
Sophisticationof their NetSuite ERP solution
SW2 project is uncovering gaps in their original ERP implementation
Next Phase
Multi-Phasedroll out of S&OP Ops, Executive S&OP and Insight
Planned in the form of “Release Drops” versus a structured series of individual
SOWs

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Recap: Keys to Demand Planning Success.
1. Separating Demand by Demand type
2. Ensuring Accountability for Demand Plan
3. Use Statistical Forecasts where appropriate:
4. Collaborate to develop the Demand Plan
5. Real time visibility across business

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Q&A

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