This past week was the IE Group’s S&OP Innovation Summit at the beautiful venue of the Bellagio in Las Vegas. Kinaxis was well represented, especially with the wonderful keynote speech from Kathleen Geraghty from Celestica. Her keynote hit the main theme of the conference: S&OP Skills. Having attended and presented at many S&OP conferences, I was expecting the standard S&OP challenges of maturity and alignment with cross functional teams. The reason I found this conference surprisingly unique, is the focus on talent and skills. Celestica’s keynote centered on “Planning with Predictive Power”, which is done as a managed service from Celestica. Having worked many years in the supply chain with the contract manufacturing firms, I find this managed service, sometimes called PaaS (Planning-as-a-Service), extremely intriguing. The contract manufacturer, Celestica, already manages manufacturing and inventory. They are best prepared to do the planning service. Kathleen spoke about managing demand planning and scenario modeling of the Brand’s S&OP process, with the goal of improving forecast accuracy to above 85% and modeling in minutes, not days.
The benefit is directly in the inventory, as seen in Kathleen’s slide.
Celestica is providing the “talent” in this service. With the breadth of skills from being a contract manufacturer, Celestica uses Predictive Power and Kinaxis supply chain solution to insert the talent and skill in the S&OP cycle, directly impacting inventory, order fulfillment and cost. The Kinaxis Workshop – Learn and Laugh For the Kinaxis Workshop, my theme was “Laugh & Learn”. From the audience I heard they were pleased to take a humorous journey through S&OP, with follow on comments like, “that was great to break out of the typical S&OP materials”. As well, we shared the Four Keys of successful S&OP, with the audience participating by ranking their company against the keys. Some of the highlights from the “learn & laugh” session… Laugh 1. The S&OP journey is quite an ambitious one. From the early days of using excel and having only supply chain people attend, spending a few years stuck in “Stage 2” doing just demand and supply balancing, to holding real-time tradeoff decisions. It’s a journey of a 1000 miles, but in the end, it does pay off… :) 2. We shared our war stories about breaking through the corporate culture, and the significant change management needed to adopt this S&OP process. Everyone has heard the saying about tradition, “We’ve always done it that way here…" 3. Ultimately, S&OP is about finding problems. And, done correctly, an effective S&OP will be able to not only spot the obvious problems at the volume level, but also the underlying issues at the mix/SKU level. 4. The S&OP journey leads to a team of leaders that make tradeoffs and decisions. It’s the mark of an effective leadership team to decide those tradeoffs for the best interest of the company. As well, some decisions center on “survival”, using the S&OP to know when to “not make a decision”... 5. My personal favorite ended on the foresight a supply chain leader needs to have. Steering his/her team to a mature, Stage 5, S&OP requires the ability to stand against people who say “it cannot be done”…. This image reminds me of my Apple S&OP days, and taking the team north of San Francisco for white water rafting down the Russian River…. Learn The four keys to a successful S&OP are shown in the box below.
As I walked through the Four Keys, I had everyone from the audience fill out this form, ranking from 1-10 (low to high), how their company performs. The summary results: East West Integration: average of 4.8 North South Integration: average of 3.9 Volume and Mix: average of 5.9 S&OP On-Demand: average of 4.4 This is extremely interesting in that the better performing key was volume and mix. This is the ability to take a volume plan and quickly drill down to the mix/SKU level, testing the feasibility of the two, and having the ability to keep the plan feasible. This shows the high level of supply chain participation in the S&OP. Drilling up and down the product supply network is a core competency of the supply chain team. The lowest Key was S&OP on-demand. I remember my days at AMR Research, and the questions I would get on S&OP cadence. People would ask, “Should I run a Monthly Cycle?” and “How often should S&OP be done?” However, the best ability is to revise the plan and take action anytime S&OP is at risk. Through my past 25 years, I’ve reviewed 106 companies’ S&OP processes. The SINGLE best practice is doing What-If Simulations. Not the kind of simulations that your Stats PhD does over the weekend with his/her Access database, but doing What If Simulations during the S&OP sessions. That requires Speed and Integration with your process and solution. Speed can be best defined by a few Kinaxis prospects who attended our annual conference at Miramar (where Top Gun was filmed). Coming off the flight path after seeing the Kinaxis demo, these two certainly understood the need for speed… Integration can only come from a planning solution that pulls the data, policies and structures together, from all the nodes of the supply chain network, running concurrent planning at the S&OP to the MRP levels, in ONE code, not multiple Modules with massive middleware & excel. This is a customer who is very intense about the Kinaxis One Code… Standing inside the Bellagio, in the entertainment capital of the world, I know the IE Group attendees have been entertained, much beyond the standard S&OP sharing. Let me know your Four Key’s ranking. Where do you stand against the average? For now, I hope you’ve “learned and laughed”. Check out my slides below or on slideshare!