Sales forecasts are nothing new - so why all the excitement around sales and operations planning (S&OP) now?
That's the question behind our most recent SCM Q&A with Reveal’s Joseph Grobler, a speaker at SAPinsider’s Supply Chain Bootcamp. Joseph took questions from our audience in a live discussion thread on developoing S&OP processes using SAP ERP systems, just a few days before our summer Bootcamp kicked off in Chicago.
You can review all the discussion in our Forum archives, or read the transcript here:
Allison Martin, moderator: Welcome to today's SCM Forum . Today, I’m very happy to be joined by Supply Chain Bootcamp speaker Joseph Grobler of Reveal, here in the SCM Forum thread to take your questions on sales operations & planning with SAP ERP.
Joseph is a Senior Partner with Reveal, and always gets rave reviews for his sessions at Supply Chain Bootcamp.
Welcome, Joseph, and thanks for joining us today!
Joseph Grobler: Good to be here, thank you!
Scott Etkin: What reporting options do you recommend for executive-level S&OP reporting?
Joseph Grobler: Two catogories of reporting work: one is referred to as health check and the other is referred to as value check.
- Health check are the exceptions like forecast deviation, customer backorders, missed sales, etc
- Value check are the value drivers regarding revenue, profit, inventory, etc ..
When ATP is applied then another important measure is how far out ATP pushes the confirmation out.
sheaMatt: I know one section of your session covers governance of S&OP processes in some detail.
Can you give a couple of examples of how governance can prevent forecasting errors?
Joseph Grobler: Governance emsures a global standard which is where integration comes into the picture. Governance ensures that exception management works as intended, which has a direct impact on inventory.
Lack of proper integration will inflate inventory.
Never before has customer service been so important. S&OP helps especially where organizations are growing into the global market where even manufacturing introduces long lead times and an increased number of touch points.
ACBM: What is your view on the new SAP tool just about S&OP? You know that ther was a gap on the SAP end to end solution on providing something specific for the S&OP process.
Do you think that tool is only applicable for companies that have a mature S&OP process?
Joseph Grobler: Remember SAP will always deliver more technology if the market calls for a solution. What you will find is that a mature process does not need additional functionality. Reveal has helped clients put in global integrated S&OP using ECC functionality only with flexible planning
ACBM: I wanted to know what is your view about the benefits that this tool can bring to the companies if they decide to have the tool implemented to help them with their S&OP process, meetings, etc...
Joseph Grobler: The tool definitely guides the monthly S&OP cycle which mony organizations are able to do without the tool.
WilliamTupy: We have multiple warehouses each carrying like inventory (same sku's) but production doesn't see a global view of inventory. Can a global view be accomplished through S&OP?
Joseph Grobler: Remember S&OP is the strategic planning functionality and not the tactical side of the supply chain, where inventory resides. Cross-plant visibility belongs in your analysis tools and reports like BI, BW, LIS, and even stock overview
victorbishop: Hi Joseph,
How do you differentiate between traditional sales forecasts and S&OP?
Joseph Grobler: Traditional sales forecasting is very one sided and does not necessarily take business objectives into account.
It definitely does not take capacity constraints into account which is why S&OP is so powerful in comparison.
S&OP also draws the executives of the business into the decision making. This is huge.
Victorbishop: Thank You!
Bette Ferris: Hello, Joseph.
Do global supply chains benefit more from an S&OP process than a single site organization?
Joseph Grobler: Global supply chains are way more motivated because S&OP makes a huge difference when dealing with global growth challenges when it comes to increased touch points along the supply chain. ROI takes a lot longer to materialize.
Single-site locations quickly overcome the challenge in change management and see ROI sooner.
SheaMatt: Hi Joseph,
How can customers prevent forecasting errors when working with a non-SAP solution and working outside of S&OP? Thanks!
Joseph Grobler: Well, that a tough question to ask someone who believes everything should happen inside SAP for the sake of better integration.
Forecast errors are a part of the day-to-day order entry, it will never go away. It is possible through daily management of exceptions to the forecast where over and under consumption of the forecast is controlled.
ATP is also one of the powerful tools which helps us make a promise and then keep that promise to our customers.
SheaMatt: What would be an ATP use case?
Joseph Grobler: ATP is the other end of MRP. Without an effective ATP a supply chain's integration will never happen. ATP's role is to promise a future date if we do not hold inventory at the time of firmed customer demand. Once you promise a future date then MRP in supply must work to meet that date.
This is all dependent on carrect master data which feeds ATP, as well as everyone in the supply chain doing what the system expects regarding quantity and on-time delivery in the stock requirements list.
Andrea Haynes: Hi Joseph -
What are some good techniques for leveraging SAP ERP to help better generate S&OP that accurately reflect supply chain constraints?
Joseph Grobler: Standard SAP ECC has very capable tools to do standard and flexible planning as part of the S&OP.
The hard work comes in clearly defining the product planning hierarchies and the level at which the plan will be maintained. With S&OP the system part is less than 30% of the effort.
The hard work comes in the S&OP routines that include new product introduction, demand planning, supply planning, and executive approval.
Allison Martin: Thanks to all who followed the discussion today!
A transcript of all the questions will be available here in the SCM Forum and posted on Insider Learning Network.
For those of you who registered for today’s Q&A, you were also able to review some take-home content from Supply Chain Bootcamp, normally only available to attendees. We hope to see you at our fall Bootcamp session this November, in Las Vegas.
Finally, I want to thank Joseph Grobler of Reveal for taking the time to join us today. We'll see you next week at SCM Bootcamp in Chicago. Thank you, Joseph!