Managing Automation - March 2008 - (Page 36)

[ TRANSFORMATION ] Transformation Integration TechWatch Industries ness plan calls for a sales boost in March, and in that same month the company launches a new product without adding sales staff, the business plan isn’t grounded in reality. “For S&OP to work well, management’s got to give a lot of value to realism,” Dougherty says. “They’ve got to accept when somebody says, ‘No, we don’t think we can do it; we can’t meet the original plan Here’s what we need to do or here’s what we need to spend to get back on plan.’ ” Research shows that manufacturers haven’t yet warmed to the expanded process. Only about onefourth of respondents to a recent Ventana survey identified consolidated planning as the goal of S&OP. But top-performing companies are doing just that, experts say, and it’s only a matter of time before the masses follow. Besides Excel, a number of software tools can help streamline the S&OP process, including forecasting tools, advanced planning and sched- uling (APS) systems, and business intelligence offerings. However, most experts — even the software vendors themselves — concede that there is no such thing as a fully capable S&OP software suite. Paul Hoy, director of manufacturing industry solutions at Cognos Inc., believes that no vendor can say, “Here’s your S&OP module. Push the button and it calculates it.” But software can help align data from sales, operations, and finance, he says, and that can lighten the workload demanded by S&OP and produce more reliable data. BEST PRACTICES Cognos chose to approach the process via “blueprints,” which Hoy describes as S&OP best practices translated into pre-built data models, reports, and workflows. The vendor has released two — its main S&OP blueprint and a second that addresses the executive review. The blueprints draw data from a manufacturer’s Cognos Planning or Cognos 8 system to build a demand plan. Users can run analyses of specific scenarios to predict the impact on constraints, plant capacity, worker resources, or materials, for instance. Applications juggernaut SAP used its NetWeaver infrastructure to create xApp Sales and Operations Planning, which helps SAP users integrate data and tools for S&OP, manage and track the process, and present user-based views of data. For its part, software provider Steelwedge Software has embraced the ubiquity of Excel and made it the front end of its S&OP automation offering. “Our view is, people are not going to learn new software,” says CEO Glen Margolis. “You’re not going to get, especially, the casual users to log on to something new.” Among other functions, the Steelwedge product sends e-mail to S&OP stakeholders, such as sales managers, capacity planners, and procurement specialists, to solicit their feedback — such as, a big order will likely slip, there’s a looming labor shortage at Plant X, or the cost of raw materials is dropping. The software incorporates that data into the master record that governs the S&OP process and helps the manufacturer make planning decisions. In addition to Steelwedge, SAP, and Cognos, leaders in S&OP-focused software include Logility, Oracle (through its Demantra and Interlace acquisitions), Demand Solutions, AspenTech, i2 Technologies, Adexa, Supply Chain Consultants, and Symphony-Metreo, according to experts. Dougherty acknowledges the growing interest in more advanced software, but says the 13 bestpractices companies in his book and almost all of his clients over the years have taken data from o expertpinions S&OP BASICS Sales and operations planning has been around for more than 20 years, but only a small cadre of manufacturers perform it with panache. Here’s some advice from the experts on getting your company into the club. GET A SPONSOR: “It starts with the CEO — or certainly the very senior management of the company — in very obvious and visible support of the process.” — Paul Dittmann, director of the Office of Corporate Partnership at the University of Tennessee PUT THE WORK PROCESSES IN PLACE: “I think the largest challenge and one of the critical success factors is that process-related work.” — Paul Hoy, director of manufacturing industry solutions at Cognos Inc. BE REALISTIC: “Rather than being realistic and promising what you can promise, in trying to be everything to everybody, you end up being 10% off to everybody and everybody’s a little [steamed].” — John Dougherty, principal at Partners for Excellence and coauthor of the book Sales and Operations Planning — Best Practices INCLUDE NEW PRODUCTS: “That requires some cross-functional planning capability [sales, marketing, etc.] and requires that integrated planning platform where those plans are visible and you’re in sync.” — Colin Snow, VP and research director of operational and supply chain performance management at Ventana Research WORK TOWARD GOOD DATA: “The whole notion around master data governance is critical. And, conversely, the “garbage in/garbage out” problem of poor data integrity is nowhere more severely felt than in S&OP processes.” — Steve Hochman, research director, AMR Research CONNECT BACK TO THE FINANCIAL PLAN: “It’s these innovators who’ve figured out that the place where S&OP is growing and needs to grow is in its ability to connect with financial reporting systems.” — Snow STAY AGILE: “It’s more important how you react to reality than it is what you plan for.” — Mark Payne, vice president of worldwide operations, systems, and processes at Linksys JUST GET STARTED: “Hopefully, at some point in the future, you’ll have this beautifully aligned, integrated system, but that’s no reason for saying you can’t do S&OP because you don’t have the data easily accessible and able to be rolled up. That’s just not a good excuse.” — Dittmann ma March 36 2008

Table of Contents Feed for the Digital Edition of Managing Automation - March 2008

Managing Automation - March 2008 Contents Take 1 Mailbox Mitsubishi, IBM, and ILS Team Up to Make Integration Easy for Automakers Former Agile Exec Takes the Reins at Arena Solutions The Next Phase for 2006’s PM Award Winner Integration Firm Boomi Redesigns for On-Demand Ex-Wonderware Chief Takes Helm at Apprion Notes Cover Story: A Rare Breed Special Report: Where are Control Architectures Heading? Transformation: Back to Reality Integration: Getting Standards Under One Roof Industries: The Quest for the Perfect Order Product Scan Advertiser Index Next

Managing Automation - March 2008

For optimal viewing of this digital publication, please enable JavaScript and then refresh the page. If you would like to try to load the digital publication without using Flash Player detection, please click here.