Forecasting ProcessForecasting ProcessSales and Operation PlanningSales and Operation Planning

AgendaAgenda

• Objectives of S&OP process

• Business Process Flow & status

• Forecasting Process

• S&OP Process

Objective of S&OP processObjective of S&OP process

• Accurate consensus projections of future business results

• Accurate information to customers, source point, and internal

organizations

• Coordinated action plans to ensure demand and supply are aligned

• Execution on business process integration model to ensure alignment

between business management, innovation management, customer

management & SC management

Business Process FlowBusiness Process FlowStrategic Plan

NO

Annual Plan

Demand Plan

Import Plan

Sales PlanFinancial Plan

Detail Operation

Delivery

Sales & Operation Planning

YES

Forecasting ProcessForecasting Process

Forecast ObjectiveForecast Objective

• GET ONE SET of figure that reflect real demand in market

• Improve forecast accuracy

• Reduce cost (w/o, WH, inventory…)

• Improve stock availability (including promotion, NPD)

• Improve Customer Service

Supply chain flowSupply chain flow

Sourced point

Dumex VN Distributors

Sub-distributors

Primary sales

In-market sales

Stock transferingCurrent

Trade

Unconstrained demand with factors from trade and internal activities

14 days

14 days

28 daysincluding GIT

Ordering

Forecast Process flowForecast Process flowHistory Sales

NO

Take out promotion,pipeline, OOS

Cleaned History

Baseline forecast

Pre-Demand Plan

Consensus Unconstraint Demand

Level, Trend

Forecast Meeting

YES

NPD plan (pipeline, running rate,

launch date, cannibalization).

Promotion Plan (incremental, period,

cannibalization)

Actual Sales

Forecast accuracy improvement

Market growth Company market sizeCompany positioning

strategy

Competitor activities

Corrected Forecast + Promotion

History(Including a Promotion)

Past Future

Corrected History Baseline Forecast

Cleaned Historical DataCleaned Historical Data

Baseline + Incremental

Units

Time

Statistical forecast

Sales lost in anticipation of promotion

Sales lost because of stock buildduring promotion

Incremental sales gain during promotion

=-

NetGain

Promotions – Promotions – before and after period should be taken into considerationbefore and after period should be taken into consideration

Forecasting data & ownershipForecasting data & ownership

Forecast data Ownership M0 M1 M2 M3 M4 M5 M6 M7 M8 M9 M10 M11 M12 M13

Baseline Planning Manager firmed                        

Promotion MKT/Sales Manager firmed                      

NPD MKT Manager firmed                

Pre Demand Plan Planning Manager firmed                        

Consensus Unconstraint Demand

Forecast Meeting Members Firmed                        

Process Planning Manager                            

Forecast data: Sales in market (IMS), by SKUs level, by Distributor & Nationwide with UOM in carton, ton, VND • Sales is ownership of forecast data M2-M4 • Marketing is ownership of forecast data M5-M13• Supply Chain is ownership on forecasting process

Forecasting MeetingForecasting MeetingObjectives:Primary: A forum to get consensus on one set of figures that reflects real demand in the market which is unlimited by supply constraint and independent from target.Others:• A forum to review previous month forecast error, causes of exception and key lessons learned for continued future forecast improvement.

Schedule Weds of W2Rules Review Pre-demand plan and do homework before the meeting Change only if significant Ensure to reflect all promotion activities timely in the plan. Own demand plan. Own forecast accuracy.

Attendees Trade Marketing Manager National Sales Director Planning Manager / Customer Service Manager SC Director MKT Manager

OutputPrimary: 12 months agreed unconstrained demand plan report for supply plan and financial review. Agreed pipeline, quantity & timing for product launches Input for S&OP

InputPrimary: Pre-demand Plan from Demand Planning NPD Volume Forecast TemplateOthers Operation Plan from Trade Marketing/Marketing Sales Bottom Up from channels Last Month Forecast Accuracy Report

Process Owner: Supply Chain Director

Roles Expert adviser on trade issues, decision making Owner of total demand plan to achieve the company target Chairman of meeting/Expert adviser on statistical model Owner of process Owner of promotion/NPD in related brands

Meeting Owner: Planning Manager

Sales & Operation Planning ProcessSales & Operation Planning Process(S&OP)(S&OP)

“S&OP” is a Process lead by Senior Management that, on a monthly basis, evaluates revised, time-phased projections for supply, demand, and the resulting financials.”

What is S&OP?What is S&OP?

S&OP OverviewS&OP Overview

Outcomes

• Planning processes are linked and synchronized• All functions have aligned incentives• Operations capacity is efficiently used• Operations has flexibility to minimize cost of goods sold• Reduced uncertainty

• Higher asset utilization with appropriate capacity• Lower operating costs due to better communication• Improved customer service• Higher revenue• Opportunities identified• Improved stock turns

Demand Supply

Customer Actions

Key AccountPlanning

TradePromotions

ConsumerPromotions

CompetitorActions

ForecastsOptions

Lead Times

Mfg.Capacity

Constraints Scheduling

CustomerServiceGoals

DistributionCapacity

Constraints

Risks & Costs

Flexibility

Anticipation

Risks & Costs

Stock & Funding Policies

Sales and Operations Planning is a process that balances demand plans and supply constraints proactively.

Objectives:Primary: Ensure planned supply meets Demand plan as much as possible Agree decision when supply can not meet demand Discuss company stock & supply operation issue Review & Ensure target achievement

Attendees MD National Sales Director SC Director Planning Manager / Customer Service Manager MKT Director, Marketing Manager Financial Director

OutputPrimary: Agreed demand, supply, capacity, inventory actions Confirmation on gap (if any) between current plan and target for action plan Agreed sales plan (Sales in market) Agreed financial plan (Sales to market)

InputPrimary: Confirmed supply meet demand plan. Propose option to meet demand plan Propose capital Expenditure investment plan Confirmed supply response to short notice ProposalOthers NPD & Promotion Plan Stock situation

Schedule Fri of Week 3 Time horizon: next 12 months. Focus M2-M6

Rules • Circulate agenda before the meeting.• Use standard presentation format.• Highlight big issues.• Mandatory meeting (supported by the Board).• Review actions from previous meeting.• Agenda owner leads the topic of discussion• Minute of action written by action person

Process Owner: MD

Roles Chairman/ensure actions are reach on demand and supply issues Provide sales insight & agree on proposed plan Meeting owner & facilitator

Provide brand development plan & agree on proposed plan Provide agreement/comments on financial aspects on issues discussed

Meeting Owner: SC Director

S&OP MeetingS&OP Meeting