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Sales and Operations Planning

Sustaining Performance after Implementation

Brad McCollumSr. Manager, Materials Planning and Logistics

Ned FinchSVP, Global Supply Chain & Lifoam Operations

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Agenda

• Introductions

• A little about Jarden and Jarden Home Brands

• The History of Our S&OP

• Symptoms of a Degrading Process

• Keys to Maintaining Quality

• Questions

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Jarden: The brands of everyday life

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Jarden: The brands of everyday life

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Jarden: The brands of everyday life

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Functional Structure - 4 Business Units

Fresh PreservingFresh Preserving

Casual EntertainingCasual Entertaining

FirelogsFirelogs

Recreational Recreational ProductsProducts2009 2010 2011

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OUR Success

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Demand: Market Facing Families…

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2003-2007: Family Level Demand

Normal Mfg

Capacity

Max Mfg Capacity

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Probably Not

2008

2nd Lowest JUN in 6

Yrs

Just another year…

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The Results…

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Significant Increase in Sales

2009

ES&OP Kick-Off

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Reduced Cancellations due to Product Availability

~ 50% Reduction with

Significantly Higher Sales

Before S&OP After S&OP

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Significant Cultural Benefits

Alignment of Human Energy• Elimination of the silos• Cross Functional Education

Dials are Connected• Tactical Execution of Strategic Plans• Risks Decisions are Made at Right Levels

Inclusive Business Management• S&OP Team Owned the Sales Forecast• S&OP Team Owned the Production Plan• S&OP Team Owned the Process and Deliverables to the Exec Team

Conflict Resolution• S&OP Requires Conflict, but also Provides a Forum and Process to Management it

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The Challenge…

Sustaining that Performance over time…

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Where problems occurred…

Month End Data

Gathering

Demand Alignment

Supply Recommend

ations

Integration

Exec S&OPMeeting

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Cracks in our Foundation

Data Conversion Issues• New Items improperly equalized• Items Missed/Not Maintained

Late Deliverables• Sliding Dates• Expanding Calendars (“I just need more time”)

Changes Occur without Confirmation• Tool Formats Change• Sources Change• Horizon Change

Quality Issues Creep into Process• Loss of Confidence in Supporting Data

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The Solution

Continuous Quality Assurance• Deliverables should be checked every cycle prior to their entry into the

process• Track Changes Cycle over Cycle

Corrective Actions have to be Immediate and with Priority• Remember that this Data supports business critical decisions

Drive Ways to Make this Process Bullet Proof • Eliminate sources of error

Maintain a Path for Confirming Process Change• Better and more efficient ways are expected as part of the process, but still

need to be confirmed by the team

Keep up with Adjacent Changes• S&OP support needs to be part of adjacent systems design/change

considerations

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Month End Data

Alignment

Demand Alignment

Supply Response

Integration

Exec S&OPMeeting

Where the problems occurred…

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The Fundamentals of Demand Alignment

Demand Alignment

Mar

ket

Cust

om

er

Histo

ry

Reconciliation of Opposing Views

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Shortening Horizon

24MonthsTime

MIX VOLUME

Sales CallSales Call

Volume/Marketing CallVolume/Marketing Call

Planning Time FenceReconciliationConsensus Demand

Consensus Demand

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Loss of Top Down Perspective

THEORIES

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Bias and Error

BIAS

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Other Symptoms

Demand Alignment Meetings become shorter and shorter• The Reconciliation of Opposing Perspectives requires debate

Demand Alignment Meetings Attendance Suffers• Key players begin to decline/no show

BIAS Becomes Apparent• Prolonged Bias Results and becomes difficult to address• Supply begins taking bias into consideration

Eventually Real Alignment isn’t really happening• Error Increases without the value of the discussions required to gain alignment• The value and importance of Alignment erodes• Demand Team Members disconnect from the process and if deliverable

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The Solution

Never Loose the Three Legs• Retain Rigor around bottom up forecast within the Planning Time Fence• Top down is more art than science – It is the quantification of theories that are

relevant to the category

Don’t let up on basis Meeting Management• Attendance• QA of Deliverables

Track and Monitor Bias and Error• Improvement should be the basis for comparison

Set and Pursue ContinuousImprovement Goals

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Month End Data

Alignment

Demand Alignment

Supply Response

Integration

Exec S&OPMeeting

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Design Objectives:

Highest level possible based on agreed upon market drivers

Grouped based on how capacities are constrained

Proven Assumptions that allow demand to be applied to supply

groupings

Market Facing Product Families

Market Facing Product Families

Supply GroupingSupply Grouping

Reasonable AssumptionsReasonable

Assumptions

Product Groupings:

Reasonable Assumptions Change

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Monitors Get LostR

un Charts for each S

plit

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Capacities and Productivity Change

WC1WC1 WC2WC2 WC3WC3

WC4WC4 WC5WC5 WCNWCN

Individual Capacities - Scheduled

Capacity GroupingCapacity Grouping

Rough-Cut Capacity

WC4WC4

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The Solution

Rigor Around Supporting Monitors• Make Run Charts part of the regular Meeting (i.e. Assumption Models)• Pursue Ways to Bullet Proof and Automate Monitors

Educate New Players on the Key Behind the Scenes Controls• As your models Mature, these Monitors/Controls become more complicated

and difficult to hand-off/transfer to other resources

Aggressively Pursue Outliers/Bias• These assumptions are fundamental to your results

Monitor Adjacent Projects Impacts to S&OP Assumptions• Acquisitions• Plant/Capacity Modifications and Improvements

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Month End Data

Alignment

Demand Alignment

Supply Response

Integration

Exec S&OPMeeting

The Results

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Upstream Issues Create…

Last Minute Iterations before Integration and Executive Meetings• Last Minute Errors Found• Financial Integration show something totally off

Integration Meeting Content gives way to Reconciliation and Error checking instead of Substantive Discussion

Integration Meeting Attendance Dwindles• Same people you had in Supply Meetings

People Unwilling/Unable to Defend Perspective• Inconsistent perspectives exist• Backroom Discussions/Decisions

Ultimately, ES&OP Meeting Attendance Dwindles• Benefits begin to un-ravel

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Summary

Be vigilant with 1st Pass Quality with deliverables• Cracks in the Foundation damage the rest of the house• Don’t let the details fall to the way side…

• RUN CHARTS to understand when change is occurring

Continuous Continuous Improvement• It really does take constant pressure

Survey Regularly• Flag for degrading processes• Everyone is responsible for pointing out the need for corrective actions

Watch and Track Attendance• When attendance dwindles...something is wrong

Don’t Expect New Team Members to Just “Get it”• Onboard S&OP Participants and New Executive Team Members to the Process is

CRITICAL

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S&OP is Never Ending Continuous Improvement

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Questions?