8/18/2019 S&OP - Glide path
1/4
Key area Key Sub-set Key Question Reacting Anticipating
Collaborating Orchestrating
1.1 Process GoalWhat istheGoal ofthe processand howarethe
rolesdivided? (RACI)
The processgoal isto developan operationalplanto cover supply
to
fulfillcustomer ordersand forecast, whiltsminimizing supply
disruptionsandoptimizing (finishedgoods)inventory levels.
Rolesand responsibilities(RAC)in the !"#$ processare unclear
and
there islimitedalignment
The goalof the processis tobalance !upply and%emand basedon
the best volume forecast (isovalue).#ptimizing both
component
and(semi&) finishedinventory levels.
Rolesand Responsibilitiesofthe involvedfunctionsare clear
and
eachfunction ownstheir part ofthe process.
The goalis toalign cross&functionalprocessesin support
ofthe
operating strategy to ma'imize opportunity, customer
satisfaction
whilst mitigating costs, by identifying rissandopportunities,
value
andprofitabilty.
Rolesand responsibilitiesare clear at alllevelsof the
organizationand
there isseamless collaborationacrossthe functionsandteams.
The goalisto have the commercialplan built
onnd&to&nd(and
cross&functionally aligned)insight ofrissand
opportunties.The
businessanticipateson andplans for *ser and!hopper demand.
Capacity isbased onthese insightsandare adaptedaspart ofa
continuousprocessof maing trade&offsbetween profitable
growth
and utilization
1.2 Rewar Organi!ationHowis thenecessarybehavior beeninfluenced
by
measures
+oclear measuresof successare in place neither individually nor
as
ateam
ndividualmeasuresare inplace andpeople-sperformance is
measuredagainst these
!haredmeasures and$s are alignedwith the !"#$ process,
however the individualperformance system ($$/) ismeasured
against individualtargets.
!haredtargets, basedon the businessmodel, are inplace
whichare
part ofour annualappraisal. These are continuously
reviewedas
part ofthe !"#$ process
1." S#OP$etricsWhat arethe !I"sdefined and tar#et beenset
for
thethe $%&!process?
very functionand organizationwithinthe !"#$ processhasuni0ue
$-swhich are be alignedwith eachother.+o common!"#$ metrics
are inplace.
&see 0uestionnaire for e'amples
Ancommonset of$-sfor the !"#$ processhasbeenagreedwith
allparticipating functions These are focusedon
(finishedgoods)
inventory management !ales#rganization!ervice leveland (!*)
1orecast accuracy
$sand targetsare cross&functionally aligned, aswell asthe
bonusses
that are connectedto these targets.Thisaligment drivesa
collaborative approachtowardsshared goals.
The targetsare differentiatedbased onthe businessmodel
specificsand ranedaccording importance.Alignment, ownership
andreward against these targetsis basedon 2nd&to&nd2
defined
businessprocesses
1.% S#OPResults'hereis clearand wideunderstandin# ofthe
$%&!
process valueadd and results
t isunclear tothe organizationwhat the resultsof the !"#$
process
are
Resultsof the !"#$ processare visible tothe
('&functional)
organiationas3 4etter 1orecast, 5ower inventories, higher
customer
The resultsofthe !"#$ processcontribute toimproveed new
product
introduction(+$), higher revenue andincreased profitability.
Alignment ofthe organizationand supply chainthroughimporved
!"#$ helpsthe businessto leverage the opportunities
2.1 S#OP$eetings
What content isdiscussed inthe $%&!meetin#s
whoare theparticipantsand howare decisions
beenmade
5ong andlaboriousmeetingswhere ey decisionmaers are often
absent andthe focusis onvolume for the ne't month
!hort term (upto ne't 6 months)focussed meetingsgeared at
ensuring assetsare alignedto meet the (ordered)volume and
value.
!hort, crispand focussedmeetings withclear agenda-sin which
volume andvalue upto 78 monthsout are assessedtogether
withthe
rissand opportunities, basedon maret andcustomer insights.
!trategic decisionsare made andparticipationof the
re0uiredlevelis
high.
The !"#$ meetingsreview the fullprofitability
implicationsfrom
the value andvolume demandplannd&to&ne, basedon upto
79
monthshorizonand mae conscioustrade offsfrom commercial
organizationstosupply centers.
* !rocessAli#nment 'owhat e+tend arethe involved
functionsali#ned
inthe decision,ma-in#?
!"#$ ise'ecutedon factory and:or commercial(country) level.
%ecisionsare alsomade onthislevel.
!"#$ isdone across the entire supply chain3 from commercial
organisationsto!upply (;4*:R4*)units witha dominant focuson
achieving budget:A#$ for eachorganization individually
!"#$ ise'ecuted onthe levelthat isoptimal (regionalor
global)for
the businessacrossc ommercialorganisationsand supply
unitswith
clear focusonintegralprofitability andcutomer
service.Trade&offs are
made suchthat the resultsfor total company are optimized.
!"#$ isoptimizedacrossnd&to&nd value
chains.%ifferentation
taesplace according tobusiness&:operating model.1ocus on
creating value andprofit inentire chain
.inancial Ali#nment/Howare theoperational viewand financial
viewbe
ali#ned?
!"#$&planand Rolling 1orecats(R#1#) are separate
plansand
processesto establishthese not aligned
!"#$ isthe basis for the rolling forecast (R#1#), however
ad6 :> ? C on si st en t 7 8 m on th s ro ll in g f or ec as
t
*1 2 e ci si on 3 a- in # H ow a re d ec is io ns b ee n ma de i
n th e $% &! p ro ce ss ?
%ecisionsin meetingsare made inan unbalancedway3 2The most
vocalperson inthe room2.The !upply team decideson the supply
volume per !* toenter inthe system andthe decisionmaing
dependson2how we are performing2
The commercialorganization2owns2 the forecast:demandplan in
volume andvalue the operating unitsdecide uponthe production
andinforms the commercialorganisation
4asedon the demandplan, across&functionalteam maesthe
decisionto correct the businessplanwith clear corrective
actions
towardsthe $s.
Allfunctions are e0ualpartnersin reaching consensusaround
actionsto improve salesandprofit performance basedon the
latest
!"#$ forecast, over aminimum of78 months out ,including
if
necessary capacity aduality
/easure of the 0uality ofthe Commercial!toc on
handin the $hilipswarehouses.This toindicate the
0uality ofthe inventory and highlight potential
obsolescence ris ('cess"Aging stoc)
JG 6G to JG *nder 6G 7G
nventory %1!
Tocompare Total!toc withfuture %emand(on
Co!)and translate it into%ays. Tobe comparedwith
capability of!upply Chainon4;:Category 5evel.
T4A &/E;
nventory Turns Bow often the inventory is sold:used. T4A &
/E; toK
5ead&time @e want to measure our turnaround speed
Consistency @e a chi eve th i s l evel o fp erforman ce HIG o ft
h e t i me @e a chi eve th i s l evel o fp erforman ce HIG o ft h e
t i me @e a chi eve th i s l evel o fp erforman ce HIG o ft h e t i
me @e achieve thislevel ofperformance HIG of the time
$etrics
/easure of the store:product availability against an
agreedlisting
A$R&Gartner$aturity Gri
1.Goal
$aturity 4e*els
Peror+ance le*els that lea to e)cellence 0ote5 nee to be
custo+ise per business3
6or'ingCapital
$anage+ent
*.unctional
ali#nment
".Process
