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Sales & Operations Planning

Sales & Operations Planning. Kevin Pegels – Oct. 9, 2012. Introduction – Kevin Pegels (Kevin.Pegels@bayer.com). Work History: 3/2011 – Current: VP SCM Bayer Healthcare-Biotech 3/2009 -3/2011: Sr. Director SCM Bayer Healthcare – Medical Devices

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Sales & Operations Planning

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  1. Sales & Operations Planning Kevin Pegels – Oct. 9, 2012

  2. Introduction – Kevin Pegels (Kevin.Pegels@bayer.com) Work History: 3/2011 – Current: VP SCM Bayer Healthcare-Biotech 3/2009 -3/2011: Sr. Director SCM Bayer Healthcare – Medical Devices 6/2004 – 6/2009: Sr. Director SCM Clorox Company 6/2002 – 6/2004 – Director SCM Levi Strauss & Co. 6/1997 – 6/2002 – Director SCM in CPG Industry Deloitte Consulting 6/1988 – 6/1995 – Manager Clorox Company Education: 1997: MBA Harvard University 1988: B.S. Chemical Engineering Cornell University Certifications/Publications CPIM Certified Published in Harvard Business Review & Supply Chain Exec. Board • Presentation Title • Date

  3. Agenda S&OP – quick definition S&OP at Bayer Healthcare-Biotech S&OP – how to secure Sr. Management support Q&A

  4. Sales & Operation Planning - General

  5. S&OP Process Key Principles Customer First • Key objective of process is to deliver optimal service to end customers/countries and meet commitments to the Business • “One” demand forecast drives financial and supply chain planning. Budget forecasts and S&OP forecasts should be “aligned” at each quarterly RF update.. • Identify potential risks/challenges early and develop contingency plans as required • Need to make timely decisions based on solid analytics and be committed to decisions. • Single source of the truth, data visibility and decision rationale clear across the organization • Clear to organization that S&OP process improves performance and adds value (KPIs) Single Forecast Be Proactive Decision Making Transparency Proven Process

  6. STEP 5 Executive Meeting STEP 4 Pre-Executive Meeting STEP 3 Supply Planning (Production Scheduling) Communication / Verification STEP 2 Demand Planning (Supply Network Planning) KPI Review, Business Review, Capacity Review, Regulatory Review, Resolve escalation topics Affiliate KPI Review, Capacity review, Launch Review, Identify escalation topics STEP 1 Data Gathering (APO) Last Thursday of every mth. Thursday before Step-5 meeting Saturday-Sunday Tuesday-Thursday Weekly Monthly Monday-Tuesday Biotech S&OP Process by MajorProduct Line Highlights: S&OP process is co-owned by Supply Chain and Commercial Organization S&OP process integrates weekly and monthly planning Forward looking, normally 0-18 months Focused on delivering KPIs, aligning supply/demand, and resolving business issues Implemented in less than 6 months

  7. S&OP – how to secure Sr. Management Support Develop and “Sell” Business Case: improved customer service, reduced inventory, reduced scrap, and aligned supply and demand to support business growth Leverage improved forecast accuracy as critical metric and link to strong S&OP process Cross-functional nature of process and shared process ownership among commercial and supply chain requires Sr. Management leadership Leverage industry benchmarks and best practice case studies Secure top Sr. leadership who can drive ownership top down through the organization

  8. Typical S&OP Benefits Global S&OP process has driven substantial benefits over the past few years Excess/low shelf life inventory is decreasing Inventory DOH are decreasing In addition, customer service for the US and Europe has been above 98% target level in 16 out of past 18 months

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