September 9-10, 2010 InterContinental Hotel Boston, Massachusetts

1. IE Group Sales & Operations Planning Summit Sales & Operations Planning: Beyond the Basics September 9-10, 2010 InterContinental Hotel Boston, Massachusetts Bob Stahl www.RAStahlCompany.com www.tfwallace.com

2. With apologies to Charles Dickens . . . • Worst of Times . . . These are perhaps the worst economic conditions in a generation or two . . . and it may get worse. • Best of Times . . . For those who choose to use them, we have terrific tools in our hands today to deal with the uncertainty!

3. Beyond the Basics . . . • Basics • Volume Balance • Gross Revenue Projections • Simpler & Better Tools • Market-Facing Family Forecasting • Simplifying Data Assumptions about MIX • Rapid Simulation & What-If Analysis • Full Financial Integration (P&L and Balance Sheet, etc.) • Beyond the Basics • Strategic Planning • Scenario Analysis with Financial Consequences • Risk Management including Cash Flow & Capital Investment Top Management’s Handle on the Business

4. ‘The Books’

5. Heavy Lifting The Executive S&OP Process Step #5 Executive Meeting Decisions & Game Plan Step #4 Pre-S&OP Meeting Conflict Resolution, Recommendations & Agenda for Exec. Mtg. Step #3 Supply Planning Capacity constraints 2nd-pass spreadsheets Step #2 Demand Planning Management Forecast 1st-pass spreadsheets Creates a Disciplined Rhythm Step #1 Data Gathering Sales Actuals, Statistical Forecasts & Supply Actuals End of Month

6. Beyond the Basics . . . • Basics • Volume Balance • Gross Revenue Projections • Simplified Tools • Market-Facing Family Forecasting • Simplifying Data Assumptions about MIX • Rapid Simulation & What-If Analysis • Full Financial Integration (P&L and Balance Sheet, etc.) • Beyond the Basics • Strategic Planning • Scenario Analysis with Financial Consequences • Risk Management including Cash Flow & Capital Investment Top Management’s Handle on the Business

7. Multiple Views . . . Market View Customer View Historical View Reconciliation Process (The DAM Meeting) Consensus Forecast Applying “Puts & Takes” Company Forecast

8. Assumption Sensitivity Simplifying Data Assumptions . . .

9. An Example . . .

10. Fiscal Information . . .

11. Beyond the Basics . . . • Basics • Volume Balance • Gross Revenue Projections • Simplified Tools • Market-Facing Family Forecasting • Simplifying Data Assumptions about MIX • Rapid Simulation & What-If Analysis • Full Financial Integration (P&L and Balance Sheet, etc.) • Beyond the Basics • Strategic Planning • Scenario Analysis with Financial Consequences • Risk Management including Cash Flow & Capital Investment Top Management’s Handle on the Business

12. “Strategic Planning . . .forward in reverse” Annual Business Plan Executive S&OP Doing The Right Things Strategy Executive S&OP Robert Hayes HBR-Nov/Dec 1985 Strategic Planning - forward in reverse Tactics Doing The Things Right Master Schedule Execution

13. Widgets Two Scenarios: Supply Leveled against Consensus Demand Supply Leveled against High Demand

14. Consensus Forecast

15. High Forecast

16. Gross Revenue – High Forecast 16

17. Direct Margin – High Forecast 17

18. Center of Gravity . . . Customers Desired Force = Centripetal Natural Force = Centrifugal Executive S&OP Owners Employees (Suppliers, Community, Country, Planet)

19. Phase III Financial Integration Phase II Expansion Phase I Pilot Demo Path of Success . . . Live Pilot Demonstration Go/No-Go #2 Business Improvement Kickoff Session Low Cost Low Risk High Impact Quick Results 1 2 3 4 5 6 7 8 9 Months Executive Briefing Go/No-Go #1

20. Done Properly . . . Simpler (Not Easier) Better (in 90 Days!!!)

21. Good Luck & Thanks for Listening Bob Stahl 508-226-0477 RStahlSr@aol.com www.RAStahlCompany.com www.tfwallace.com