2-minute read 

In the context of rapid business development and a growing supply network, Boehringer Ingelheim Biopharma acknowledged that they needed a more integrated planning approach to increase decision-making speed and planning responsiveness, and enable integral comparison of different planning trade-offs.

Target supply chain operating model

In order to design a fit for purpose integrated planning process, they took the important step to first define what their future mode of planning operations should look like. Following EyeOn’s standard approach for a target supply chain operating model definition, this entailed:

• Translation of strategic objectives and priorities to tactical planning principles
• Mapping of the value chain and key planning constraints
• Assessment of the planning processes and key decisions at different levels and horizons (strategic – tactical – operational)
• A review of the planning control model and required capabilities

Based on the target operating model design, a gap fit assessment was performed to determine the improvement priorities and define a supply chain transformation roadmap.

IBP process design and global implementation

To execute the transformation roadmap, EyeOn has been supporting Boehringer Ingelheim Biopharma with the design, implementation, and roll-out of an integrated planning process. Starting with local level S&OP, stepping up towards a global level executive S&OP, and maturing the process towards IBP with further financial integration and cross-functional collaboration.

From reactive to proactive planning

By growing their planning maturity Boehringer Ingelheim Biopharma has made big advancements to move from a reactive to a proactive planning process. In addition, their planning transformation has helped them realize the following planning benefits that enable better decision making and improvement of bottom-line business performance:

• Integration of processes
• Clear planning objectives
• Proactive planning
• Financial reconciliation
• One set of numbers

Curious about how EyeOn can help you redefine your supply chain operating model?

Contact our E2E transformation lead Bart Paridaen to learn how EyeOn can help you (re-)define your target operating model. Contact Pascal van den Boogaard to get further insights on the Boehringer planning transformation and integrated business planning.

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Currently, February 2023, ChatGPT is the talk of the day. The world’s most famous AI is known for it’s ability to answer nearly any question. Which made us wonder, can ChatGPT solve your sales and operations planning (S&OP) challenges?

What is ChatGPT?

ChatGPT is a language model developed by OpenAI. It’s a deep learning-based artificial intelligence system that uses the ‘transformer’ architecture to generate human-like text responses to questions or prompts. ChatGPT is trained on a large corpus of text data, allowing it to generate answers based on patterns and relationships it has learned from the data. It is designed to be used in a conversational context, such as chatbots or virtual assistants, where it can generate responses that are contextually relevant and coherent.  

Can you rely on ChatGPT to guide your S&OP process?

Our experts Freek Aertsen, Ieke le Blanc and Joost Rongen put ChatGPT to the test and asked over 100 crucial consultancy questions about S&OP. This ebook delivers you all the answers you have been waiting for. Download their ebook for free by clicking the button below. 

Visit this page for more information about S&OP, or directly contact Freek Aertsen, or Ieke le Blanc. 

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5-minute read 

Entering the year 2023, the global economy continues to stumble in the backdrop of the energy crisis among others. The current global energy crisis started post the COVID-19 pandemic in 2021 with a rebound in consumer demand. The geopolitical tension between Russia and Ukraine accelerated it with a global impact on shortages and increased prices in oil, gas, and electricity. The pain of the energy crisis is felt across all industries. The first wave especially hits energy-intensive businesses such as aviation, shipping, chemical, fertilizer, and aluminum industries. In the second wave, the soaring cost of energy is passed onto industries such as food and beverage, rubber and plastic. It’s a matter of time before end consumers feel the impact, ranging from the massive shutdown of France’s national treasure, the bakers, to common medicine shortages such as antibiotics and painkillers across Europe.

As a response to cushion businesses against the shock, we believe there’s a lot that can be done.

Energy crisis as an opportunity

On one hand, the energy crisis puts the financial performance of businesses to the test, particularly for industries that rely heavily on energy. However, on a longer-term horizon, businesses can also see it as an opportunity to transform to more independent and sustainable operations. Redesigning your supply chain planning and the ability to deploy the transformation is more relevant than ever, especially when it comes to improving sustainability. Accelerate the transformation!

Decarbonization and renewable energy

The shift towards decarbonization and renewable energy is a key driver of this change. In Germany, for example, the energy transition has been a prominent topic since the Fukushima nuclear disaster in 2011 and the subsequent decision to phase out nuclear power plants by 2022 has been on the agenda. Initially, this decision was driven by concerns about public safety and environmental risks. Later on, the shift was further accelerated by the geopolitical crisis since early 2021.

Sources have stated that the current energy crisis is the “first truly global energy crisis” that differs from any others before in its “larger, longer and broader scale”.

Instead of firefighting in times of a crisis that won’t end anytime soon, maybe businesses need to ask themselves the right question upon planning “How to act after we get hit?” As that famous saying goes,

“Everyone has a plan until they get punched in the face.” ― Mike Tyson.

Too often, businesses have those beautiful and flawless plans without foreseeing bumps along the way. In times of volatility and complexity, it requires a strategic and long-term approach to keep your businesses resilient and sustainable.

As a leading company in the field of planning, we do not claim to be energy experts. Nonetheless, much can be done in redesigning your supply chain planning to soften or even mitigate the current crisis and get ready for the future. Below we are highlighting two options to get you years ahead:

Supply chain planning network design

The energy crisis is putting pressure on supply, regarding both availability and the cost of goods. Material and energy availability is not a given anymore with transportation and distribution costs massively impacting financial performance. Global supply chains, which often single source from other continents, have shown their vulnerability.

Time-to-recover (TTR) and time-to-survive (TTS) analysis can help you determine weak links in your supply chain that cause large business impact on operational level. On a tactical level, continuous evaluation of sourcing and inventory strategies using scenario-based planning are measurements to consider as well. From a strategic perspective, re-assess whether your supply chain is fit-for-purpose.

Developing a resilient and sustainable supply chain is the obvious way to continued business success. But how to make such a future-proof supply chain reality? Our approach is summarized in 4 steps:

The above-mentioned 4-step approach towards future capability takes no longer than 4 months, after which the implementation of the future-proof supply chain can start.

In the shorter term, thinking in scenarios will guide to better decision-making, hence utilizing the available resources and optimizing the usage of capacity.

Integrated business planning (IBP)

Integrated business planning (IBP) is a process that leverages scenario modelling as its backbone. Despite many companies having implemented sales and operations planning (S&OP), only a few have fully matured into an IBP process.

In today’s uncertain business environment, it’s imperative to have contingency plans in place for different potential outcomes. Balancing supply and demand is a significant challenge for many companies, as pressure on financial performance and unreliable supply chains put a strain on their operations.

To overcome these challenges and take your S&OP process to the next level, you should consider three key aspects of IBP:

• Monetizing different scenarios to determine their potential impact on your business
• Integrating the scenarios into your IBP process for a comprehensive view
• Improving transparency and reducing latency using proper tools & data

Transitioning to IBP is a journey that requires support from all levels of your organization and perseverance. Driving your business in a truly integrated manner, will lead to improved decision-making and business performance.

Comprehending the impact of the current energy crisis on supply chain design and taking proactive measures with integrated business planning to mitigate risks and seize opportunities can lead not only to survival, but allows your business to thrive in the transition towards a more sustainable future.

Want to learn more about supply chain network design? Contact our expert Pascal van den Boogaard or sign up for our free webinar on March 30! Explore our website or reach out to our expert Pascal van den Boogaard for more insights regarding IBP!

Remember to keep an eye on this page where we will address further supply chain challenges you will be facing this year.

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When AkzoNobel chose to introduce IBP company-wide, they realized they had neither the tools, structured approach, nor the time to step up. By partnering with EyeOn Planning Services AkzoNobel was still able to accelerate their IBP journey with immediate forecast improvements.

“I would advise companies that face similar challenges to get that outside help from EyeOn Planning Services. Especially because it allows you to focus on other things as a company and leave the expertise with the experts.” – Filip Buytaert

Learn more about Planning Services!

The post Accelerating AkzoNobel’s IBP journey with Planning Services appeared first on EyeOn.

EyeOn offers a framework to leverage the full potential of your demand planners. In this webinar we presented how our framework can guide your demand planners.

Watch the webinar recording below to learn more, or contact us directly!

The post Demand planning 2.0 – Take control of your role! appeared first on EyeOn.

Balancing demand and supply is a challenge for many companies which even in relatively stable times may necessitate working with different scenarios. COVID-19-related issues and geopolitical turbulences in Europe and Asia put even more pressure on organizations to develop or further mature scenario modeling capabilities. When taking on this challenge, three angles should be considered:

• Monetizing the scenarios
• Embedding the scenarios in your S&OP/IBP process
• Using the proper tools

Financialize your decisions

When you want to move to scenario modeling you need to be able to assess the trade-offs between the different scenarios. Making them financial makes comparison possible.

Make use of the different operational plans that are already being created in your organization. Plans like the marketing plan, sales plan, supply plan, or factory plan contain key drivers that function as leading indicators. Market growth or share, price positioning, order book, installed base, or sales volume can be key drivers impacting your net sales. Factory cost price, manufacturing efficiency, freight, and handling costs can be leading indicators that impact your cost of goods sold. Moving down the profit and loss account below ‘integral gross margin’, you will also be able to find key value drivers in existing operation plans.

Demand fluctuations are the driving force behind projections on revenue and variable costs. A proper tool allows you to create business rules that help you relate fluctuations in demand to effects on profit and loss, balance sheets, and cash flow items. You will need to identify more drivers and create more business rules to complete the picture. But playing with simple demand scenarios (like ‘low’, ‘most likely’, and ‘high’) is often the starting point because it usually has a big influence on multiple line items. Once you have created the model, you can run it multiple times playing with the drivers, and easily compare different scenarios.

Upgrade your S&OP/IBP process with supply chain scenario planning

The key is to (re-)design your process so you periodically take a snapshot of your operational systems which, using a set of predefined business rules, can function as a starting point for making monetized S&OP/IBP plans.

To be able to create these monetized plans you need (more) involvement of the finance or control department in your S&OP/IBP process. Controllers become partners in business, no longer only explaining what happened but helping the organization to anticipate on what is likely going to happen, moving from being primarily reactive to becoming more proactive – the objective of supply chain scenario planning.

Because of its nature of crossing functional borders, the S&OP/IBP process is the most logical place to house supply chain scenario planning capabilities. Organizations that have a proper S&OP/IBP process in place typically create several scenarios where they play with the drivers that determine the success of the organization. They play with volume, price, quality, and mix of the raw materials used and products sold and, for example, the allocation of quantities to different factories. This results in gradually getting a feeling for what is really important, where the risks and opportunities are. Continuous integrated demand and supply alignment, supported by dedicated supply chain scenario planning, is an effective way to evaluate risks in a structured way and determine mitigating actions.

Consider a fast planning tool to support

To effectively and efficiently build scenarios and play with these during the S&OP/IBP process you need a tool that allows you to do so. We see different levels of tool support:

Most immature are often homegrown systems to support specific planning tasks and are basically structured Excel with macros and automated up and downloads. They can be cheap, fast, and provide a close to the user experience, but become slower with increased amounts of data to process, difficult to maintain, labor-intensive (making them less cheap in the end), and error-prone.

On the other side of the tooling landscape, we see advanced planning systems. These are integrated planning systems supporting and optimizing various planning processes like demand planning, production planning, and S&OP from vendors like SAP, Infor, JDA, OMP, Kinaxis, and O9. These have rich functionality, but are complex, expensive, and require IT for implementation. They are considered a long-term solution covering a wide array of planning capabilities.

If you don’t want to build something in Excel because of its drawbacks, but also don’t want the complexity of an advanced planning system, there is an alternative combining the best of both worlds: fast planning tools. A flexible platform that allows to build apps to support specific planning processes. Examples are Anaplan, Jedox, and Board. They provide scalable functionality and are cloud-based. Fast planning tools feel like ‘structured Excel’ and allow a business-driven implementation, without heavy IT involvement and at relatively low investment costs. They bring scenario modeling, design, and implementation close to the end-user, allowing rapid implementation, and changes to the model can also be realized quickly.

How we can support you in optimizing your supply chain scenario planning

We hope this article gives you a good base to start building and playing with scenarios. If you want to know more check out our content on S&OP/IBP and planning solutions!

This is the time to build resilient, agile, and sustainable supply chains, maximizing the benefits of digitalization and advanced analytics.

The post How to focus on scenarios in your supply chain planning appeared first on EyeOn.

1. Re-instate statistical forecasting

The key assumption for statistical forecasting that “the past is a good predictor for the future” doesn’t hold anymore, which presents a new challenge in forecasting and demand management: Can we still generate a meaningful statistical forecast in our planning system, if past demand patterns are heavily disrupted? The answer is yes, and here are two methods how: 

Tetris correction  

This technique consciously fills plummeted sales gaps in the disrupted period to recover the demand pattern. It can also be used in case sales peaked exceptionally. However, the resulting statistical forecast might not be fully usable if it is expected that demand will again behave in a disrupted way in the future. To still generate a proper baseline in this case, that only needs limited manual enrichment, another method is available in our toolkit:  

The Rubber Duck 

This method applies future ‘disruption and recovery curves’ on the right aggregation level (e.g. country-product family), to reflect expected demand disruption throughout the selected portfolio scope. 

2. Optimize your working capital

Companies today are facing tremendous inventory challenges, balancing between controlling the stocks and maintaining their customer service levels; demand patterns have changed both up and down; inventory levels were based on the past stable situation. It is vitally important to bring focus and create a plan to cope with the challenges. What can you as a company do first to get the fast-working results without costly long-time efforts? 

The answer is simple – create insights in your main inventory, service level, and cost drivers. It is impossible to optimize your parameters without knowing the as-is situation. Use the insights to define the most effective prevention and counter measures. As a next step, restore supply chain balance and enhance the quick wins with smart analytics. Only then start regularly updating your inventory parameters based on the latest trends in demand and supply, leveraging the knowledge of the planners. Monitor the progress and the results to keep your settings optimized for the future.

3. Use your IBP process to manage the dynamics

Current business reality has taught us that being able to deal with dynamics is pivotal to be successful. A well-functioning IBP process is critical to reducing the latency in responding to events happening in the market and allows you to make high-quality decisions. IBP is a cross-functional business process involving finance, sales, marketing, and supply chain. Situations change fast. Grab new opportunities and have an agile response to the unexpected.   

Bring your IBP process to its full potential and keep evolving in line with business needs. How to get started:  

1. Assess & benchmark your current maturity 
2. Design & implement a fit for purpose IBP process 
3. Coach stakeholders on various levels in the organization 

4. Re-design your supply chain

Global supply chains with single sourcing have become a common set-up for competitive reasons over the last decades for many companies. Three main forces drive reconsideration of this set-up and the need to re-assess your supply chain configuration:  

1. The Covid crisis, with lockdowns, the closing of markets shows the vulnerability of global set-ups.
2. The growing politicization and uncertainty in free trade require more resilient supply chains.
3. The need to consider the environmental impact of the current supply chains. In the circular economy, shorter supply chains with integrated return flows are more sustainable.

Supply chain redesign starts with translating the business strategy into supply chain requirements. Consider building a digital model of the as-is supply chain (“digital twin”). This can be used for the optimization and evaluation of scenarios on various criteria like costs, service, environmental impact, and risks. Uncertainty asks for more frequent evaluation of the supply chain configuration. Leverage the developed digital supply chain model and build your capability. 

5. Accelerate the digital transformation

Digital technologies have changed our personal lives via WhatsApp, Instagram, Airbnb, Uber, and Spotify. This change has also a large impact on your value chain. Considerable investments are being made to enable the digital transformation in the planning domain, companies are taking big steps towards increasing the level of automation of their planning processes. Getting digital holds the promise of efficiency of tasks that once required substantial time and human effort. It also involves improving the quality of forecasts, plans, and decisions through mining large amounts of data to discover new insights that were previously inaccessible.   

Advancements need to be made in collecting and engineering data, implementing new tools that allow for more advanced analytics, preparing your organization, and building a data-driven culture. Start with developing a vision, select a business process to work on, and take it from there by running projects to explore benefits and learn data science tools that go beyond the existing planning tools, build capabilities, KPIs and data. 

Readjust your planning and forecasting to a post-pandemic world, start by getting in touch with our experts! 

What about the supply chain challenges in 2022? We got you covered!

The post How to plan in a post-pandemic world: Five key focal areas in 2021 appeared first on EyeOn.

The Corona crisis disrupted the worlds’ supply chains and left numerous organizations looking for strategies to cope with the situation. It has shown that crises like these do not follow the monthly S&OP cycle, particularly in an environment with vastly increased volatility and uncertainty due to a global pandemic. New information becomes available every minute. In this rapidly changing environment, improving your reaction speed and reducing decision-latency is of major importance. An effective method to improve decision making is using the newly available data to create different scenarios. This allows you to test response strategies to these possible scenarios and gain competitive advantage. However, as supply chains can be highly complex, this is often easier said than done.

Dealing with uncertainties in the supply chain

Supply chains are most often long and complex but sensing and predicting demand patterns and uncertainties downstream is possible. Upstream, however, lead times are higher, lot sizes are larger, and availability and frequency of data is much lower. You need different strategies to deal with uncertainties in this part of the supply chain. Although scenario analysis has proven to be an effective method for dealing with uncertainty in the supply chain, as of today it is not a widely spread capability.

One of the key reasons for the lack of this capability within organizations is the fact that most APS systems are not responsive enough to support these “what if” analyses. They generally lack the capabilities needed for easy modeling of the supply chain and different scenarios. They also miss the necessary visualization- and comparison options needed to do a quick analysis to gain new insights within seconds. By introducing systems that allow the user to quickly formulate scenarios, evaluate them and use visualizations for easy interpretation, you can easily incorporate scenario planning into your organization and vastly reduce decision latency.

How pro-S&OP can help you deal with uncertainty

In pro-S&OP, which stands for proactive sales & operations planning, scenarios and risks can be evaluated through the use of a digital twin of your supply chain. First, it is important to gain a thorough understanding of your supply chain. Gather insights in the different risk factors that can impact the supply chain. By creating a digital twin of the supply chain, you can analyze and quantify the potential impact of different sources of risk and the effectiveness of the response strategies. This type of risk analysis provides organizations with quick access to easily interpretable visualizations of the possible impact of risk factors or opportunities. An example is the impact of transport routes that are released after having been closed due to the pandemic. As these scenarios can be easily adjusted to new data, and thus new sources of risk, pro-S&OP will allow organizations to detect early warnings, reduce their response times and improve their decision-making process in volatile situations.

Final thoughts

The Corona crisis has shown us that major supply chain disruptions can be caused by unforeseen events we cannot control. Having the capability to perform scenario analyses can be of significant importance in a situation of crisis that we are currently in. Proactive sales & operations planning will enable your organization to quickly create meaningful insights in the risk your organization is facing, while keeping it simple and thus preventing analysis. This will enable you to better evaluate the rigidity of response strategies, vastly decrease your response times and make better motivated decisions, which is of major importance in a highly volatile environment.

Learn more about scenario based planning or check out our content on S&OP/IBP! 

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Are companies embracing this new digital reality of sales and operations planning (S&OP)? At the Marcus Evans event ‘Cross-Functional Alignment through S&OP/IBP’ last week in Amsterdam, Edward Versteijnen and Yulia Meshalkina facilitated a workshop on this subject. Most participants agreed:
It starts with getting access to the right data and creating powerful insights. Modeling and optimizing is a logical next step, but the challenge is to embed it fully in the planning processes.

Only then S&OP/IBP meetings will transform from tedious meetings in which 80% of time is wasted on data discussions, into vivid data-driven meetings where clear decisions are taken.

Learn how to turn data into insights!

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The Corona virus is rocking supply chains. It has become painfully clear that supply chains are global, long, highly connected, and extremely lean. Companies are responding to the effects of the Covid-19 disruption in various ways. In this blog we share some of the measures taken by our clients and draw some learnings.

Create supply chain visibility

This crisis makes it clear that supply chain visibility is of paramount importance. E2E planning systems allow companies to easily simulate the impact for different scenarios. At the Marcus Evans conference one of the presenters explained how Anaplan enables full transparency and allowed them to act in the right way when the production plant in China was closed due to Covid-19. For firms not having these systems the collection of all the data and the creation of dedicated dashboards helps in creating at least a basic view on global inventory availability, for example. One of our clients – a medical devices company – has launched a project to create a core dashboard of ‘Corona reports’, showing global product availability.

 We see arrangements being made on three levels:

1. Operationally to deal with immediate needs,
2. Tactical to get insight and prepare for different scenarios, and
3. strategically by rethinking supply chain design.

Operational changes

Operationally companies are creating dedicated Corona task forces to deal with uncertainties and to manage the consequences. Since events are unfolding with an amazing speed, day-to-day or even hourly follow up is required to observe, decide and act on events like product shortages, factory closure, closed borders or limited availability of transportation capacity. Based on new insights immediate actions are deployed. For one of our clients – a  computer manufacturer – the production in China has started up after a lock-down of one month. The task force is dealing with questions like:

• Which products to produce?
• How to allocate the limited availability over the accounts (margin based)?
• What mode of transportation to use?

Tactical arrangements

At the tactical level, scenario planning delivers understanding into potential issues and allows companies to pro-actively build business continuity plans. In our day-to-day customer engagements we see companies running scenario’s to answer what-if questions like:

• What is the impact when we have to close the factory in Northern Italy for a month?
• How sensitive is my demand forecast based on historical demand patterns?
• What to do when airfreight from China becomes scarce?
• Do we have 4th tier or 5th tier supplier that might run into problems?
• Do we have sufficient inventory when import into the US is prohibited for a specific period?
• Are triage rules clear and communicated in case a difficult supply choice has to be made so there is no time wasted in deployment of scarce supply?

Strategic design 

In the aftermath of the interruption companies start strategic design studies on how to become more resilient to disruptions by having second sourcing, re-shoring activities or building networks with redundancy. Although this is not always an easy task due to high cost manufacturing like in the semiconductor industry or producing API in pharmaceutics.

We are happy to support you in these challenging times. Please feel free to reach out! 

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