Modern S&OP for consumer industries
Our client is a multi billion euro global company running sales and operational planning (S&OP) processes across all operations. They make and distribute champagne and other luxury drinks. Also, they have global operations and are globally at the forefront in style and fashion.
The Challenge
So, our client operates a sales and operational planning process (S&OP) and have finance teams supporting business operations. Commercial teams need to provide sales plans which supply chain teams need to meet. Furthermore, all of this operational activity needs to produce the correct revenue, net sales, margin and cash flow results.
So, key issues were:
- Out of date sales plans
- supply chain gaps leading to unfulfilled orders
- lack of cohesion between sales, supply and finance directors
SAP systems and excel were the primary tools we had to manage this complex requirement.
Transforming finance and the way we worked…
As a result, we implemented a sales and operational planning process (S&OP) that drives the financial reporting and profitability.
First and foremost, we introduced a LIVE PLAN. It never went out of date because commercial teams updated it daily. This greatly helped the supply chain guys – who were better able to shift things around to make sure demand was met. Update in sales volumes and discounts daily and the ability to automatically calculate margins and profit meant that we had a daily view of our business performance. Better still – our forecasts became much more accurate with easy frequent updates.
Importantly, in our world sales and supply are linked and ultimately feed the finance numbers. Using a single system to manage sales, supply and finance meant that the cornerstones of our business could work more efficiently together.
In the end we had:
- Much more up to date and accurate forecasts
- A continuous view of update to date profit and cash flow
- Monthly director meetings with Sales, Supply and Finance running simulations and assessing the impact
AIS Consulting replaced our existing consultants and provided expert guidance on systems and processes. Its worth pointing out that they also provided a support service to our systems users.
AIS helped us to reduce planning cycle time by 50%, increase forecast accuracy to above 98% and to bring together sales, operations and finance in a much more effective management process.