Building a solid
foundation for S&OP
3 critical building blocks toset you up for successThe changing face ofS&OP

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What worked in the past may not be
the best path forward.
Sales and operations planning (S&OP) has long
been the backbone of many businesses, helping
drive success and stability through regularlyscheduled decision-making activities. It’s beena procedural staple in supply chain planningfor more than three decades. But these are
tumultuous times, and what worked in the past
may not be the best path forward.
Gone are the days when sequential, isolatedplanning and monthly meetings based solely on
satisfying revenue and margin goals provided
a solid recipe for success. End-to-end initiatives
now span beyond the confines of a single
company’s supply chain, encompassing its
extended supplier and customer value networks
as well. The visibility to look beyond your own
four walls is no longer a nice-to-have. It’s anecessity to your supply chain’s very survival.

Digitization, sparked by the riseof the Internet of Things (IoT), theexpanding number of connected
devices and big data, is drivinga shift in consumerism. Your
company needs to keep pace,or risk falling behind forever.
The reality of running a profitableglobal business now requires
speed and agility in both strategicand execution planning. It’s time
to move beyond the siloed S&OP
practices of the past and build asolid foundation that will easily
carry you toward the future.

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3 foundational
capabilities

Setting your business up for S&OP successmeans building the right foundation. This eBook
outlines three foundational capabilities youneed to power successful S&OP and achieve
faster, more confident decision-making.
4What-ifscenarios

Scenario simulation is nothing new. It’s long beenheralded as a sign of a mature S&OP process, but
it should be a foundational building block for any
modern supply chain. It lets you ask the ”what-if?”question. But traditional simulations take time andoften happen in silos, ultimately slowing down thetime it takes to analyze data, model options, makea final decision and then get the necessary buy-infrom other functional business areas.
What-if scenario simulation helps with making
trade-off decisions between conflicting KPIs,
divisions or business partners to find a situationthat provides the best overall win for the company.
But to get there, scenarios must be simple andquick to run, combine data from multiple sources,
allow for simple side-by-side comparisons ofoptions and support collaboration across theenterprise and extended supply chain. If it’s not
fast and easy, it won’t happen.
When anyone has the ability to run a simulation
using any data at any time – and then share theresults with others in the supply chain – it meansa more effective way to connect data, process andpeople within a single system. It creates theability to ask the right questions of the dataand provides a record of the answer
and the decisions that led up to it.

What-if scenario simulations
help answer questions like:
What if sales of the new
product are slower thanwe expect?
What if we run apromotion to clear out
inventory of the older
model?
What if a supplierunexpectedly shuts
down – either temporarilyor permanently?

6Collaboration

Organizations are now looking to involve as
many people as possible in the decision-making
process to put everyone’s skills and expertiseto best use. Gone are the days when planning
for a single function happened in isolation.
Collaboratively making decisions allows faster,
more efficient understanding of the end-to-end
impacts of potential choices.

The reality is you’ll need to share your scenarioswith those in other functional business areas towork out a compromise. You can’t rob Peter topay Paul without at least letting Paul know he’s
about to be shorted.

It’s very rare that you will run a simulation, decide it’s
the best course of action and then commit to thechange all on your own. Or if this does occur, you’ll
likely be dealing with some very angry colleagues.

Collaborative decision-making
is ushering in an era where
informed trade-offs are being
made. Instead of working
toward individual objectives,
the focus is on the same setof corporate-wide metrics.
It’s less about what’s easiest
and best for your functionalarea, and more about what’s
the right decision for theentire company.

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Record keeping

9There’s still one fundamental problem plaguingcompanies that already have what-if scenario
simulation and collaboration in place. It’s thatin many cases, data manipulation, what-if
scenario creation and collaborative discussions
are taking place across multiple systems.
In addition to the time it takes to circulate all
the relevant information to decision makers, it’s
likely you’re capturing only the end results, notthe debate and trade-offs leading up to them.
All those important details about trade-offs andcompromises are lost, and that history can neverbe reclaimed. As George Santayana famously
said, “Those who cannot remember the past arecondemned to repeat it.”To learn and grow from past mistakes, we must
understand why we made a particular decisionin the first place. We need versioning capabilities.
Looking at the past helps provide a clearer pathfor the future. That means capturing the context
of decisions, as well as the outcome, to provide a
better picture of cause and effect.

You’ll be able to step into thepast and see what bias may
have been in place. You canthen compare the past state ofyour supply chain to where itstands today and look into thefuture to see where it’s going.

Ideally, this historical record keeping
and versioning is happening within
a single system of record, the samesystem where you created the scenariosand fostered the collaboration. Why?
Because this allows you toquickly and easily retrieve
past scenarios similar toyour current reality.

10Say hello
to theworld ofconcurrent
planning

These foundational
capabilities – what-if
scenario simulations,collaboration and record
keeping – are driving
successful S&OP for
companies like Coty,
Schneider Electric and Ford.
Combined, they providethe backbone for a gamechanging concept known
as concurrent planning.
11Concurrent planning is the process of making and managing
synchronized plans across time horizons, business processes
and organizational boundaries at the same time. It bridges
functional silos and connects all nodes in the supply chain,enabling cross-functional coordination and faster, more
effective decision-making. It allows you and your peers to
perform seamless scenario planning across multiple time
horizons, providing improved performance and profitability.

12With concurrent planning, you’ll be able
to achieve the following, all fromwithin a single system:

Instantly synchronize demand,supply, product, capacity andinventory management

Rapidly evaluate and compare
alternative scenarios and impacts
across multiple functions

Actively monitor
current and projectedbusiness results

Quickly collaborate crossfunctionally for faster trade-off
decision-making

Easily see a detailed view ofpast states of your supply
chain including context andhistorical record keeping for
future events

Continuously orchestrate yourbusiness activities and coordinate
course corrections that optimize
overall corporate performanceand profitability
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Concurrent planning helps solve the planninghorizon challenges many organizations now
face – namely, bridging activities for short-termplanning (low impact, high frequency) withlong-term planning (high impact, low frequency),
and accounting for high impact, high frequency
events. The cadence and scale of these planning
activities makes it difficult to synchronize themacross multiple horizons.

Technology giant Cisco is proof

In most organizations today, short-term planning
is a result of distributed and siloed decisionmaking. Long-term planning decision-making is
usually centralized and hierarchical. Concurrent
planning allows for a seamless approach to shortand long-term planning with a networked anddemocratized approach.

Leading biotechnology company

To be successful, S&OP needs to focus oncollaborative decision-making and perpetual
planning. Concurrent planning shifts businessprocesses and supporting organizational
structures. Frequency no longer becomes alimiting factor, and the resulting faster scenario
analysis and simulation enables efficiency andcost savings.

ultimately driving greater

Concurrent planning allows
you to overcome supply chain
challenges by radically shrinking
planning cycles and response
times, while improving theaccuracy of analysis
and the profitability

positive of the results of concurrent
planning. In one use case, backlog wasreduced by an estimated US$500-800
million per year and expedited sales
orders were lowered by more than
10%, resulting in cost avoidance ofmore than $10 million annually.

Amgen has also experienced
supply chain success thanks toconcurrent planning. The company
has transformed its planningcapability, increasing collaboration
across business functions andprofitability and growth.

CONCURRENT
PLANNING

LONG-TERM
PLANNINGof actions.
SHORT-TERM
PLANNING

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Say goodbye
to scheduleddecisionmaking

Transitioning to this new
way of looking at S&OP
requires more than justcombining foundational
capabilities. It requires abig, bold move – saying
goodbye to scheduleddecision-making.

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For many, that may seem like an impossible step.
How can you let go of the security of regularmeetings planned weeks in advance? Or thesafety of knowing those big decisions only comearound once a month? Given the complexityof business and packed calendars, it seems tomake sense to schedule these executive S&OP
meetings so far ahead.
But the reality is, supply and demand waits for noone – not even your executive team.
Linear planning models are often the result of
siloed business functions, disparate data andtechnology limitations. Traditional S&OP planningtypically has monthly cycles, or at least that’s thegoal. It’s not uncommon to hear teams say things
like, “My monthly S&OP cycle takes six weeks toexecute,” or “the process to gather the data istime-consuming and by the time we present ourS&OP to our leadership, the world has moved on
and our plans are no longer valid.”

These disconnected approaches also failto allow for cross-functional collaboration,a vital component to effectively managing
unanticipated supply chain risk or last-minutechanges. The time it takes to analyze, model andmake informed decisions increases exponentiallywith every silo that needs to be part of thedecision-making process or be informed of theresulting action’s impacts.
Another issue is how long it takes to capture
data from extended supply chain partners andcustomers. If your data is housed in multiple
systems with little to no integration, it’s likely
going to take a lot longer to get the most
up-to-date information to support analytics
and decision-making. Real-time data integration
using a single system of record is key.

Current S&OP processes are often sequential
and rigid, creating inefficient functional silosof demand, supply and production planners.
In turn, this breeds an inability to make rapid
adjustments like short-term promotions, pricechanges or deal with unexpected interruptions
outside of regularly scheduled planning cycles.

It’s a case of plan, then execute. Plan demand,then plan supply, then plan capacity, thenplan inventory, and so on. If an unexpected
event interrupts one of those steps, it’s backto the beginning to start over again with a
new plan – and that’s assuming you evennotice the problem before execution, which
unfortunately isn’t always the case.
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Nextsteps toa brighter
S&OP future
Decisions you make now could have long-term
implications. What you do in the supply chain
affects more than just on-time delivery. It affects
relationships – with colleagues, suppliers andcustomers. It affects brand integrity. It affects
profitability. It affects the entire planet.

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The rapidly increasing pace of business demands
changes to current S&OP practices, and advanced
technology is making it possible throughconcurrent planning. It’s time to step away fromsiloed, scheduled decision-making and movetoward collaboration and parallel planning.
You need to shift the S&OP paradigm to embrace
the future. That means developing the ability
to plan, monitor and respond to supply chain
changes simultaneously and within a single
supply chain management solution. It means
bridging functional silos and connecting all nodesof the value chain with end-to-end visibility.

Developing capabilities
today that will support
your supply chain planning
processes tomorrow is
critical to your future
S&OP success.

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S&OP done differently
The way Kinaxis® does S&OP is different – really different.
But don’t be scared. Since it’s way less complicated andtime-consuming, and actually based in reality thanks
to the power of concurrent planning and continuousreconciliation, after just one cycle you’ll be wondering
how you ever ran S&OP the old-fashioned way.
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1Do a reality
check

Check annual and current
integrated sales andoperations plans to see if life’s
thrown any curveballs yourcompany’s way.

6

2

Adjust plans toreflect real life

Close the gap by making
any needed changes toyour plans – demand,supply, inventory, capacity.

3

Blink and you’ll miss it! Your entire
supply chain automatically rebalances inseconds, alerting you to any exceptions
that need your attention.

1

2

3

6

5

4

Sit back, relax and wait
for life’s next curveballRest easy knowing no matter how
fast or frequent things change
across your supply chain, you’ve
got the agility to respond quickly
and confidently.

5

Watch the magic ofconcurent planning happen

Get the headhonchos’ approval

Secure signoff, push thechosen scenario live with asingle click and head down thepath to execution glory withshort- and long-term plansthat are completely aligned.

4

Weigh your options withunlimited scenarios

Spin up any number of scenarios
in real-time to evaluate trade-offs
and options, comparing them all
to each other, the current plan andcritical KPIs.

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Why wait weeks or even months to complete asingle S&OP cycle? With Kinaxis, you don’t haveto. Our S&OP application eliminates data silos
for fast, easy collaboration across functions.
Synchronize demand and supply planning,
inventory management, capacity planning,finance, sales and marketing to get quick,clear insights into each team’s changes andtheir impacts. No more wasting time reconcilingspreadsheets or aligning email chains.
Instead, teams work in parallel to set financial
targets, measure progress and optimize
outcomes. The final product is better results
for the entire business.

With Kinaxis, you’ll be able to:Increase efficiency

Take control

Improve accuracy while
shortening the S&OP cyclewith fast, collaborativeplan development.

Increase consensus and reduce
surprises with contributions
from and vetting by crossfunctional stakeholders.

Improve business outcomes

Align with financial goals

Reduce risk and maximize business
opportunities with superior
ability to set financial targets andacceptable levels of variability.

Easily scale and align your S&OP
processes as your company’s
objectives change without
sacrificing efficiency or precision.
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With our cloud-based Kinaxis
RapidResponse® platform, you’ll
be able to develop plans fasterand more reliably, drasticallyreducing the S&OP cycle while
producing more accurate results.
Easy collaboration and scenario
simulation means increased
consensus and fewer surprises.

“The speed in which scenarios can be created and analyzed hasgone from 24-48 hours to 10-30 minutes in our S&OP process with
RapidResponse. Planners use scenarios to hone in on a solution that
may involve changing and recalculating the scenario multiple times –that would take 24 hours for each cycle in our SAP planning tools.”– OPERATIONS MANAGER,
S&P 500 ELECTRONICS COMPANY

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“RapidResponse has improved the confidence of company leadersthat our S&OP process is dependable and that we can quickly provide
reliable data for decision-making purposes.”– OPERATIONS MANAGER,
MEDIUM ENTERPRISE ELECTRONICS COMPANY

Support collaborative planningand decision-making withuser-friendly, comprehensive
visualization tools designed tohelp you understand what thedata’s telling you in seconds.

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With Kinaxis, your entire S&OP cycle can becompleted in just a couple of hours. But hey,
if you love sitting in extra-long S&OP meetingsand spending six frustrating weeks just to get
the wrong answer, that’s your call. You do you.

With the fastest end-to-end go-live process on the market,
Kinaxis RapidResponse can quickly and effectively provide asolution tailored to meet the specific needs of your business,no matter how complex your supply chain.
LEARN MORE

About Kinaxis Inc.
Everyday volatility and uncertainty demand quick action. Kinaxis delivers the agility to make fast,
confident decisions across integrated business planning and the digital supply chain. People can plan
better, live better and change the world. Trusted by innovative brands, we combine human intelligencewith AI and concurrent planning to help companies plan for any future, monitor risks and opportunities
and respond at the pace of change. Powered by an extensible, cloud-based platform, Kinaxis delivers
industry-proven applications so everyone can know sooner, act faster and remove waste.
Don’t believe us? Ask us to prove it. Learn more at Kinaxis.com.

Here’s more to discover on this topic:y Navigating volatility: Connecting finance to the supply chain through S&OP
y Thinking differently about supply chain planningy IBM: Innovating the S&OP process and beyond

www.kinaxis.com

This publication is accurate as of the date published and may be updated by Kinaxis from time to time at its discretion.
Copyright © 2021 Kinaxis Inc. All rights reserved. Kinaxis, the Kinaxis logo and RapidResponse are registered trademarks ofKinaxis Inc and its affiliates. All other brands and product names are trademarks or registered trademarks of their respective
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