one number – un piano della domanda condiviso e affidabile garantisce la soddisfazione del mercato

Bologna, 26 Marzo 2015

ONE NUMBER – UN PIANO DELLA DOMANDA CONDIVISO E AFFIDABILE GARANTISCE LA SODDISFAZIONE DEL MERCATO Francesco Stolfo Partner - Sales Director ToolsGroup Italy

Company Confidential All Rights Reserved 2 Company Confidential All Rights Reserved

EUROPE Amsterdam Milan Munich Barcelona London Stockholm

AMERICA Boston(*) Ontario Mexico D.F.

ASIA Malaysia India Japan

MIDDLE EAST Israel AFRICA Cape Town

Our Vision

Accelerating Business Performance through

Market Driven Demand Analytics and Supply

Chain Optimization

Our Mission

To be the leading provider of

“Powerfully Simple” software solutions that

deliver business value in

complex, demand driven environments

Our Approach

Best practices leveraging

quantitative and qualitative data

to deliver predictive demand signals

to enhance the effectiveness of

the planning process

2013 - Winner of European Supply Chain Excellence Award Category: Technology www.supplychainexcellenceawards.com

(*) HQs

Company Confidential All Rights Reserved 3

SO99+: our software solution for Planning & Optimization

Supply Chain distribution intensive industries

CPG Sales Mktg.

Manufacturing

Comprehensive Statistical Model

ERP/SCP/SCE

Demand Planning

Demand Modelling

Statistical Forecasting

Promo, media, NPI

Demand Sensing

Demand Collaboration Hub

Inventory Optimization

Inventory Modeling

Service Planning

Mix, Stage & Lot Size Optimization

Multi-Echelon

Replenishment Planning

Dynamic Min/Max projected requirements

SC Monitoring & Visibility

Level Loading

VMI

Supply Collaboration Hub

Transportation Plan

Comprehensive Statistical Model

Predictive Demand Analytics

Market clustering Segmentation

Trade Promotion Optimization

Media event and trend indicators

ROI

Production Planning and Scheduling

Mill allocation

Finite capacity plan

ATP

Production Scheduling

MES


Customer References

Consumer Durables

250+ customer businesses in 31 countries loyalty greater than 95%

Food-CPG

Healthcare | Pharma | Chemical

Fashion & Apparel

Retail & Wholesale

Automotive & Aftermarket

TLC | Steel | Engineering


ToolsGroup - Sales Inventory & Operation Planning (SIOP approach)

Demand Planning Inventory Planning & Optimization Replenishment Planning

Company Confidential All Rights Reserved

The Myth of the ONE NUMBER Planning


Prologue

S&OP and the ONE NUMBER Planning


S&OP and The One Number Planning

Metà anni ‘80: Dick C. Ling, consulente della Oliver Wight, fu il primo ad annunciare un nuovo processo (S&OP)... that would help companies align their manufacturing operations and resources planning with the anticipated demand for their products.

Christopher Turner, collega di Ling, fu tra i primi a definire l’approccio dei 5 passi tipico del S&OP.



• Demand Planning ([...] “combination of actual sales activity and forecast

combined with other forms of market insight” - Steve Hochman of AMR

Research);

• Centralized Demand Planning Meeting (the multiple forecasts for each

product family — often from different regions — are rolled up into a consensus

outlook - the forecast is unconstrained);

• Capacity and Supply Planning (production planners might note that a

certain supplier has been late on shipments, or that the amount of product expected

would mean additional worker overtime);

• Pre-S&OP Meeting (Here, problems and imbalances are identified and

financial implications are considered. Issues that can't be resolved by the manager-

/director-level participants are elevated to the next step);

• Executive S&OP Meeting (The senior executives involved. Typical decisions

include increasing procurement budgets or adjusting production schedules at various

plants — high-cost activities that demand executive sign-off);

S&OP: 5 step process



Nei primi anni ‘90 solo il 20% delle aziende che partecipano al programma di ricerca MIT Supply Chain 2020 avevano tentato di implementare processi di S&OP. Nel 2007 erano diventate l’80%.

MIT Supply Chain 2020 Program



• Demand Planning ([...] “combination of actual sales activity and forecast

combined with other forms of market insight” - Steve Hochman of AMR

Research);

• Centralized Demand Planning Meeting (the multiple forecasts for each

product family — often from different regions — are rolled up into a consensus

outlook - the forecast is unconstrained);

• Capacity and Supply Planning (production planners might note that a

certain supplier has been late on shipments, or that the amount of product expected

would mean additional worker overtime);

• Pre-S&OP Meeting (Here, problems and imbalances are identified and

financial implications are considered. Issues that can't be resolved by the manager-

/director-level participants are elevated to the next step);

• Executive S&OP Meeting (The senior executives involved. Typical decisions

include increasing procurement budgets or adjusting production schedules at various

plants — high-cost activities that demand executive sign-off);

S&OP: 5 step process


One Number Planning The first step


The One Number Planning


Sales & Marketing effects on the Demand Signal

A

B

C

Available

spending budget

Growing noise and loss of visibility

Discount

3x2

Point

Noise from competitor promo activities

What is the store’s

contribution to an individual promotion?


How to support the Demand Planning


How to support the Demand Planning

Calculation of the baseline and support for shaping promotional uplifts Via the use of data based on sell-in revenue/volumes, the filtering of external factors and the consultation of all available proprietary and competitor calendars, the baseline at customer/product/period level can be obtained and the relative uplift effect of the individual phenomenon (both in the past and in the future).

Baseline Calculation & Promotion Modelling

A brand new application frontier for Artificial Intelligence Machine Learning technology clusters all past promotion activities into “like-effect” groups, and identifies the drivers. On this basis it is able to identify and classify all new planned campaigns in accordance with their characteristics.

Statistical forecast model at Product/Market Structure For every Product / Market Structure, a robust and accurate demand baseline is generated. The baseline is cleansed of every promotional or external effect. An accurate baseline is fundamental to identifying elements of promotional uplift.


The One Number Planning:


The One Number Planning

[…] ToolsGroup customer Granarolo, an Italian dairy products company, uses data analysis to help juggle the shelf-life of many of its products. For instance fresh milk lasts for six days while the company’s yoghurt has 40 days to sit in the supermarket. Seasonal taste adds to the complexity of shipping products across Europe, with items such as mozzarella cheese selling better in summer. Another factor is that 60 per cent of Granarolo’s products are sold via promotions and discounts. The consumer response to each of these deals has to be carefully calculated by the Bologna-based company. Granarolo, applying past experience of how well promotions have worked in different outlets, uses the machine learning program to generate suggested stock levels. These predictions rely on data from 60,000 sites across Europe. […]


One Number Planning A step forward!


Synergy across Functions: One Number Planning

Trade Promotion Optimization System


Powerfully Simple


OPERATIONS SALES

Uplift (%)

Baseline (Vol) Sales Team Members validate Promo events (Net Uplift and Net ROI) which best fits with Business OBJs and share them to

Supply Chain Team

Mid-term Promo Plans in compliance with financial objectives built up from

lowest level of detail

Supply Chain

Key Account

Trade Marketing

Finance

Advanced promo & forecast models are shared with sales teams in order to provide an analytical basis business decision making

Trade Promotion Optimization System


Powerfully Simple

How to improve Promotion & Media ADV Effectiveness

Dynamic Market Modelling

IN-STORE ANALYSIS

Product location Attractiveness

OOS Planogram

MEDIA FORECASTING

PROMOTION FORECASTING

CATALOGUE & ADVERTISING

Web and Flyers

Syndicated & Sell-Out

Data

Supply Chain Planning

Demand Forecast Short, Medium &

Long term

Trade Promotion Decision

Support System by objective

and ROI

Demand Planning Inventory Planning & Optimization Replenishment Planning


Thank you for your attention