Yesterday at SapphireNow I enjoyed a great presentation from Jim Newkirk from Colgate Palmolive and Sunil Sanghani from Ernst & Young.
Jim kicked the session off by explaining that Colgate are a truly global company with over $17.1 billion in sales in 223 countries and territories, and 39,000 employees worldwide.
As Jim put it, “At Colgate, S&OP is a monthly structured process to gain alignment on a consensus demand plan taking into consideration the business goals and constraints from Finance, Supply Chain, and Sales & Marketing”. As Jim conntinued” “S&OP is Colgate’s monthly discipline”. S&OP is the monthly execution of commercial business planning. It facilitates the monitoring and documentation of changes in the business environment to provide visibility to updated positions b/w financial estimates. Colgate is focused on delivering and exceeding business objectives through cross functional collaboration and alignment to improves commercial effectiveness.
Why does this need a tool?
Colgate saw a need to standardize on a tool designed to manage this monthly process. Their current process was a manually intensive data gathering exercise, and the supporting systems had limited “what if” capabilities, lacked of flexible analytics and did not provide the collaboration to manage a cross functional process
Colgate’s Business Requirements
When selecting a solution, several requirements were key drivers:
- Needed a monthly top line rolling 12 month LE with a focus on the next two quarters
- Clear visibility of business position by product sub-category with capabilities to input plans at any level of product hierarchy
- Top-Down / Bottom-up planning capabilities Possibility to have “what-if” scenarios
- Eliminate the need to manually collect information from multiple systems and sources
Why S&OP powered by Hana
Jim explained that Colgate and SAP have had a longstanding relationship and SAP is Colgate’s strategic partner for Information When evaluating the SAP S&OP powered by HANA solution, the users were quickly drawn to:
- Easy to use (Excel Planning Templates)
- Powered by HANA for fast Top-Down / Bottom-Up planning
- Collaboration embedded in the UI (facilitates user interaction and communication within the tool)
- Analytics embedded in S&OP
Colgates S&OP Prototype
Colgate embarked on a prototype for one product category in the US Company in October 2012. The project was scoped to validate the S&OP tool in 3 monthly discipline cycles (March-May). Now Colgate plan to be fully productive by July 2013.
Colgate sees the key benefits of the project to:
- Eliminate current manual process using excel spreadsheets
- Improve collaboration across functional areas for improved planning process
- Perform “What-if” scenarios will allow better simulations and improve the decision making process
- Improved Inventory and Customer Service Levels
Sunil from Ernst & Young then wrapped up the session by discussing a deployment methodology being used at Colgate. He said “the 9 week prototype really showed the power of S&OP and we have used this approach at 3 other companies”. Sunil added that “S&OP is really driving an integrated business planning approach by leveraging financialdata to drive revenue and profit impact. We also see an opportunity to bring in multi level inventory optimization to set and drive inventory targets, settings and projections”. Sunil concluded “Users love the user interface and ease of use by leveraging excel and the embedded analytics capabilitis”
Thanks to Jim and Sunil for an enjoyable session.