Creating Delicious Moments at Mondelez with SAP Sales and Operations Planning
First Phil provided a little background on Mondelez, who are a “global snacks powerhouse who, in 2014, generated revenue of more than $30 billion”. Thy market products in 165 countries and have approximately 100,000 employees worldwide.
gories and over 75% of revenues come from outside North America. The company have household brands such as Cadbury, Oreo, Chips Ahoy, Milka, Toblerone, Trident and Halls.
What does Integrated Business Planning mean to Mondelez?
Integrated Business Planning (IBP) processes enables Improved Business Results through Integration, alignment and synchronization. Phil explained that Mondelez define IBP as “a process led by senior management that evaluates and revises time-phased projections for demand, supply, new product development, strategic projects and the resulting financial plans”. At Mondelez, this is done on a monthly basis, on a planned 24+ month rolling horizon.
Mondolez see IBP as a decision making process that realigns the tactical plans for all business functions in all geographies to support the company’s business goals and targets.
A primary objective of the process is to reach consensus on a signal operational plan, to which executives of the management team hold themselves accountable, and allocates the critical resource of people, equipment, inventory, materials, time and money to most effectively satisfy customers in a profitable way.
Aligning Company Plans Every Month
- The Portfolio Management Review (PMR) assesses the sufficiency of the innovation pipeline and the resources required to execute it.
- The Demand Review (DR) is a process where sales and marketing determine what we will sell over the next 2 years. Determines where we have gaps in the plan and proposes possible solutions to those gaps. Focuses on controlling demand.
- The Supply Review (SR) creates a supply plan that solves for the demand created by the DR and PMR. Addresses any potential resource gaps with options and recommendations.
- The Integrated Reconciliation process quantifies the financial implications of the PMR, DR, and SR output. Identifies any key decisions that need to be made at the MBR.
- The Management Business Review approves plans proposed in the PMR, DR, and SR. Engages the category leadership team on any decisions that still need to be made. Reviews any other gaps that still exist and assigns actions to close them.
Across all steps Mondelez enforces several consistent attributes.
– Planing is done in monthly buckets
– They plan at an aggregate family level
– They have a 24 month horizon with a focus on 4-24
– The processes are executive led to ensure that there is linkage between strategy to tactical
– Monthly Cadence to enable constant replanning based on changes to demand and supply
– Ownership is key , with champions and leads for each step
Phil highlighted numerous benefits as a result of this deployment.
- Reduces financial resource requirements in normalizing and aggregating data.
- Facilitates a “One Number” plan by making the system the single source of the truth.
- One system eliminates the need to use/maintain multiple reporting mechanisms.
- Simulation of Volume & Revenue adjustment and Risk & Opportunity scenarios
- Improves organizational collaboration with transparency of data.
- Capacity constraints are identified earlier.
Thanks to Phil for a great overview.