Top 10 Success Factors for Sales and Operations Planning Joachim Schulte, Senior Sales Consultant

1. Top 10 Success Factors for Sales and Operations PlanningJoachim Schulte, Senior Sales Consultant

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3. Agenda <Insert Picture Here> • Challenges withSales & Operations Planning • Oracle Demantra overview • Using Oracle Demantra

4. National Brands Ltd. Consensus demand and supply plans Company • One of South Africa’s leading CPG companies, producing tea, coffee, biscuits, and snacks • Many new product introductions • Extensive promotional activity Planning problem solved • Consensus demand and supply plans Unique aspects of implementation • Introduction of an integrated Sales and Operations Planning Process • Improved forecast accuracy by 13% • Cut finished goods stock levels by 20% • Improved service levels from 94% to 96% • More effective production planning

5. Demand Driven – Significant Benefits Demand Driven leaders have: • 15% less inventory • 17% stronger order fulfillment • 35% shorter cash-to-cash cycle times Which translates to: • 60% better profit margins • 65% better EPS • 2-3x the ROA Improved Demand Management is the first important step ! Source: AMR Benchmark Analytix

6. Financial Planning Production Planning New Product Planning Sales Quotas Marketing Forecasting Measurement and Reporting Traditional Approach – Disconnected High latency, limited collaboration, no consensus forecasting Your Company Multiple,non-integratedsystems Manual processes Multiple data sources Low forecast accuracy Departmental orientation to demand forecasting Misalignment between metrics and objectives Not tied to Sales and Operations Planning process ?

7. Better Approach Real-time demand sensing and collaborative consensus forecasting • Eliminate decision making latency by focusing on excellence in demand visibility • Sense demand more frequently and closer to the point of consumption • Replace spreadsheets with one number demand management - Collaborate with all constituents • Improve your forecast accuracy • Use advanced analytics and statistics • Shape demand • Promotion excellence and decomposition • Leverage granular demand signals (customer, channel, store, shelf) • Identify and simulate cross selling opportunities • Evolve to real-time S&OP • Profitable demand response • Identify supply side opportunities • Define and monitor customer based metrics • Get real time visibility to sales tactics (price breaks, promotions, deals)

8. Top 10 Success Factors for S&OP 3 Critical Success Factors -- Tools • Use graphical presentation • Make it easy to grasp what has changed and any issues • Ensure an “integrated” tool is used -- same tool for each step in the process Adapted from Top 10 Success Factors for Sales and Operations Planning by Oliver Wight

9. Sense Demand Real-Time Involve all constituents and forecast closer to the point of consumption • Sense demand real-time, at more granular level, and closer to the point of consumption • Report and measure demand in the ways important to your business - role-based Collaboration Workbench for coordinated demand response • Support different demand data for each customer and channel • Easily add additional sources of information, such as external syndicated and POS data, using data integration profiles • Use multiple units of measure and multiple currencies • Collect information from multiple source ERP instances • Out-of-the-box integration for Oracle EBS, JDE E1 • Leverage built-in intelligence to automatically select which level’s data to use for forecasting • Roll up data across unlimited hierarchies • Forecast at any level of time, product, and location aggregation • Completely meta data driven – change on the fly • Weekly and daily forecasting support • Simulate and compare different demand scenarios • Automate collaboration through workflow • Ensure all constituents submit numbers on time • Configurable push exception management automates review process

10. Improve Forecast Accuracy Designed for planners, not programmers (“PhD in a box”) Superior Bayesian-Markov Analytics Bayesian Estimator Historical data • Bayesian mix modeling • 15 model library • Auto-regressive moving average (ARMA) • Regression integrated winters • Logistic and logarithmic models • Ridge regression, Markov chain regression • Intermittent regression • Unlimited causal factors • Seasonality, weather, market indicators • Base + price + multi-event lift decomposition Bayesian combined model Multiple causal factors Forecast Estimator’s models • Promotion effects • Cross-product and cross-location effects • Pre and post event • Automatic outlier detection • Trend long, short, dampening • Missing data interpolation • Shape modeling and auto-correction • Regime change • Fit and forecast validation

11. Past Future Shape Demand for Profitability Leverage Advanced Forecasting and Modeling to understand the real impact of promotions and sales incentives • What incremental volume will result from a marketing program? • How will it impact the sales of other products? • How does a marketing program at a brand or product family level impact a specific item? • What were the indirect effects such as cannibalization and consumer stockpiling? • What is the ROI on my marketing and trade spending? • What is the predicted impact of future activity? • How does a promotion impact shipments and DC replenishments?

12. Welch’s Live on Demand Management, Trade Management Company • Leading producer of juices and jams • > Mio $750 Mio. revenues world-wide • Thousands of different promotions per year Planning problem solved • Promotion planning synchronized with demand planning Unique aspects of implementation • „One-Number“ Forecast as base for improved forecasting • Promotion planning integrated with demand planning • > 100 sales reps plan promotions • Post event analysis of promotions • Increased forecast accuracy at SKU level • Enables trade promotion planning to be integrated with RT S&OP • Reduced supply chain costs • Improved HQ and sales planning productivity

13. Top 10 Success Factors for S&OP 3 Critical Success Factors -- Process • Roles and responsibilities are defined and communicated • Manage by exception – and focus on the key issues • Gap closure (volume, revenue, and profit expectations) • Resource issues • Alignment of demand, supply, and new product plans • Performance issues • Implement quickly and improve each month Adapted from Top 10 Success Factors for Sales and Operations Planning by Oliver Wight

14. Top 10 Success Factors for S&OP 3 Critical Success Factors -- Leadership • Senior executives do not delegate their participation in the S&OP process • Senior executives utilize S&OP as their process for managing the business • Senior executives insist on the truth Adapted from Top 10 Success Factors for Sales and Operations Planning by Oliver Wight

15. Create consensus plan through continuous collaboration across sales, marketing, finance and customers Each participant gets tailored view Configurable worksheets Combine top down business planning with precise bottom up forecasts to project payments Automate process with workflow Send reminders Task notifications in dashboard Sales: Plan by Product Line Marketing: Plan by Region Sales Reps Asia Americas Sales Mgrs Marketing Forecast Sales Forecast Operations Forecast Finance Forecast Plant Mgrs Manufacturing: Plan by Plant Finance: Budget in Dollars Consensus Planning Inclusive consensus process improves plan quality and acceptance

16. Evolve to Real-Time S&OP Inputs display from entire collaboration group – Finance, Marketing, Operations, Key Customers and Suppliers Each S&OP participant has a configurable role-based view Integrated approval workflow process Review historical accuracy for each input

17. Interactive Management Review Typical S&OP Management Review agenda Sales and Operations Planning Process • What has changed since last month? • Are we on plan financially? • How are we performing to performance metrics? • What new risks do we need to consider? • What decisions need to be made now? • What decisions need to be made in the near future? • How are product families performing? • Are we on track with product development? • Do we have any critical constraints? • Is there any need to revise long term plans? Product Review Demand Review Management Review Shape Respond Sense Execute and Measure Adapted from “Enterprise Sales and Operations Planning” by Palmatier & Crum Supply Review

18. VTech Live on Demand Management, Real-Time S&OP Company • $1 billion in revenues, operating worldwide • Leading provider of cordless phones and electronic children’s toys • 85% of US revenues through Wal-Mart, Target, Best Buy, and Circuit City Planning problem solved • Real-time S&OP process driven by one demand number • Seasonal demand plans Unique aspects of implementation • Generates forecasts from customer POS data • Web-collaboration with customers • Automatic forecast evaluation and exception management • Implementation within 90 days • Increased order fill rate from 55% to 95% • Increased inventory turns by 100% • Reduced price protection claims by 40% • Reduced logistics costs by 65%

19. Top 10 Success Factors for S&OP People Tools Process Adapted from Top 10 Success Factors for Sales and Operations Planning by Oliver Wight

20. Constraint-Based Production Scheduling • Strategic Network Optimization Market Demand Forecasting Consensus Forecast New Product Forecasting S&OP Review Evaluate Supply Constraints Promotion Planning S&OP Outputs: Service levels Profitability Inventory Levels Promotions DRP MPS Safety Stock Demand Inventory Optimization Measure Financial and Customer Service Level Results Execute Oracle Closed Loop S&OP Planning Demand Planning Supply Planning S&OP Meeting Demand Data EDI 867 IMS data Excel Pedigree xml

21. Trading Partners Best in class Business Processes Operational Excellence Multi-Enterprise Collaboration Demand driven adaptive planning Supply Chain Risk Management Real-Time S&OP Role-based Portals Integrated Planning Functions Preconfigured Worksheets and Workbenches Promise, Distribute, and Replenish Execute to plan Real-Time Sales & Operations Planning Demand Management & Advanced Forecasting Predictive Trade Planning & Optimization Advanced Supply Chain Planning Strategic Network Optimization Global Order Promising Products Inventory Optimization Production Scheduling Collaborative Planning Network Design Demand Sensing And Shaping Platform Embedded Analytics Connectors Postponement Optimization Holistic Supply Planning Common planning data model WFL * LegacyERP * Demantra Future * EBS E1 … Oracle Demantra Overview Complete, best-in-class and integrated planning process platform

22. State-of-the-art and Scalable Architecture • Scalable • Handle millions of combination • Web-based user interface personalization • Dynamically configure • Drag-and-drop • Tailor workflow processes to unique company requirements • Demand Management adapts to your business process • Create alerts and exception rules • Customize reports on-the-fly • Dynamic open link to MS Excel • Work in disconnected mode Wendy's has ~1M combinations, 730 history daily buckets, 48 half-hour buckets per day for 90 historical days and 90 future days - over 9B data points

23. Proven Success – Many Live Customers

24. Oracle Demantra Demand Management Evolve at your own pace to a best-in-class solution Forecast based on attributes and product characteristics Compute promotional lifts and analyze impact of demand drivers Assumption based forecasting Start anywhere Leverage POS and channel data Forecast new product introductions Collaborate with customers Use advanced statistics and causal factors Complex alerts and custom worksheets Leverage POS and channel data Forecast new product introductions Collaborate with customers Use advanced statistics and causal factors Complex alerts and custom worksheets Manage rolling forecasts Collaborate with all constituents on one number Use basic statistics, alerts, and seeded worksheets Tailor worksheets for individual users Manage rolling forecasts Collaborate with all constituents on one number Use basic statistics, alerts, and seeded worksheets Tailor worksheets for individual users Manage rolling forecasts Collaborate with all constituents on one number Use basic statistics, alerts, and seeded worksheets Tailor worksheets for individual users Eliminate spreadsheets From less complex to best in class

25. <Insert Picture Here> Summary

26. CHANNEL DATA Oracle Demantra Demand Management Real-time demand sensing and collaborative consensus forecasting • Sense demand real-time • Sense demand more frequently, closer to the point of consumption • Capture demand and forecast at more granular level (store, shelf, attributes, product characteristics) • Achieve consensus demand number more quickly by involving all constituents at the same time, including customers • Quickly identify and react to demand changes and exceptions • Improve forecast accuracy • Leverage advanced statistics for more accurate demand number • Use any combination of quantitative or qualitative data to establish your base line forecast • High precision statistical forecasting, no statistical background required – Superior Bayesian-Markov forecast analytics • Forecast based on attributes and characteristics • Leverage Advanced Forecast Modeling for promotion lift decomposition and causal analysis • Shape demand for profitability • Plan new product introductions • Plan promotions and sales incentives • Identify cross selling opportunities • Evolve to real-time S&OP • Profitably balance supply, demand, and budgets Collaboration Workbench Marketing forecast Order history Customer sales Shipments Demand Hub and Seeded Worksheets