1 S & OP @ Nike / Eindhoven University / 17 November 2010
Sales & Operations Planning Paolo Polla / Lisa Cavaliere November 17 th Video 1 2 S & OP @ Nike / Eindhoven University / 17 November 2010 1971.from a van Product design/development in World Headquarters: Beaverton, Oregon, USA $19.4b vs. $27b in 2015 Worldwide Employees: +/- 34.400 Geographies: North America Western Europe CEE China Japan Emerging Markets 1971.from a van Product design/development in World Headquarters: Beaverton, Oregon, USA $19.4b vs. $27b in 2015 Worldwide Employees: +/- 34.400 Geographies: North America Western Europe CEE China Japan Emerging Markets 3 S & OP @ Nike / Eindhoven University / 17 November 2010 Sales/Marketing offices across Europe and Middle East European Headquarter in Hilversum Hilversum Employees: 1400 Sales/Marketing offices across Europe and Middle East European Headquarter in Hilversum Hilversum Employees: 1400 Nike Europe at a glance $5 billion Net Revenues (combined Product Engines) Three Dimensions 3 Product Engines: Footwear, Apparel, Equipment 8 Categories: Football, Running, Nike Sportswear, Womens Training, Kids, Action Outdoor, Basketball, Athletic Training 13 Territories 4 S & OP @ Nike / Eindhoven University / 17 November 2010 1 Distribution Center 3 Satellite DCs One supply chain / two GEOs Product life cycle 3-6 months (4 seasons) S&OP at Nike 5 S & OP @ Nike / Eindhoven University / 17 November 2010 S&OP at Nike Global S&OP Meeting Structure SER SENIOR S&OP GEO decision making GLOBAL decision making SUPPORTING S&OP High Level Structure 6 S & OP @ Nike / Eindhoven University / 17 November 2010 GEO preparation FUNCTIONAL MEETINGS S&OP PREMEETINGS SUPPORTING S&OP Product Engine Category Territory Leveraging Value Chain Thinking Product Mgt LEG 1 Forecast Sell & Buy LEG 2 Source & Make LEG 3 Deliver & Order Mgt LEG 4 Retail & Consumer LEG 5 Flow of product, information & cash starting when a new product is conceived & ending when the consumer buys at retail (& season cleaned up). Seasonal Clean-up LEG 6 7 S & OP @ Nike / Eindhoven University / 17 November 2010 Traditional Supply Chain Value Chain AVAILABLE PROFITABLE WINNING AT THE MOMENT OF TRUTH when & where the consumer shops S&OP in Europe 8 S & OP @ Nike / Eindhoven University / 17 November 2010 S&OP in Europe S&OP within Nike Nike Product Engine (Prod. Creation, Demand Plan) Finance Retail, Sales & Marketing Participants Customer Operations Goods Flow Planning S U P P L I C U S T O M EMEA S&OP 9 S & OP @ Nike / Eindhoven University / 17 November 2010 Performanc e metrics Nike Strategy & (Ops / Finance) Targets Demand & Forecasting Coverage Inventory position/ capacity Objectives I E R M E R S U P P O R T I N G S & O P S E N I O R S & O P G E O G R A P H Y S&OP Meeting Structure Europe S&OP S&OP S&OP S&OP Senior S&OP Western Europe Senior S&OP Central & Eastern Europe Corporate SER (Seasonal Execution Review) S&OP 10 S & OP @ Nike / Eindhoven University / 17 November 2010 Pre Meeting Demand & Supply P R E - M E E T I N G S S U P P O R T I N G S & O P G E O G R A P H Y Pre Meeting Demand & Supply Pre Meeting Deliver Pre Meeting FY Alignment Pre Meeting Retail FOS Apparel S&OP Footwear S&OP Equipment S&OP Category S&OP Territory S&OP S&OP Pre-meeting Decision Pre Meeting Demand & Supply Pre Meeting Deliver Confirm operational capability (short, mid and long range) Confirm inbound and outbound flows Decide direct ship targets and minimums Identify SKU clean up actions Buy risk Alignment on growth % Alignment on buy assumptions Align at once and close out forecast with projected supply Decide A/F strategy 11 S & OP @ Nike / Eindhoven University / 17 November 2010 Pre Meeting FY Alignment Pre Meeting Retail FOS Identify channels for close out liquidation Decide Retail FOS specific buys Agree discounts Identify early price reduction Agree contract cancellations and clean up Identify FY risks/opportunities Alignment country financial submission with S&OP plan S&OP Example Agenda PRODUCT MANAGEMENT FA11 SKU growth, productivity and ASP assumptions Agree product offering - spread over season Global product allocation FORECAST, SELL & BUY SU11 S&OP number aligned on supply and demand SU11 Align on Buy Risk for Season FA10 Mid Range capacity planning based on projections SU11 Review Negative Sales Actuals and align on forecast for future seasons SOURCE & MAKE HO10 & SU11 A/F strategy FY11-FY13 factory capacity vs. growth DELIVERY AND ORDER MANAGEMENT HO10 holds and contract management Forecast, Sell & Buy LEG 2 Source & Make LEG 3 Delivery & Order Product Mgt LEG 1 12 S & OP @ Nike / Eindhoven University / 17 November 2010 Follows cadence of working from future decision making back into operational decisions Agenda points reflect decision points needing to be reviewed within calendar month agenda Inclusion of decision making on future seasons will require close contact with global PE HO10 holds and contract management Inventory Re-alloaction for FA10 IB/OB flow planning: sign off on SP11 assumptions. Highlight risks & actions RETAIL AND CONSUMER Review FA10 G2N performance and create action plan HO10 inventory account cover: issues &opportunities SEASONAL CLEAN UP SU10 (and prior) inventory review and liquidation strategy FA10 Dynamic life cycle Order management LEG 4 Retail and Consumer LEG 5 Seasonal Clean up LEG 6 Industry S&OP: The Benefits 36% 38% 42% 50% 56% 56% Determining procurement requirements Determining outsourced manufacturing Improving asset utilization Reduction of Inventory Improving forecast accuracy Increasing revenue 13 S & OP @ Nike / Eindhoven University / 17 November 2010 26% 30% 30% 32% 32% 34% Developing & executing demand shaping programs Improvements in the perfect order Improving logistics planning Transportation & warehouse management Capital planning & asset management Improving new product launch Source: AMR Research Source: AMR Research Additional Benefits Improved (financial) forecast accuracy Cross functional support towards one goal Clear escalation path and proactive issue resolution Responsive to address issues 14 S & OP @ Nike / Eindhoven University / 17 November 2010 Improved customer satisfaction Improved delivery performance FY10 Achievements Global X-Geo Platform (collaborate) Geo 2 Geo support (China/Japan/Europe) Global S&OP summit X- Geo alignment on decision matrix, KPI Europe Evolved PE S&OP forums (incl. EQ) Senior S&OP forums reflecting Geo focus Maturity assessment for Europe conducted S&OP pre-meetings Process Excellence Merchandizing inclusion in S&OP expanded horizon S&OP tools revised to support Cyclical alignment and improvements 15 S & OP @ Nike / Eindhoven University / 17 November 2010 decision matrix, KPI sets and definitions (6 legs) Best practice sharing forum Establish escalation path to Global S&OP (SER) S&OP pre-meetings implemented Category S&OP (Football) Reflection of category lens in S&OP processes FACE implementation in ELC improvements Successful Year-End planning & execution Knowledge library established FFP to CPM requirements mapping External benchmarking Maturity Assessment Example: Decision making Decision making average ranking no reply What is the main focus in your meeting? 3.9 Info sharing Decision making 0 How effective is the S&OP forum with regards to decision making? 3.6 Not effective Very effective 0 How structured is your current meeting framework in supporting decision making? 3.9 Ad hoc Structured in line with dates and gates 0 Is the right audience present for decision making? 4.4 Audience varies and not structured Right audience defined for each meeting 0 Do you use 'what-if scenarios' to facilitate decision making? 3.0 Not at all All the time 0 - 0 2 3 1 7 3 2 2 3 6 8 6 9 7 5 9 6 2 0 0 0 3 0 1 1 4 3 4 8 + Decision making average no reply ranking 1 2 3 4 5 6 16 S & OP @ Nike / Eindhoven University / 17 November 2010 3.9 Info sharing Decision making 0 3.6 Not effective Very effective 0 3.9 Ad hoc Structured in line with dates and gates 0 4.4 Audience varies and not structured Right audience defined for each meeting 0 3.0 Not at all All the time 0 Overall rating - Decision making 3.8 Is the right audience present for decision making? Do you use 'what-if scenarios' to facilitate decision making? What is the main focus in your meeting? How effective is the S&OP forum with regards to decision making? How structured is your current meeting framework in supporting decision making? IB NE F IT UK AGS IT IB N F UK AGS IB NE F UK AGS IT UK AGS / F IB IT NE AGS IB F IT UK NE 1 2 3 4 5 6 IT NE F UK AGS IB Video 2 17 S & OP @ Nike / Eindhoven University / 17 November 2010 Questions? 18 S & OP @ Nike / Eindhoven University / 17 November 2010 Questions?