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What are the lessons learnt from the business case of S&OP at Danone Early Life Nutrition?

The mandate given to person in charge of implementing and leading an S&OP in a company is to be able to connect the two worlds: the world of sales and the world of operations and to pursue a primary objective secure supply of customers, which is especially true when consumers are vulnerable people like we have in ELN. In the case of ELN, the global dimension of our Supply Chain gives an additional challenge.

So, we had to start from local, build or rebuild the basics processes, change some tools and progressively implement S&OP step by step. Key success factors were multiple but the the most important is to first focus on people training and change management, especially for people without Supply Chain acumen at all layers of the organization.  Secondly, define clear metrics and KPIs to measure the progress and added value of the S&OP to various stakeholders, from local planners to senior management. Finally, strong interactions and common ambition with Finance function and stakeholders is a must. Without the strong partnership with them, the S&OP process can not progress to a higher step of maturity.

Of course, expectations behind S&OP are different depending functions and levels in the organization, but people in charge of S&OP must prove their legitimacy with all these counterparts to really be able to move the full organization towards a higher level of maturity.  

What are the challenges of going from S&OP to IBP in a highly volatile environment?

On the first level of maturity of an S&OP focused is done on primary performance KPIs: customer service level, inventories and cost with a prevalence to the first one. When moving to IBP, ambitions behind this process are increasing into two dimensions: pilot business to support growth (volume and value) thanks to the close proximity of Demand Planning to Sales and Marketing on short to long-term horizon and optimize all financials (from net sales to cash flow). Moreover, in a volatile environment, both challenges are even more complex: how to predict good demand (and what good enough means)? how to pilot and optimize inventories and capex in the narrow bandwidth of financial targets?

Probably, one of the answers is that a good IBP is not a magic crystal bowl but a solid process supported by the common interest of all functions to collaborate to reduce uncertainty. Some people say that the role of Supply Chain is to lead it. I tend to think, based on my last 10-year experience to build and drive S&OP in several countries and divisions of Danone,  that it brings more value and efficiency if we act and are perceived as a catalyst, not as a leader.    

Could you please explain the role of IBP as a strategic tool?

Clearly, IBP is a strategic tool in the sense it is the compass for the company, in our case for ELN division, to support and execute the long-term strategic orientations and objectives. The discipline and rigorousness brought by Supply Chain and Operations (tools, routines, timelines, master data) is a clear enabler, without which, the compass would lose the North. In Danone and ELN, we truly believe in this compass metaphor and therefore we call our IBP, the GPS for Global Planning System: a tool to tell us what route to take and systematically recalculating the best option (s) based on your priorities.  

What would you like to achieve by attending the 14th Annual Advancing S&OP to Integrated Business Planning conference?

Such events are very great opportunity to see and learn what is happening in other companies, in any categories or industries on all aspects of the S&OP: there are always good ideas, best practices and inspiration to take. It enables as well to develop a network and to create a stronger connection for future collaboration. If I could find at least two smart and simple ideas that I would steal with pride to implement into Danone ELN in our S&OP journey, that would already be of great added value. Hoping as well that my sharing about ELN could modestly contribute to S&OP adventure for others.