#32 Global S&OP implementation. Logitech story with Andreas Dannenberg

And today in Logistics Conversations we will have a very special guest, Andreas Dannenberg. Hello Andreas. Hello Adam, nice to be here. Thank you for coming to talk with us. I'm really interested in learning your views on the global SNOP implementation because it brings a really extensive experience in supply chain management across diverse industries and geographies. When I was looking through your LinkedIn profile, Zauważyłem takie rolę strategiczną w firmach jak Logitech i Cikita, gdzie prowadzili regionalne i globalne drużyny do optymizacji operacji i stworzenia rozwiązań skupionych na klientach.

Ostatnio widziałem, że również rozwijałeś swoją ekspertizę. Program at INSEAD. And you engage with a lot of startups, developing their operational and supply chain capabilities, addressing some challenges in planning, logistics and manufacturing. That's a pretty big scope of history in the supply chain. I don't know, I should add something else to what you have been doing recently. Dziękuję Adam. Myślę, że byłeś mi bardzo przyjaciel i przyjaciel. Myślę, że to bardzo dobrze powiedziałeś. Jedyną rzeczą, którą chciałbym tu dodać, jest to, że ostatnio zacząłem pracę w Kinetic Consulting, więc teraz jesteśmy nieco kolegami, skupiamy się na praktyce finansowej, operacyjnej, zakupie i sprzedaży.

Helping to bring, to develop value for businesses and help to optimize the value chain for clients. Yeah, so we did something similar to what we are doing with Magnavalor. This is a side story for today. The main story is actually how you help Logitech to build the global sales and operations planning process. But you know, maybe before we jump into that, let me ask you, Co rozumiesz z SNOP? Moim osobistym widzeniem jest to, że to jest bardzo nierozumiały proces w sprzedaży. To bardzo interesująca kwestia. Jestem pewien, że jeśli zapytasz innych ludzi, dostaniesz bardzo różne odpowiedzi. Niektórzy mówią o SNOP, niektórzy o IBP i innych agronomach.

For me, if I go to the essence of SNOP, sales and operations planning, in my definition, in my view, it is an opportunity for any organization to get all stakeholders together, which are involved in sales, operations and planning, and to have some type of synchronization discussion and talk about business opportunities. It's a very short and very to the point description. I like to say that SNOP in short is just bringing every week or every month everybody in the company to the same table. And sometimes this is a process that becomes inflated.

It becomes overcomplicated and people are missing what you just told. This is about synchronization. This is not about having a perfect number because nobody has a perfect number. This is about setting the goals together and actually knowing what we will do each other in supply chain, in sales or in marketing. So this is so simple and so hard at the same time, especially in companies that have scale. In companies that do not have a single location but are working globally or at least regionally in Europe and they have several warehouses, they have several plants where they are sourcing the goods.

Później, w różnych moich roliach w Logitech, w roli regionalnej czy globalnej sprzedaży, zawsze czułem, że S N O P jest podstawą mojego rola i jest bardzo krytyczna. As I mentioned before to get all business stakeholders together and have on a continuous and ongoing basis have critical business discussions talking about opportunities, about risks and really have a demand-supply synchronization conversation. And also how this aligns and feeds into the executive SNOP because sometimes you do have different conversations on a regional level So when you speak with your regional stakeholders, with your regional sales head and regional operations, the discussions are different than when you speak about an executive as an OP. It's different investment conversations, it's different risk conversations, but these all need to fit into each other and they all need to have a consistency and alignment

To znaczy, że to, co powstało na poziomie eksekutywnym, może być wykonywane na poziomie regionalnym, aby być zsynchronizowane jako organizacja, jako firma. Tak, czyli masz na myśli, że robisz proces na dwóch poziomach. Jeden na poziomie eksekutywnym, a drugi na poziomie regionalnym. Aby nasi słuchacze zrozumieli kompleksę procesu, Mówiłeś, że najpierw byłeś odpowiedzialny za EMEA. Jakie produkty, SKUs, lokacje były wtedy pod waszą przewodniczą? Wszyscy znają Logitech jako globalną firmę, ale nie wszyscy rozumieją, co to oznacza, żeby być globalnym.

Myślę, że Logitech zawsze miał ideę, że są to bardzo kompleksne i unikalne firmy. Im więcej mam szans, żeby porozmawiać z innymi organizacjami, tym bardziej zaczynam się zdawać, że to nie jest tak kompleksne. Ale daję Wam kilka liczb. Na całym świecie w Europie prowadziliśmy około 4 tysiąc różnych SKU, pomiędzy ponad 200 różnych linii produktów. Logitech ma jedną centralną górę dla Europy. Logitech is in the Netherlands and is basically represented by a regional sales and marketing headquarter, which is in Switzerland, but has regional or local sales and distribution offices all across Europe.

So, from a supply chain perspective, maybe not that complex. From a commercial perspective, I think more complex than many other organizations. So if you want to run an effective S&OP process where you have the key stakeholders together, there's a heck of a coordination effort to be completed to get all the decision makers together in order to have what you said, the weekly or the monthly conversation, which is kind of the highlight of an S&OP cycle process. Tak, jak wspomniałeś, kiedy rozmawiamy o 2000 SKU, nawet jeśli jest to rozmiary w kilku biznesowych instytucjach w Europie, w końcu jest to kilku tysięcy kombinacji lokacji SKU, które muszą być zmanażowane.

So when I started, no one was actually waiting for me to join and solve one of the key mysteries or one of the key business issues. So I spent a good time in my first few months. ...to make everybody aware of the process, make sure they understand that I'm here to help and to bring different stakeholders together. And I work mostly with the regional head of sales and marketing, because for me the commitment, the demonstrated commitment of key commercial leaders as much as operation leaders One of the key success factors for functioning SNOP cycle process and also the highlight which is the SNOP meeting that you can actually get tangible results out of these conversations.

It's a door which swings in both directions. It's operations to provide visibility to the business in terms of supply and current demand. But it's also visibility, the commercial side of the process provides back to operations on how is the business actually performing versus the demand. Having this conversation throughout the process, but also when you have the S&OP meeting and being transparent in the conversation, that's for me a major accomplishment, because there's always a risk The commercial teams are holding back because they want to be the heroes at the end of the month or the end of the quarter.

So they're holding back the true demand as much as supply chain or operations is maybe holding back on what are the true challenges in manufacturing or what are the inventory challenges. So having this open dialogue, this for me, number one, tangible results. Sometimes it means there will be a little bit of fighting at the beginning of the implementation. It has to be, right? You cannot be in a company, you cannot be always friends. And I think having a healthy debate is actually much better for the business than if everybody is always hugging each other and everything is fine. You need that healthy debate. And the second thing when I'm thinking about tangible results

And I think the consistency and the connected thinking, so that everybody was able to think really end to end, is a major opportunity to have conversations about risks as much as you can have conversations about opportunities. And sometimes, you know, and one thing, because I will lose a thought on that, Bardzo mi się podoba idea wizybilności, którą wspomniałeś. Mieliśmy z Piotrem nagrać odcinek o wizybilności w sprzedaży, ale chodziło o wizybilność w procesie fizycznym. Gdy rozmawiamy o S N O P i wizybilności, ważne jest zrozumieć, że to jest wizybilność ryzyk i możliwości w przyszłości. Z jednej z moich implementacji,

The key outcome was the fact that the company stopped working on the crisis mode, that we are not doing this month results. The company stopped planning after the fires to put them out. We actually started to talk on the meetings that in the two months time or three months time we have a gap between the current plan and the budget and the discussion Moved from Jesus, what we can do right now, to them went okay, let's plan something because we know that we need to do the targets. But the discussion became much more calm. It was more professional than before because people were no longer under pressure that today they are going to do something.

No, they were asked about what you are going to do in three months time. I potem powiedzieli, że może dzisiaj, nie wiem, ale wrócę do tego spotkania w następnym tygodniu lub w dwóch tygodniach i będę miał odpowiedź, bo mam czas do przygotowania. To jest wizybilność, o której mówisz, myślę. Zdecydowanie zgodzę z tobą. Właściwie podkreślasz jedną rzecz, I wasn't always very happy in some of the S&OP meetings I chaired or I participated because sometimes also in Logitech we were kind of falling back to discuss in the S&OP meeting or as part of the cycle process about the shorter term. Therefore you have SNOE, which is existing at Logitech and which is used to solve short term issues.

So SNOP should be really the focus on longer term to actually prevent to have all these short term issues. So you cannot always get everyone to only think about long term, but if your conversation, the majority of the time is looking at a longer term horizon and longer term means different things for different companies. But if you can really get the conversation on the longer term, it is a very tangible result because your shorter term is becoming easier because you solved bottleneck issues or demand issues, supply issues much earlier when you still had time to do this in a way that you don't have to spend extra money of the organization in order to solve them.

Było to około 6 do 9 miesięcy, dzięki dłuższym komponentom odpoczynku, wyjściu, cyklu, itd. After Covid that has really changed because a lot of the longer lead time components have become even longer. And with all the logistics disruptions also logistics has become to some degree slower. So the longer term became longer, which made it even harder to have long term conversations because the consumer electronic business The sales cycles are shorter term focused, so it's much harder to have that longer term conversation and the investment discussions for manufacturing, for components, etc. So it is important that you have the conversation and that you do an estimate and some guessing, but at least the conversation is happening to make decisions and not just procrastinate it until it becomes in the execution window.

It's easier when you have a company that is located on one market or even if it's selling to several markets it has like a one decision point. There is just one central headquarters and all the decisions are made there because it's possible in this organization to bring all the people to the single table as I mentioned. On the other hand when you have actually a company that has subsidiaries in several countries It means that there are several tables to bring the people in and then also a process on a higher level to run this executive SNOP that you mentioned. Maybe this is the reason why people are saying that SNOP is not working.

Maybe that's one of the reasons why they're saying it. I would like to understand obviously a little more what that statement should actually provoke or what the thinking behind is. I think as an organization, as a company also like Logitech, you always have to make choices what are actually the critical conversations. Because also in terms of complexity, what you mentioned before, Names mentioned with the retailer where you had this ten thousands of different combinations of SKUs. I think you need to bring it back and that's what we did at Logitech as well. What are the critical conversations to have? What are the top products which are important for your success?

What are the top challenges you have? You will not focus on the long tail of products in the conversation. You can delegate some of this also in different pivots of SNOP. At Logitech there is a category SNOP, so each product category has its own SNOP and you have a much higher chance to talk also about the longer tail of products and you have a regional or sales and marketing SNOP. There you really talk more about the business focus. So there's different levels you have in addressing it, but you need to make sure you're laser focused on what makes really a difference to your organization, because you can't discuss all.

And that goes back to maybe a Pareto principle, or it goes back to being clear with all stakeholders what are the critical conversations you would like to have. Właściwie to wraca do tematu scenariuszy spotkania. Musisz mieć agendę, musisz przejść przez ten proces w trochę rzadki sposób. Lubię to porównywać z treningową rutyną. Wcześniej, zanim zaczęliśmy nagrywanie, rozmawialiśmy o tym, że dzisiaj jeździłem z przyjacielem prawie 5 kilometrów. I to jest coś, co robię na cyklu. And this is the same with the SNOP. Czasami, kiedy słucham ludzi, którzy mówią, że S N O P nie działa, to jak słucham ludzi, którzy mówią, że zaczęły się trenować.

Spędziliśmy pierwsze 20 minut zrozumieniem nowego dashboardu. Kiedy wszyscy zrozumieli, następne spotkanie ma inny dashboard. Zawsze lubię mieć bardzo proste widoki, ale mieć je każdego razu. Wszyscy z tego miejsca są bardzo zrozumieni z jego kontentem. We can actually talk about the challenges. We don't have to challenge the content or if the data is correct and you waste all your time because you only have 45 minutes to an hour when you chair a meeting. So you want content conversation and you don't want conversation about different formatting of data. That's why the consistency in the training is super critical.

Yes, it's about having a routine, yeah? And maybe that's sometimes what people don't like about the SNO peak, because they are not able... Yes, it's boring, it's tedious, you need to do it all the time in the same way and you need to really put effort to get the results. It's the same as with bodyweight loss and training, yeah? To jest absolutnie to samo, tak. To jest naprawdę niezależne. I to wszystko dotyczy umiejętności. W jednym z implementacji, które prowadziłem w firmie, w której pracowałem od dłuższego czasu, trwało nam prawie trzy lata, by mieć proces w porządku.

Oczywiście wyniki były tam, ponieważ w końcu zmniejszyliśmy poziom stoków na prawie 40%. Czuliśmy, że liczymy na niebezpieczeństwa, ale to zajęło ponad dwa i pół roku, żeby przejść z procesem, żeby to zaimplementować, by to wspierać systemem, Periodically reworked the stock issues that we had there. And I think it's really comparable to the body weight loss because unhealthy stock is sometimes like a fat in the organism and you cannot burn it all at one time. When you have inventory levels on some products over a year versus the sales that you had up till now,

Na przykładie, o którym wspomniałeś wcześniej, że zajęło Ci 3 lata na implementację procesu. Powiedziałbym to właściwie inaczej i to jest także, jak patrzę na przyszłość. Proces ciągle się rozwija i zmienia. So if I wanna give you a lot of credit for what you have done, it didn't take you three years, you were evolving the process because you were learning throughout the process, the organization you're working with were learning and therefore the process was evolving because there's no, in my mind there's no end date to an SMP process implementation because it's constantly evolving. And that's how I look at the future of the process. It continuously will evolve. Będą to różne nazwy, ale zostaną to plany operacyjne i sprzedażowe, jeśli nazywamy je IBP czy coś innego.