|By Jeri Donn||
|October 5, 2012 09:45 AM EDT||
Cloud computing has changed the way we work. People and businesses can now access services, applications and infrastructure over the Internet, with lower costs, higher productivity and an enhanced user experience.
While cloud computing has revolutionized many aspects of business, its effects have been quite dramatic across supply and demand management. Cloud-based Sales & Operations Planning (S&OP) is particularly powerful, connecting disparate demand, supply and financial data from a wide swath of packaged and home-grown enterprise information systems as well as a forest of spreadsheets, harmonizing everything into a single, meaningful plan. Delivering this supply chain "Big Data," analytics and reporting in the cloud means that it can be deployed, scaled, and interconnected quickly, enabling truly collaborative supply and demand planning.
Cloud makes S&OP faster, more transparent and collaborative. It works, it's proven, and it can immediately adjust as needed based on changing business demands. Applications delivered via cloud not only makes it easier to connect disparate business processes and applications, it eliminates the traditional ‘forklift upgrade' process of traditional software vendors. Keeping up with the latest innovations is automatic, so enterprises can focus on their business instead of technology issues.
An Early Commitment to Cloud for Enterasys
For wired and wireless network infrastructure supplier Enterasys Networks, the cloud was not simply a path to IT value and cost savings, but rather it is considered a strategic weapon for competing against very large competitors. Enterasys has rolled out a broad range of cloud solutions company-wide, from gmail and Google Apps, in addition, to replacing Microsoft SharePoint, with Box for cloud-based content management and on-line collaboration. An avid advocate for cloud, Enterasys CIO Dan Petlon is a member of the customer advisory board for its cloud CRM solution, SalesForce.com.
One of its early business processes to benefit from cloud computing is S&OP, a journey which began in 2005. By harnessing the power of the cloud through S&OP vendor Steelwedge to better align its demand and supply plans internally as well as with suppliers and customers, Enterasys has achieved better demand predictability, reduced inventory and contributed to a 95% rate of global customer satisfaction.
The company's achievements have not gone unnoticed. Because of their innovative S&OP use of cloud computing, Enterasys has been recognized by Gartner as embodying advanced S&OP Maturity. The company's exceptional S&OP practices have resulted in three years of sequential growth during a period its peers were plagued with sluggish growth. With cloud-based S&OP technology, Enterasys identified $3 - $4 million in savings per quarter, and, in 2012, achieved the milestone of eleven consecutive quarters of improved year-over-year growth.
Creating a Demand-Driven Mindset
Enterasys' wired and wireless network infrastructure & security solutions help enterprises stay in front of changing connectivity and security needs. Back in 2004, the company realized that the impact of constantly evolving global business change on its supply chain meant that improving its ability to predict demand was paramount. The firm subsequently embarked on a CEO-driven mission to transform itself into a lean, responsive and much more demand-driven business.
According to Vice President of Operations Jack Lyon, "We needed to do a better job at predicting demand, so that we could reduce excess and obsolete inventory; you own it and have to write it off." Lyon's baseline assessment of supply chain challenges also included order delays, sluggish market response, short product life cycles and organization silos of information. Compounding the problem was a completely outsourced supply chain with contract manufacturers building all of its products.
Enterasys embarked on a mission to create a worldwide collaborative integrated process and methodology that supports and delivers a demand plan with one agreed set of numbers. The company set out to find an IT solution incorporating a S&OP software platform.
S&OP Year One: Anticipating the Market
Within a year of Lyon's assessment, the company improved its bottom line by applying new techniques and cloud-based technology to a proven S&OP process. With the cloud-based S&OP platform from Steelwedge, Enterasys connected its people and processes to better understand operational tradeoffs when changes in the business environment did not align with its business plan. The company selected Steelwedge's S&OP solution because it is built on a single, cloud-based Integrated Business Planning platform used by large, global manufacturers across multiple industries.
Enterasys uses Steelwedge to unite people, process and technology for an agile planning environment and growing business.
In 2005 the Enterasys S&OP process brought together a cross functional group of leaders from sales, marketing, product management, operations, finance and supply chain. At the same time, Steelwedge integrated and normalized the data from each of those groups that resided in their respective systems such as SAP and Salesforce.com --and eventually added in BigMachines as well. From there, Enterasys drove significant and immediate changes in its business starting with better demand predictability, which in turn, directly affected its ability to respond to change.
For example, within a year, the company could determine in near real-time when a product was not selling as well as expected and drive demand-shaping activities to stimulate sales. Alternatively, if products were selling better than forecast, Enterasys could look first at sales data to see if the growth was sustainable, then reach out to its contract manufacturers to ascertain their capacity to boost production short and mid- term.
The bottom line was clear as well: decreased excess and obsolescence accounted for a whopping $3 to $4 million in savings per quarter initially.
But better demand planning was just the beginning of the ongoing transformation that Enterasys continues to drive from cloud-enabled S&OP. Armed with cross-company data and insights, the S&OP team moved its discussions from having enough supply to fill a particular order, to strategizing on improving gross margins. It regularly uses S&OP to power "what if" scenario planning across many facets of its business to understand the impacts of potential changes on customer satisfaction, revenue, sales and production.
Seven Years Later: Collaborating and Orchestrating
Enterasys has taken a purposeful, incremental "win" approach to driving advancement and ROI from its S&OP. Seven years later, the company has a global, collaborative and integrated S&OP process and methodology, powered with the Steelwedge cloud-based S&OP Platform. Its demand and supply plans are aligned internally and externally with suppliers and customers. In turn, better balance is delivering better predictability, better cash spend and better customer success.
Among the results Enterasys achieved from its mature use of cloud-based S&OP:
- Timely and accurate information through automation
- Cross functional alignment through a collaborative planning approach
- Higher customer satisfaction through better fulfillment
- Sustained high global customer satisfaction (ATP): 95%
- Customer fulfillment: over 97%
- Reduced inventory: 21% year over year
- Forecast error (MAPE): averaging 24%
- Revenue impact less than 5% (of material overhead/excess inventory)
Most impressive though was that Enterasys has realized year over year growth for the past three years (2009-2012). Even in 2011, where its sector saw a 3% drop, Enterasys kept growing and outperforming all other networking companies. Critical to that business stability is Enterasys' cloud-based S&OP foundation.
Crawl, Walk, Run, Sprint: the Promise and Perils of Optimizing Business in a Volatile World
Under Lyon's leadership, S&OP has become a key strategic lever for the company's continued market growth and competitive advantage. But Lyon isn't resting on his laurels. He maintains that the ever shifting marketplace requires constant vigilance on agile business planning to maintain great customer success.
"We traded up our problems, by transforming from a manually intensive supply chain into a lean and responsive organization," says Lyon. "For us, success is all about strengthening the collaboration with customers, delivering on our promises and meeting their expectations. Therefore, our optimization work is never done."
In summary, the cloud-based S&OP transformation at Enterasys resulted in the following improvements and lessons learned:
Stronger collaboration within the organization: A demand plan with one agreed set of numbers fosters alignment and a "we're in it together" culture, eliminating finger-pointing.
Better inventory balance: S&OP helps model the optimal inventory balance. Keeping the lowest possible inventory is not always the right solution: balance needs to be struck between revenue growth and high customer satisfaction while protecting the balance sheet.
Automation powers valuable analysis: Integrated data and executive level reports from the S&OP platform facilitate a collaborative, global S&OP process, freeing resource time for analysis vs. data gathering and manipulation. This, in turn, powers continuous improvement and faster process maturity.
Enabling "bluebird" opportunism: Insights from accurate S&OP data and timely "what if" scenario testing supports "bluebird" demand opportunities that weren't in the forecast at all. With tighter contract manufacturer collaboration, this provides reliable answers to questions like: Can we support it? If not now, when? What other options do we have for supply if we don't have it?
Lyon sums up Enterasys' S&OP success by stating, "We've been successful with S&OP because we've taken an iterative, ‘Crawl, Walk, Run, Sprint' approach to implementation, testing, measurement and advancement. "It's a non-stop journey. The only constant in business is change, whether its market disruptions, economic volatility, a natural disaster...or you name it: they all have varying degrees of impact on the process. Achieving a ‘sprint', may only happen for a matter of seconds before continuous improvement kicks in and you re-evaluate. But we have an agile foundation in place to help us deliver better, more consistently-regardless of the circumstance."
Through WebRTC, audio and video communications are being embedded more easily than ever into applications, helping carriers, enterprises and independent software vendors deliver greater functionality to their end users. With today’s business world increasingly focused on outcomes, users’ growing calls for ease of use, and businesses craving smarter, tighter integration, what’s the next step in delivering a richer, more immersive experience? That richer, more fully integrated experience comes ab...
Sep. 4, 2015 06:00 AM EDT Reads: 748
WebRTC has had a real tough three or four years, and so have those working with it. Only a few short years ago, the development world were excited about WebRTC and proclaiming how awesome it was. You might have played with the technology a couple of years ago, only to find the extra infrastructure requirements were painful to implement and poorly documented. This probably left a bitter taste in your mouth, especially when things went wrong.
Sep. 4, 2015 06:00 AM EDT Reads: 501
WebRTC services have already permeated corporate communications in the form of videoconferencing solutions. However, WebRTC has the potential of going beyond and catalyzing a new class of services providing more than calls with capabilities such as mass-scale real-time media broadcasting, enriched and augmented video, person-to-machine and machine-to-machine communications. In his session at @ThingsExpo, Luis Lopez, CEO of Kurento, will introduce the technologies required for implementing thes...
Sep. 4, 2015 05:00 AM EDT Reads: 127
The 5th International DevOps Summit, co-located with 17th International Cloud Expo – being held November 3-5, 2015, at the Santa Clara Convention Center in Santa Clara, CA – announces that its Call for Papers is open. Born out of proven success in agile development, cloud computing, and process automation, DevOps is a macro trend you cannot afford to miss. From showcase success stories from early adopters and web-scale businesses, DevOps is expanding to organizations of all sizes, including the ...
Sep. 4, 2015 05:00 AM EDT Reads: 1,664
The 17th International Cloud Expo has announced that its Call for Papers is open. 17th International Cloud Expo, to be held November 3-5, 2015, at the Santa Clara Convention Center in Santa Clara, CA, brings together Cloud Computing, APM, APIs, Microservices, Security, Big Data, Internet of Things, DevOps and WebRTC to one location. With cloud computing driving a higher percentage of enterprise IT budgets every year, it becomes increasingly important to plant your flag in this fast-expanding bu...
Sep. 4, 2015 04:30 AM EDT Reads: 1,704
ElasticBox, the agile application delivery manager, announced freely available public boxes for the DevOps community. ElasticBox works with enterprises to help them deploy any application to any cloud. Public boxes are curated reference boxes that represent some of the most popular applications and tools for orchestrating deployments at scale. Boxes are an adaptive way to represent reusable infrastructure as components of code. Boxes contain scripts, variables, and metadata to automate proces...
Sep. 4, 2015 02:15 AM EDT Reads: 129
In his session at @ThingsExpo, Lee Williams, a producer of the first smartphones and tablets, will talk about how he is now applying his experience in mobile technology to the design and development of the next generation of Environmental and Sustainability Services at ETwater. He will explain how M2M controllers work through wirelessly connected remote controls; and specifically delve into a retrofit option that reverse-engineers control codes of existing conventional controller systems so the...
Sep. 4, 2015 02:00 AM EDT Reads: 269
To support developers and operations professionals in their push to implement DevOps principles for their infrastructure environments, ProfitBricks, a provider of cloud infrastructure, is adding support for DevOps tools Ansible and Chef. Ansible is a platform for configuring and managing data center infrastructure that combines multi-node software deployment, ad hoc task execution, and configuration management, and is used by DevOps professionals as they use its playbooks functionality to autom...
Sep. 4, 2015 02:00 AM EDT Reads: 125
The 3rd International WebRTC Summit, to be held Nov. 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA, announces that its Call for Papers is now open. Topics include all aspects of improving IT delivery by eliminating waste through automated business models leveraging cloud technologies. WebRTC Summit is co-located with 15th International Cloud Expo, 6th International Big Data Expo, 3rd International DevOps Summit and 2nd Internet of @ThingsExpo. WebRTC (Web-based Real-Time Com...
Sep. 4, 2015 01:15 AM EDT Reads: 1,629
It’s been proven time and time again that in tech, diversity drives greater innovation, better team productivity and greater profits and market share. So what can we do in our DevOps teams to embrace diversity and help transform the culture of development and operations into a true “DevOps” team? In her session at DevOps Summit, Stefana Muller, Director, Product Management – Continuous Delivery at CA Technologies, answered that question citing examples, showing how to create opportunities for ...
Sep. 4, 2015 01:00 AM EDT Reads: 540
Puppet Labs has announced the next major update to its flagship product: Puppet Enterprise 2015.2. This release includes new features providing DevOps teams with clarity, simplicity and additional management capabilities, including an all-new user interface, an interactive graph for visualizing infrastructure code, a new unified agent and broader infrastructure support.
Sep. 4, 2015 12:45 AM EDT Reads: 587
SYS-CON Events announced today that Pythian, a global IT services company specializing in helping companies leverage disruptive technologies to optimize revenue-generating systems, has been named “Bronze Sponsor” of SYS-CON's 17th Cloud Expo, which will take place on November 3–5, 2015, at the Santa Clara Convention Center in Santa Clara, CA. Founded in 1997, Pythian is a global IT services company that helps companies compete by adopting disruptive technologies such as cloud, Big Data, advance...
Sep. 4, 2015 12:00 AM EDT Reads: 385
Skeuomorphism usually means retaining existing design cues in something new that doesn’t actually need them. However, the concept of skeuomorphism can be thought of as relating more broadly to applying existing patterns to new technologies that, in fact, cry out for new approaches. In his session at DevOps Summit, Gordon Haff, Senior Cloud Strategy Marketing and Evangelism Manager at Red Hat, discussed why containers should be paired with new architectural practices such as microservices rathe...
Sep. 4, 2015 12:00 AM EDT Reads: 448
IBM’s Blue Box Cloud, powered by OpenStack, is now available in any of IBM’s globally integrated cloud data centers running SoftLayer infrastructure. Less than 90 days after its acquisition of Blue Box, IBM has integrated its Blue Box Cloud Dedicated private-cloud-as-a-service into its broader portfolio of OpenStack® based solutions. The announcement, made today at the OpenStack Silicon Valley event, further highlights IBM’s continued support to deliver OpenStack solutions across all cloud depl...
Sep. 4, 2015 12:00 AM EDT Reads: 314
Puppet Labs is pleased to share the findings from our 2015 State of DevOps Survey. We have deepened our understanding of how DevOps enables IT performance and organizational performance, based on responses from more than 20,000 technical professionals we’ve surveyed over the past four years. The 2015 State of DevOps Report reveals high-performing IT organizations deploy 30x more frequently with 200x shorter lead times. They have 60x fewer failures and recover 168x faster
Sep. 3, 2015 11:15 PM EDT Reads: 126