In the third week of the month, the company's S&OP meeting brings top executives together to review the current supply and demand plan against the annual budget. Based on any trends occurring with supply and demand, or in the marketplace, the S&OP meeting could produce changes in the sales plan, which are then entered into Collaborator. Finally, toward the end of the month, district managers enter their seasonalized invoiced sales forecasts into the system, in part based on feedback from sales reps out in the field. The district managers' input feeds up the chain to the crop managers, and the process begins again.
The forecast horizon varies for the different participants in the forecasting process: for district managers, it's 12 months; for crop managers and business unit managers, it's 12 to 24 months; and for brand managers, it's one to five or more years. Currently, Syngenta is forecasting its entire NAFTA region sales volume through the Collaborator solution.
Putting the Process Before the Tool
Implementing the new process, and the new tool, has not been entirely without challenges, both technical and cultural in nature, according to Herrin. On the technical side, the issue was data accuracy in the various systems from which the forecasting engine pulls information, including the financial, ERP, manufacturing resource planning (MRP) and supply chain planning systems. Herrin says that in the initial phase of the project, the implementation team spent a good deal of time working with the caretakers of these other systems to ensure that data were up-to-date and would remain so moving forward. The effort was worth it, Herrin says, because ultimately the forecasting system is providing a central point where anyone in the company can see all the information that they need to do their job. "Instead of going to 50 different reports, they can go to one screen and look at all the information," he says.
On the cultural side, the challenge has been ensuring that all interested parties within the company buy into the new process and adopt the new tool. To ensure adoption, Herrin says that his team has come to take a process-based approach rather than focusing solely on the new solution. "A tool is just a way to automate a process," he says. "If you don't have the process implemented or lined-up to begin with, the tool is never going to be successful." To some extent, that approach has extended the roll-out period for the new tool, because the company has had to customize both the process and the tool to fit the unique organizational structure of this or that business unit. Over time Herrin's team also has had to take into account changes in business units or in the sales force's structure, requiring that they readjust the process or forecasting tool to keep up with the changes.
Despite the challenges, Herrin says that the forecasting initiative appears to be paying off already in that, combined with other project initiatives, the company has been able to achieve inventory reduction targets and has focused attention on tracking and reducing top-line and product mix forecast error. Syngenta also has been targeting an increase in inventory turns, but Herrin was unable to say at the time of the interview for this article whether that result would materialize to the extent hoped. The other key metric the company is tracking to judge the success of the forecasting project is reductions in lost sales; but, again, it remains too early to say to what extent the initiative is paying off in this area.
One unanticipated benefit of moving to the new process is that the company's commercial side, per force, is working more closely with the supply chain side. "Commercial can now see what supply chain is doing, because we have a supply-demand balance calculation in the Collaborator," Herrin explains. "Making that balancing process visible is prompting those two groups to work a lot closer together." For example, the new process is prompting supply chain and commercial to identify and share risk to an extent not seen in the past. Previously, for instance, if commercial had an upside of 20 percent they would put in a request for the 20 percent, and the company would make it. "Now supply chain can come back and say, well, if this is a risk of 20 percent, instead of me making the inventory, maybe I could hold flexibility," Herrin says. "Maybe I don't have to commit to the inventory. So we're better balanced between supply and demand plans."