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Home » Q&A | Levi Strauss Implements S&OE
Video

Q&A | Levi Strauss Implements S&OE

June 21, 2019
SupplyChainBrain

A complex product line and the demands of e-commerce were among the factors that drove Levi Strauss to embrace the concept of sales and operations execution. Aaron Baker, director of operations inventory management, explains.

SCB: How do you differentiate between S&OE, sales and operations execution, and S&OP, sales and operations planning?

Baker: S&OP involves a planning horizon of, say, three to 12 months, whereas S&OE looks at zero to 12 weeks. It’s a bit more short-term in nature. Another difference is in product granularity. With S&OP, you're looking at a brand family, while S&OE goes down to the SKU level, and is execution-oriented.

SCB: What drove Levi Strauss to implement S&OE?

Baker: There were a lot of different departments focused on their particular KPIs, and there wasn't a lot of connection among them. As an example, when sales and demand planning were creating their forecast, they were looking at it from a perspective of what they were detailing. Inventory’s KPI was how many units were in in-house and available. Order allocation was looking at the units coming in and when they were due. And distribution and logistics were looking at how many units were being shipped. These are really important KPIs, but there was no connective tissue between them. From a Levi Strauss perspective, we wanted to bring all those KPIs and departments together. So we started looking at S&OE as a means to connect all the dots.

SCB: How did you implement S&OE? What did you have to change to make it possible?

Baker: All departments shared the goal of wanting to solve this problem. We have four brands and multiple sourcing countries, and we're a make-to-stock operation. So there’s a tremendous amount of complexity. But by working together, we found the answer. Through S&OE, we could talk in a weekly cadence. We were able to send signals from sales to planning, supply and distribution. When you're in an S&OP meeting, various action items come up, and it becomes a closed loop. Now the output of the S&OE meeting can be driven back up into the S&OP meeting: here’s what we’re doing, here's what we’re thinking, and here's what we agreed on when we made a decision. It creates a connection that we hadn't seen before.

SCB: What were the biggest obstacles that you faced in implementing this process?

Baker: It was achieving clarity in how the process should run. One of the obstacles was figuring out how to flow the units: What does it take to get from a forecast to actual product going to our customers? So we sat down and did a basic process-flow map: what happens, who's in the swim lanes, who are the handoffs, where are the dependencies. It was an obstacle to bring everybody together, to get them to step outside of their typical day jobs and think about what needed to happen, and who gets the next position when we pass it along the supply chain.

The second big piece was visibility: Where are the units in the supply chain? Fortunately, we have a strong partnership-minded I.T. group. It was nice to have operational and I.T. stakeholders come together. It was a self-assembling team, which allowed us to bring all this together and create a dashboard. That replaced the Excel sheets, tables and version controls. Now, we all look at one dashboard, and it rolls up to the executive level and down to the detail level.

SCB: Did you have to develop all that in-house, or was there an off-the-shelf technology solution you could use?

Baker: We did use off-the-shelf solutions, but it was all in-house in terms of how we developed it to be able to deliver to our internal stakeholders.

SCB: If you were starting from scratch, what would you do differently?

Baker: I think what I would have done first is taken a look at everybody in the S&OP meetings and told them directly what we were thinking about,. I don't think it was totally clear to the S&OP stakeholders, and I would have brought them along the journey a bit earlier. Had that happened, we might have had a little more input.

SCB: What benefits did you realize from the implementation?

Baker: We saw unexpected benefits in the adoption. As we got more and more people working through the process, contributing to the weekly cadence calls and viewing all the information in our dashboard, it went quite quickly. We trained 150 users and then had an executive-level training session. It was no longer a question of who was making the decisions, and where the data was coming from. From sales and demand-planning perspective, we were able to see how we were doing against the forecast, and in getting units to our customers. That’s our ultimate goal, and we now have a clear line of sight throughout the process.

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