Welcome!

@CloudExpo Authors: Liz McMillan, Elizabeth White, William Schmarzo, Rene Buest, Pat Romanski

Related Topics: @CloudExpo, Java IoT, Microservices Expo, Containers Expo Blog, Agile Computing, Apache

@CloudExpo: Case Study

Case Study: Cloud-Based Sales & Operations Planning in the Cloud

How network provider Enterasys used cloud-based S&OP technology to drive growth and save millions per quarter

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."

More Stories By Jeri Donn

Jeri Donn is Vice President of Cloud Services at Steelwedge Software, responsible for building, deploying and maintaining the company’s cloud environment. Steelwedge commands the global market for cloud-based Integrated Business Planning and is trusted by Global 1000 companies including: Lenovo, Jaguar Land Rover, Sony, and Emerson. Steelwedge's cloud-based Sales & Operations Planning (S&OP) software connects people, process and technology to power a single view of a company's business, powering reliable "what if" scenario modelling that pinpoints the financial impact of supply-demand trade-off decisions. Visit www.steelwedge.com.

Comments (0)

Share your thoughts on this story.

Add your comment
You must be signed in to add a comment. Sign-in | Register

In accordance with our Comment Policy, we encourage comments that are on topic, relevant and to-the-point. We will remove comments that include profanity, personal attacks, racial slurs, threats of violence, or other inappropriate material that violates our Terms and Conditions, and will block users who make repeated violations. We ask all readers to expect diversity of opinion and to treat one another with dignity and respect.


@CloudExpo Stories
"We want to show that our solution is far less expensive with a much better total cost of ownership so we announced several key features. One is called geo-distributed erasure coding, another is support for KVM and we introduced a new capability called Multi-Part," explained Tim Desai, Senior Product Marketing Manager at Hitachi Data Systems, in this SYS-CON.tv interview at 20th Cloud Expo, held June 6-8, 2017, at the Javits Center in New York City, NY.
There is a huge demand for responsive, real-time mobile and web experiences, but current architectural patterns do not easily accommodate applications that respond to events in real time. Common solutions using message queues or HTTP long-polling quickly lead to resiliency, scalability and development velocity challenges. In his session at 21st Cloud Expo, Ryland Degnan, a Senior Software Engineer on the Netflix Edge Platform team, will discuss how by leveraging a reactive stream-based protocol,...
DevOps at Cloud Expo, taking place October 31 - November 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA, is co-located with 21st Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry players in the world. The widespread success of cloud computing is driving the DevOps revolution in enterprise IT. Now as never before, development teams must communicate and collaborate in a dynamic, 24/7/365 environment. There is no time to w...
Internet of @ThingsExpo, taking place October 31 - November 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA, is co-located with 21st Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry players in the world. The Internet of Things (IoT) is the most profound change in personal and enterprise IT since the creation of the Worldwide Web more than 20 years ago. All major researchers estimate there will be tens of billions devic...
"The Striim platform is a full end-to-end streaming integration and analytics platform that is middleware that covers a lot of different use cases," explained Steve Wilkes, Founder and CTO at Striim, in this SYS-CON.tv interview at 20th Cloud Expo, held June 6-8, 2017, at the Javits Center in New York City, NY.
SYS-CON Events announced today that Calligo, an innovative cloud service provider offering mid-sized companies the highest levels of data privacy and security, has been named "Bronze Sponsor" of SYS-CON's 21st International Cloud Expo ®, which will take place on Oct 31 - Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. Calligo offers unparalleled application performance guarantees, commercial flexibility and a personalised support service from its globally located cloud plat...
"With Digital Experience Monitoring what used to be a simple visit to a web page has exploded into app on phones, data from social media feeds, competitive benchmarking - these are all components that are only available because of some type of digital asset," explained Leo Vasiliou, Director of Web Performance Engineering at Catchpoint Systems, in this SYS-CON.tv interview at DevOps Summit at 20th Cloud Expo, held June 6-8, 2017, at the Javits Center in New York City, NY.
21st International Cloud Expo, taking place October 31 - November 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA, will feature technical sessions from a rock star conference faculty and the leading industry players in the world. Cloud computing is now being embraced by a majority of enterprises of all sizes. Yesterday's debate about public vs. private has transformed into the reality of hybrid cloud: a recent survey shows that 74% of enterprises have a hybrid cloud strategy. Me...
SYS-CON Events announced today that DXWorldExpo has been named “Global Sponsor” of SYS-CON's 21st International Cloud Expo, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. Digital Transformation is the key issue driving the global enterprise IT business. Digital Transformation is most prominent among Global 2000 enterprises and government institutions.
SYS-CON Events announced today that Datera, that offers a radically new data management architecture, has been named "Exhibitor" of SYS-CON's 21st International Cloud Expo ®, which will take place on Oct 31 - Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. Datera is transforming the traditional datacenter model through modern cloud simplicity. The technology industry is at another major inflection point. The rise of mobile, the Internet of Things, data storage and Big...
Kubernetes is an open source system for automating deployment, scaling, and management of containerized applications. Kubernetes was originally built by Google, leveraging years of experience with managing container workloads, and is now a Cloud Native Compute Foundation (CNCF) project. Kubernetes has been widely adopted by the community, supported on all major public and private cloud providers, and is gaining rapid adoption in enterprises. However, Kubernetes may seem intimidating and complex ...
"Outscale was founded in 2010, is based in France, is a strategic partner to Dassault Systémes and has done quite a bit of work with divisions of Dassault," explained Jackie Funk, Digital Marketing exec at Outscale, in this SYS-CON.tv interview at 20th Cloud Expo, held June 6-8, 2017, at the Javits Center in New York City, NY.
"We focus on SAP workloads because they are among the most powerful but somewhat challenging workloads out there to take into public cloud," explained Swen Conrad, CEO of Ocean9, Inc., in this SYS-CON.tv interview at 20th Cloud Expo, held June 6-8, 2017, at the Javits Center in New York City, NY.
"DivvyCloud as a company set out to help customers automate solutions to the most common cloud problems," noted Jeremy Snyder, VP of Business Development at DivvyCloud, in this SYS-CON.tv interview at 20th Cloud Expo, held June 6-8, 2017, at the Javits Center in New York City, NY.
"I think DevOps is now a rambunctious teenager – it’s starting to get a mind of its own, wanting to get its own things but it still needs some adult supervision," explained Thomas Hooker, VP of marketing at CollabNet, in this SYS-CON.tv interview at DevOps Summit at 20th Cloud Expo, held June 6-8, 2017, at the Javits Center in New York City, NY.
"We are still a relatively small software house and we are focusing on certain industries like FinTech, med tech, energy and utilities. We help our customers with their digital transformation," noted Piotr Stawinski, Founder and CEO of EARP Integration, in this SYS-CON.tv interview at 20th Cloud Expo, held June 6-8, 2017, at the Javits Center in New York City, NY.
"We've been engaging with a lot of customers including Panasonic, we've been involved with Cisco and now we're working with the U.S. government - the Department of Homeland Security," explained Peter Jung, Chief Product Officer at Pulzze Systems, in this SYS-CON.tv interview at @ThingsExpo, held June 6-8, 2017, at the Javits Center in New York City, NY.
"We're here to tell the world about our cloud-scale infrastructure that we have at Juniper combined with the world-class security that we put into the cloud," explained Lisa Guess, VP of Systems Engineering at Juniper Networks, in this SYS-CON.tv interview at 20th Cloud Expo, held June 6-8, 2017, at the Javits Center in New York City, NY.
Your homes and cars can be automated and self-serviced. Why can't your storage? From simply asking questions to analyze and troubleshoot your infrastructure, to provisioning storage with snapshots, recovery and replication, your wildest sci-fi dream has come true. In his session at @DevOpsSummit at 20th Cloud Expo, Dan Florea, Director of Product Management at Tintri, provided a ChatOps demo where you can talk to your storage and manage it from anywhere, through Slack and similar services with...
"We were founded in 2003 and the way we were founded was about good backup and good disaster recovery for our clients, and for the last 20 years we've been pretty consistent with that," noted Marc Malafronte, Territory Manager at StorageCraft, in this SYS-CON.tv interview at 20th Cloud Expo, held June 6-8, 2017, at the Javits Center in New York City, NY.