Manufacturing

Adaptive Planning provides manufacturing companies with a Corporate Performance Management system that facilitates coordinated planning and reporting for production and sales, automatically driving integrated P&L, balance sheet, and cash flow statements.

Planning & Reporting Challenges

Manufacturing budgeting and forecasting challenges include planning for corporate growth as demand changes, and matching supply (from the production group) with demand (from the sales group.) Production and sales planning must be coordinated, but the nature of their planning can be inherently dissimilar.

Production planning typically involves detailed units (product volumes, labor hours, etc.) This unit planning may be done in detail for specific products, and for specific types of labor (e.g., plant shifts, overtime, direct and indirect labor.) The product volume forecast must be tied to the required labor forecast, and inventory forecasts. Key performance metrics for production include labor rates, inventory turns, capital spending, costs per unit, and cost variances.

Sales planning may also involve units, though at a higher and different level than in production planning. For example, sales units may be planned by product family rather than by specific product. Other dimensions may include customers, channels, geography, and sales reps. Key performance metrics for sales include average prices, achievement of quota, returns, and more.

Spreadsheet-based systems are inefficient, error-prone, and fundamentally unsuited for the complex, dynamic planning and reporting required by manufacturing organizations.

The Adaptive Planning Solution

Financial planning and analysis in the manufacturing environment, then, requires a flexible budgeting, forecasting, and reporting solution with the ability to:

• Efficiently manage and coordinate operational and sales planning in relevant units, driving an integrated financial plan, with the capability to run what-if scenarios
• Provide driver-based planning, where the drivers can vary significantly by organization
• Coordinate product cost planning with revenue planning and balance sheet/cash flow planning
• Consolidate data from multiple functions
• Report on key metrics necessary for decision-making

Adaptive Planning has been successful helping over 130 manufacturing companies streamline their planning and analysis, because it has allowed them to:

• Coordinate planning for production and sales unit volumes, matching supply and demand, automatically driving integrated costs and revenues
• Integrate inventory planning with production and sales planning, to best utilize existing inventory and to accurately forecast future inventory requirements
• Plan multiple categories of employee expenses, such as direct and indirect labor, union and non-union pay grades, etc.
• Streamline complex consolidation of data from multiple plants, divisions, and functions, including international operations
• Report on and analyze cost variances and other key metrics, such as inventory turns, COGS, and average prices
• Analyze profit margins by product, geography, channel, and other dimensions
• Run what-if scenarios, e.g., for new products, changes in labor, or shifting markets, by manipulating key drivers and assumptions
• Use reports to perform variance analysis, including drill-down into underlying transaction detail
• Distribute report books via email for financial presentations such as board packages
• Improve accuracy and turnaround time in the planning and reporting process, and conduct frequent re-forecasting

Furthermore, Adaptive Planning’s Software as a Service (SaaS) model is a natural fit for the manufacturing industry, for the following reasons:

• It provides exceptional value. Adaptive Planning’s SaaS solution provides a five-year ROI of up to 650% compared to using spreadsheets, and has a total cost of ownership that’s up to 77% less than on-premise alternatives. And it’s low-risk, with the options of free trials and phased implementations.
• There is no IT involvement required. As a SaaS solution, no new hardware, software, or IT support is required for initial implementation or ongoing maintenance.
• It’s intuitive and easy to use. Adaptive Planning’s SaaS infrastructure and CPM engine save time and effort with built-in intelligence. Customers can avoid the wasted time associated with spreadsheet-based systems. And its web-based, highly-customizable, Excel-like interface is easy for all types of employees throughout a company to learn and use.

Select manufacturing customers include: