• Performance Management solution for S&OP and forecasting at Auping

Bed manufacturer Auping has existed for more than 130 years and is taking a strikingly innovative course. Auping is shaking up the industry by, besides design and high quality, also fully committed to sustainability and leasing beds. To support this strategy, the company is switching to Board for its planning processes.

By Danielle Gruijs, April 2020
Auping produces all its beds in a factory in the Netherlands. This has an impact on the wishes for the control. “From Auping we are both a retailer and a factory. As a retailer you are often flexible, but we also have to take the factory into account. Our goal is a well-discussed plan, where everyone knows what the considerations are. We want better information, and that with less effort,” says Paul Platenkamp of Koninklijke Auping B.V. about the reason to switch to Board.
“Our goal is a well-discussed plan, where everyone knows what the considerations are. We want more information, and that with less effort.”

From sales planning to factory workforce planning

The ambition is to be able to adequately plan from the budget model to sales and production, including the number of people needed in the factory. Paul, therefore, envisages different phases: “If you look at Board as a platform, I still have many ideas. The first phase revolves around setting up the sales forecast, cost budgets and the P&L. In the next phase we want to set up Sales & Operations Planning. Then we want to automate the cash flow and liquidity planning from finance. Ultimately, we want to cluster as much as possible in one system.”

Strategy based on sustainability

This ambition is in line with Auping’s growth strategy, in which the bed manufacturer is fully committed to sustainability. “Mattresses are very polluting for the environment. That is why we have now developed a fully circular mattress,” says Paul. The company also takes a critical look at environmentally harmful materials. “For example, we stopped using high-gloss on the beds. A difficult decision if you look for profit, but we think it is too harmful to the environment.”

The switch to circular mattresses is a significant change for the company. “60% of our business goes to a different revenue model: selling or leasing circular mattresses. This first requires substantial investments, but in the long term we naturally expect to recoup this. Our sustainable mission is based on an idealistic conviction, but of course, we also want to make a profit.”

This will also bring significant changes to the entire bed sector. “If you look at the market, we are the right company to do this. We are the opinion leader,” says Paul. For example, Auping recently won an award for the first complete circular mattress in the world. Besides, Auping is critical, says Paul: “It must continue to look luxurious and of course, lie comfortably.”

Calculating circular business cases

This strategy demands a lot from finance. “As a controller, these are difficult business cases to calculate. You earn more on an existing mattress. With a circular mattress you only get the raw materials back for free after four to five years. At that point, you will start earning more money again,” explains Paul.

There is also an area of ​​tension between the various interests: “Sales want the highest sales next year, marketing wants that in 2 years and management wants continuity. We calculate all business cases from finance, and we must occasionally step on the brakes,” Paul continues.

The new planning process will help with this. “You have to follow these developments very carefully from finance. You need good systems for that,” says Paul. “With a good Performance Management solution you can form the connection between the different departments within your company,” agrees Bart van Dillewijn, project manager from Finext. 

Choice of Board as the Performance Management platform

Paul is enthusiastic about Board. “It is a tool today, mainly because of the functionalities in the screens. For example, anyone can increase all fields by a few percent to see the effect. This way, you can easily calculate and compare the different scenarios.”

The choice for Board was almost unanimous. “With us, everyone concluded that this platform is the best solution for our problem. We can provide a basic version of the budget, where the category managers can make their adjustments. After that, the budget goes to all markets, which also make their adjustments before the final version of the budget is determined. All these versions will be kept, as will the comments box where you can see why we chose something.”

We opted for a co-build approach together with Finext

The following phases are introduced from a “co-build approach”. “Finext helped us to move from the great design to a prototype. We want to take on 60-70% ourselves in the next phase, under the supervision of Finext.” Bart: “Because Board is based on low coding, the platform is very suitable for co-build.
“Everyone will soon be able to focus on the profession where their expertise lays. Then the category managers and marketing people themselves are in charge.”
When setting up a prototype for a planning process, the degree of detail is often a topic of discussion. This is also the case with Auping. “The possibilities are countless, and you can design the platform; however, you want. You have to make clear choices in this. Take the mattresses, which come in different widths and lengths. What details do you really need to make planning decisions? The system can handle a lot, but you don’t want to budget on every bed leg,” says Robbin van Wijk. As a consultant from Finext, Robbin is intimately involved in the implementation of Board at Auping.

Transformation of the Financial function with Board

Paul expects the new platform to change the role of finance. “After Q1, we used to ask everyone where they are and what they expect. Then you keep people away from their work. Now that this is becoming easier, everyone can focus on the profession they are good at. Soon the category managers and marketing people will be in charge of themselves.”

Paul also expects positive changes within the rest of the organization: “Auping wants to accelerate as a company and must, therefore, be able to adjust its plans continuously. And we just need this technology for that.”

Planning, Budgeting & Forecasting Board