Growth through Sales & Operational Planning at Auping

Bed manufacturer Auping wants to stay strikingly innovative. By focusing on sustainability and bed leasing in addition to design and high quality, Auping is shaking up the industry. To support this strategy, the company is switching to a modern platform for its planning processes.

Performance management solution for S&OP and forecasting.

Auping produces all of its beds itself in a factory in the Netherlands. That has an impact on the requirements for controls. "From Auping's point of view, we are both a retailer and a factory. As a retailer you are often flexible, but we also have to take into account the factory. Our goal is a well discussed plan, where everyone knows what the trade-offs are. We want better information, and that with less effort," Paul Platenkamp of Koninklijke Auping BV explains the reason for switching to the planning platform. The move to a new Performance Management solution at Auping seems to tie in directly with the growth ambition.

From sales planning to workforce planning in the factory

The ambition is to be able to plan all the way from the budget model to sales and production, including the number of people needed in the factory. Paul therefore decribes several phases: "If you look at our new platform, we have implemented a direction to IBP. The first phase was all about putting down the sales forecast, cost budgets and the P&L. In the next phase, we have set up Sales & Operations Planning. Then, from finance, we have automated cash flow and liquidity planning. Ultimately, we have clustered as much as possible into one system."

"Our goal is a well-discussed plan, where everyone knows what the trade-offs are. We want better information, and with less effort."

Strategy based on sustainability

This ambition fits into Auping's growth strategy, in which the bed manufacturer is fully committed to sustainability. "Mattresses are very polluting for the environment. That's why we have now developed a fully circular mattress," Paul says. The company is also looking critically at environmentally damaging materials. "For example, we stopped using high gloss on the beds. A tough decision if you look at it from a profit perspective, but we think it's too damaging to the environment."

The move to circular mattresses is a substantial change for the company. "Of our business, 60% is going to a different revenue model: selling and or leasing circular mattresses. This requires considerable investment at first, but in time we expect to earn this back, of course. Our sustainable mission is instilled from an idealistic conviction, but of course we also want to make a profit."

This is also going to bring big changes for the entire bed industry. "If you look at the market, we are the right company to do this. We are the opinion leader," Paul states. For example, Auping recently won an award for the world's first completely circular mattress. In doing so, Auping is critical, Paul explains, "It has to continue to look luxurious and, of course, lie nicely."

Calculating circular business cases

This strategy does demand something of finance. "As a controller, these are difficult business cases to calculate through. On an existing mattress you earn more. On a circular mattress, you only get the raw materials back for free after four to five years. At that point you start earning more on it again," Paul explains.

There is also a tension between the different interests: "Sales wants the highest sales next year, marketing wants that in two years, and from management you want continuity. From finance, we calculate all the business cases, and we have to hit the brakes every now and then," Paul continues.

The new planning process is going to help with that. "You have to follow these developments very closely from finance. You need good systems for that," Paul believes. "With a good Performance Management solution at Auping, you can form the link between the different departments within your company," agrees Bart van Dillewijn, project manager from Finext.

Choice of a new Performance Management solution at Auping

Paul is enthusiastic about the new platform. "It is a tool of today, especially because of the functionalities in the screens. For example, anyone can increase all the fields themselves by a few percent to see the effect. So you can easily calculate the different scenarios and put them side by side."

The choice of the platform was almost unanimous. "With us, everyone came to the conclusion that this platform is the best solution for our problem definition. We can put down a basic version of the budget, on which the category managers can make their adjustments. Then the budget goes to all the markets, which also make their adjustments before the final version of the budget is set. All these versions are preserved, as is the comments box where you can see why we chose something."

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