5 More Things We Learned About the S&OP Process

SandOPWebinar.jpgAs a 360 degree integration tool between all functional departments, sales and operations planning (S&OP) is the operational blue‐print of the organization for profitably matching supply and demand. It brings functional silos together to develop a cohesive set of plans to deliver maximum value to the customer at the lowest total cost.

While effective in theory, putting S&OP into practice can be challenging for many organizations. And although S&OP pertains mostly to manufacturing facilities and tangible products, it can have significant impacts to service industries as well.

In our recent webinar, "How to Master S&OP for Simplifying Your Supply Chain," we learned how to take a more proactive and collaborative approach to managing supply chain complexity with S&OP.

 

Here are five more tips we learned about the S&OP process...

 1. Align your team around an S&OP process.

  • Involve senior leadership. (They are the ultimate decision makers for the business.)
  • Have a clearly-defined demand / supply strategy with your customers. (MTO vs. MTS vs. ETO vs. Postponement, etc. that effectively supports clearly defined SLAs)
  • Have a clearly-defined operations strategy for execution. (Level vs. chase vs. hybrid, etc.)
  • Standardize the planning horizons and levels of detail for each time fence.
  • Define ownership and S&OP process type to collect data for specific inputs.
  • Forecast at the appropriate level of product or service structure. (Rule of thumb: forecast at the product-family level.)

 

2. Integrate inventory optimization into the S&OP process.

  • Understand the demand. Visibility to customer demand through the S&OP process will allow for better planning.
  • Understand the product. Product characteristics and lead times are critical to understanding inventory levels.
  • Align the inventory strategy. Align the inventory strategy with the product, demand and execution strategies to drive flow and velocity through the entire supply chain.

 

3. Leverage tools for forecasting.

  • Inputs need to be clearly defined and understood –demand data and supply data.
  • New products should be included in the demand data.
  • Major assumptions should always be documented.
  • Verify the type of forecast technique being used in calculating the S&OP.

 

4. Measure the results of an S&OP process.

  • Tracking planned vs. actual  is the key to long-term success.
  • Planned vs. Actual forecast variances need to be explained and understood to increase future business decisions performance.

 

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5. Connect the four core areas of the businesses to make more supply chain-centric decisions.

Companies have begun to formally implement Supply Chain Advancement (SCA) methodology as a management system to connect the four core areas of their businesses to make more supply chain-centric decisions.



For more information about S&OP, download the webinar slides:Download e-Book

 

Posted by LeanCor Consulting

LeanCor Consulting is a division of LeanCor Supply Chain Group. Today’s complex supply chains require vision, strategies, and innovative techniques to create competitive performance. LeanCor Consulting is a trusted partner for advancing end to end supply chain performance through diagnostics, assessments, and full implementation. Global organizations leverage LeanCor Consulting to develop vision and strategy deployment plans for improvement in all supply chain functions. We focus on elements of speed, cost, quality, and delivery, and are able to develop innovative solutions from operational experience as a third party logistics partner.

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