Sales and Operations Planning (S&OP) WHAT S STOPPING YOU? Kaushik Dutta
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1 Sales and Operations Planning (S&OP) WHAT S STOPPING YOU? by Kaushik Dutta
2 Agenda Sales and Operations planning 10-step methodology Key considerations Summary 2
3 S&OP it s all about ALIGNMENT Vision Goals Technology (10%) Strategies Process (30%) Planning People (60%) Execution Results
4 10-step deployment methodology 1. Decide to do it 2. Form the design team 3. Educate everyone 4. Make a calendar 5. Design the process 6. Hold the first S&OP meeting cycle 7. Refine the process 8. Document the process 9. Train the users 10. Link S&OP to ERP
5 S&OP Process acceptance Ground Reality Source: AMR Research
6 Key consideration Goal clarity Alignment to Strategy Performance Measurement Metrics Decision making Forecasting Connecting planning to execution
7 Goal Clarity Demand Product Supply
8 Alignment to strategy S&OP objectives Supply Chain Strategy Product Differentiation Customer Service Cost Reduction Profitability Pricing Sales forecasting Demand Forecasting Demand Shaping Inventory Management Managing Supplies Distribution Planning Manufacturing Business Goals Market Share Outsourcing Sustainability Product Innovation Growth Acquisition
9 Performance Measurement Metrics Demand Forecast accuracy On time in Full Customer Service Financial Return on Assets Revenue Profitability Inventory Days of Inventory Inventory Turns
10 Decision making Business Model Governance model Globalization Span of Control Supply Chain objective S&OP processes Organization to support S&OP process People Metrics Data, Details and Tools Automate existing process or Change for better
11 Forecasting Choosing the right forecasting technique Time Series, Regression, Judgmental Choosing the forecast horizon to focus Choosing the right level of dimension to forecast Forecast definition to book, to confirm, to produce, to move, to deliver, to invoice Managing backlogs and carryovers Marketing cycle Sales Cycle Forecasting cycle Order booking cycle Communication, Awareness, Rewards and Recognition for Forecast Accuracy
12 Connecting Planning to Execution Supply Chain Strategy Product Family Country 3 months 6 months Demand Constraints Economy, Growth, Pricing, Trends & Seasonality, Market Supply Chain Planning (Tactical) Product Group Zone/State/District 1 3 months Orders/ Shipment Distribution Constraints Cost and Availability, Mode mix, Make or Store or Buy Demand constraints Shipment, Price, Promotions Supply Constraints Planned Availability Workcenter Constraints Shutdowns, Productivity Yield & Utilization Distribution Constraints Mode availability, Lot sizing as per mode, Safety Stock Requested date/ Promised Date ERP Production Constraints Product mix Supply chain planning (Operational) Open Orders /Production orders /Inventory Supply Constraints Cost, Availability, Supply mix Product/ SKU Order booking Open Orders WIP Customer 1 day 1 month Actual transport and supply availability Productivity Queue Times Sequencing Master data Planned start
13 Summary Laggards Vs Best-in-class Laggards Average Best in Class People Goal Alignment to Strategy Decision Making Process Performance Measurement Metrics Forecasting Technology Connecting Planning to Execution Source: Aberdeen Group
14 A successful S&OP achieving RESULTS Source: Aberdeen Group
15 By
16 Thank you.
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