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Sales and operations planning involves a number of sequential stops. Mistakes anywhere along the way can lead to inefficient planning, says Beveridge. A new approach is needed that allows companies to become more agile in a difficult business climate.
Under the traditional approach to S&OP, it can take upwards of two weeks to compile data. “By the time you get in front of the management team, that data has already changed,” Beveridge says. Qualcomm has adapted S&OP to a weekly cycle, under which it has more frequent discussions with key decision makers. They focus on the state of the company’s supply and demand balance, with an eye toward making “immediate course changes” if necessary. The company also conducts monthly S&OP meetings that focus on longer-range issues.
Qualcomm isn’t throwing out S&OP in its traditional form; it’s simply supplementing the practice with shorter-term solutions, says Beveridge. That becomes necessary “if you’re working at a company where demand is ever-changing. Our lead time is shrinking. We need to augment.”
Integration of supply and demand planning is essential to a company’s ability to react to volatility. Working with Kinaxis, Qualcomm brought together the two disciplines to scrutinize the company’s project road map, with a goal of implementing capable-to-promise functionality. In the process, it’s able to build what the customer wants, instead of what it forecasts demand to be.
The journey isn’t over yet. Having implemented available to promise and commitment to finished goods, Qualcomm next wants to extend its visibility and control back to raw materials and semi-finished goods. The ultimate goal is to make possible customization of product. “If we can delay the build-out of finished goods,” Beveridge says, “we’ll be better positioned to satisfy our customers.” And Qualcomm, for its part, will benefit from improved inventory optimization.
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