Sales and operations planning may be the heart of tactical planning of any business, but that doesn't mean that every supply chain manager really understands how to make the process pump efficiently. Even those who do have a grasp of needed improvements often don't know how to optimize things while keeping daily operations up and running. Clearly, a how-to manual would be useful, and it just may be that one is now available.
Harpal Singh, CEO of Supply Chain Consultants, has published A Practical Guide for Improving Sales and Operations Planning. Available from Amazon.com, the 90-page book retails for $19.95. Its intended audience is the supply chain manager tasked with running an effective supply chain, and who needs a framework for introducing such initiatives as Six Sigma and lean manufacturing.
Most such professionals don't need to be convinced that the S&OP process keeps supply and demand in balance. The challenge is to keep them balanced. That ideal state should improve customer service, lower finished goods inventory, stabilize production rates, and improve material procurement. Moreover, it should create some real synergies among leaders in sales, operations, finance, IT and customer service.
Singh has detailed "five steps to success" -- admittedly, language that may sound too much like that in trendy (and often useless) self-improvement books. But keep reading; the key word is "detailed." Each step - Understand Customer Demand, Analyze Inventories, Routinely Create a Demand Plan, Balance Supply and Demand, and Implement S&OP - is carefully defined, then specifies goals to be achieved, major tasks involved, technology deliverables (requirements), supportive processes and the expected benefits. S&OP is a skeletal term; with his five steps, Singh puts real meat on those bones.
Two other highly useful components bear mentioning. First, the section devoted to organization of supply chain data walks the user through forecasting and inventory analysis, and is designed to illustrate the importance of moving beyond the transactional stage. In other words, the supply chain manager needs to see beyond individual shipments and orders if he or she is to gain useful business insights. Second, the section on modeling supply chains recognizes that while every company is unique, their supply chains generally include the same elements: decision variables, time horizons, time buckets, objectives, aggregations and classifications, parameters and constraints. Singh addresses each component with precision, yet advises users to keep the model as simple as possible.
A Practical Guide for Improving Sales and Operations Planning might be the road map you need on the S&OP journey. An added benefit is that it points out much to see along the way.
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