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“Another danger is that, despite the long-term planning horizon, companies give in to the temptation to discuss the short-term perspective.”


Dave Manning (Oliver Wight): “A recession for- ces companies to reexa- mine themselves”


Richard van Del- den (Wavin): “The product managers’ knowledge and experience is just as important.”


Erik Brouwer (Per- fetti Van Melle): “We try to approach the process from the bottom up as much as possible.”


Alfons Willemsen (Involvation): “As the state of the economy began to improve, many companies had reduced stocks too rigorously.”


Steef van de Velde (Erasmus Univer- sity): “Beware of ‘group thinking’, the tendency of teams toadopt extreme standpoints.”


Derrien Jansen (FrieslandCampina): “The major benefit is that there are no nasty surprises.”


making processes, just as workflow-based tools can help manage the process. In recent years, large software suppliers such as JDA and Oracle have made con- siderable progress in the field of S&OP, says Manning. The traditional tools for Advanced Planning & Scheduling (APS) are less suitable. “They’re perfectly good at doing what they’re meant for, but they go into too much detail for S&OP purposes. APS goes down to individual item level, whereas in S&OP decisions are made at product-group level.”


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According to Willemsen, a scenario tool can be useful too, especially in the final S&OP session. “A tool which enables you to run through various scenarios during the session itself and to assess the out- comes in relation to the company’s objec- tives can help in making the right deci- sions.” He has no problem with the fact that some companies are still using Excel. “If that works for them, then that’s fine. The risk with advanced tools is that companies come to regard S&OP as a technological solution to their problems, which it’s not – it’s a process,” says Manning, and Wil- lemsen agrees. “Technology is of course important. It’s important to work with one set of data, for example. But the role of tools is often overrated. It’s much more


important to work with the right data and the right people.”


Product management


At Wavin, European supplier of plastic piping systems, S&OP is closely linked with the use of SAP APO, SAP’s advanced planning and scheduling system. This sys- tem generates and consolidates statistical forecasts, and the Distribution Require- ments Planning (DRP) module then uses details of the available stock to generate the sales wish list. For the purposes of rough cut capacity planning (RCCP), the module then translates the wish list into a concrete capacity planning for the manu- facturing plants and warehouses. “We’ve been working with APO for the past two and a half years, although not yet in all four of our regions. That is our intention, however, and it’s currently being imple- mented in the UK,” says Van Delden, Executive Director Supply Chain & Opera- tions at Wavin Group.


Phase in new products


The central S&OP meeting, where Wavin discusses the gaps between the DRP and the RCCP, takes place in the third week of the monthly cycle. “If we’re lacking capacity in the supply chain, for instance, we use this meeting to decide whether we should run an extra shift, hold discussions


with our customers or maybe even source products from our sister companies.” When drawing up the sales wish list, prod- uct management colleagues get involved too. They know when new products are being phased in, and which customers they will or won’t be relevant for. “When making forecasts, we often base the pro- file of a new product on that of an older product, but that always entails risks. The product managers’ knowledge and experi- ence is just as important, if not more so,” stresses Van Delden. But while product management exerts influence on the DRP, the same does not hold true in reverse; it is not the case that product development is speeded up or product launches are brought forward if sales levels are lagging behind the tar- gets. “We have an innovation rate that determines that so much percent of turn- over must come from new products each year. That is the KPI that product man- agement is measured against, but it’s far removed from S&OP,” says Van Delden, also alluding to the long lifecycle of Wav- in’s products. “Plumbers and installation companies form a fairly traditional sector. Pipe systems in which pipes are melted or glued together are only gradually start- ing to be replaced by systems with push fittings or rubber seals. Things probably change more quickly in other sectors.”


SUPPLY CHAIN MOVEMENT, No. 1, Q1 2012


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