As a result of increasing volatility in demand many companies are busy implementing Sales & Operations Planning. They try to get beyond balan- cing forecasted demand and manufac- turing volumes and incorporate finan- cial budgets and business scenario. What should companies consider to get to a next level in S&OP? Supply chain consultancy Involvation and Supply Chain Movement created a compre- hensive mindmap to give a practical overview of all the aspects to consider for improving S&OP.
Oliver Wight Involvation others
# Supply # Sales
# Finished Products # Components
Industry Main driver
# Sales/Supply units # SKU’s
# Bill to customers Footprint
Develop Operational plan Demand/supply matching Profitability
Long Term Mid Term Short Term
Update files Generate data Analysis of data Disseminate data
Other production facilities Contract manufacturing Bottleneck materials
Identify issues Develop scenarios
Volume impacts Value impacts
GAP analysis vs. business plans KPI’s Accountability
MINDMAP MANUAL S&OP to the next level
The central questions are whether and how to bring S&OP within your organisation to the next level. An S&OP journey can be triggered by significant internal or external changes or by increased pressure and performance requirements. We believe in a growth model where the necessity of the next step is always
Summarize actions Disseminate actions
driven by the added value of the next maturity level.
S&OP as a mindset
Why is S&OP so popular at the moment? Is it a hype? S&OP is not new, but there are valid reasons for the increased interest for it. E.g., the financial crisis put more pressure on working capital. Many
Continuous improvement Decide on issues
Executive meeting High
Matching demand and supply Set agenda for executive meeting Review pre-meeting decisions
Components Forecasting Bussiness assumptions 4 PROCESS Demand planning S&OP maturity Current Complexity 1 COMPANY
companies found out though, that aligning activities for structurally freeing up capital proved much more difficult than expected. Is S&OP the solution? Partly, because it drives the required alignment within your company. A solid S&OP process is therefore an ongoing requirement. The right process, data and tools therefore are important, but the
overriding prerequisite is an S&OP mindset. Once S&OP is a common and shared mindset, you will have created fertile ground for sustainable and cross-functional alignment.
Biggest challenge in S&OP maturity Why are so many companies strug- gling with S&OP?