Interview Supply Chain
thinks in terms of longer-term business
decisions; such as bringing new products to
market, opening new channels to market or
Andrew Kinder: Think in terms
changing global supply lines. Advocates at
of the bigger supply chain
this end of the maturity model don’t even like
picture over a longer horizon.”
to use the word ‘Operations’ in S&OP – it
marks it out as an operational plan. Instead,
they refer to it as Integrated Business
Planning (IBP), bringing in all the functions by your customer doesn’t follow until the
of the business; including R&D, Marketing, perfect order is delivered. And there are
Procurement and Finance. “However, despite many other examples where inefficiencies in
its compelling benefits and being the true the supply chain affect cash-to-cash cycles –
end-goal of S&OP, we have found that this having too much inventory compared to actual
end of the spectrum is still only seen at a very demand is another example. However, ‘S&OP
strategic level within the larger organisations,” leaders’ are able to run a more efficient supply
said Kinder. “Smaller companies still tend to chain by anticipating demand better and
perceive of S&OP as something between the looking at supply optimisation scenarios in
first and second definitions.” a more holistic way. Again, this would likely
be best achieved by adopting as close to
Distant goal Integrated Business Planning as possible.”
Nevertheless, Kinder stresses that whilst a 30 per cent faster cash-to-cash cycle time
mass adoption of IBP is still a distant goal, than average companies. “Reducing the “So,” concludes Kinder, “thinking in terms of
companies that do embrace it have a lot to cash-to-cash cycle time has become a key the bigger supply chain picture over a longer
gain – not least, in improved operational measure of supply chain health,” said Kinder. horizon can not only make a company’s
metrics, greater competitiveness and higher “In simple terms, any fault line in the delivery supply chain regime far more efficient at an
margins. According to a recent Aberdeen of product to the customer inevitably results in operational level, it can also ensure a much
Group report, leading S&OP leaders have elongation of the cash cycle time – payment more healthy bottom line.” circlesolid
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MANUFACTURING
July 2009 &LOGISTICSIT
57
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