Sales & Operations Planning Special Report
<< manager of the business at a divisional
level or the president or CEO at the Pieter Van Nyen: “With the increased awareness of
corporate level to make sure the functional
the financial impact of operations on the bottom-line
result of the total company, financial departments
owners are aligned and working towards a
started being involved in the S&OP process.”
single operating plan. Secondly, Baumann
points out that S&OP has a process
framework and cadence with major and constant stream of new challenges means
milestones that must be completed before that human intervention is still required,” he
later steps can be properly executed. said. “Effective S&OP starts with the change
“We believe that a best-practice process management piece; without this no process,
framework has been established to assist no matter how good, will work as the people
with getting optimal results so that, after driving/using it have not been given the
people are aligned with their behaviors and tools to make it successful. Just because a
actions, they can work in a synchronised process is new does not mean it will deliver
fashion on a common process,” he said. continuous improvement.”
to execution; and providing executive
Finally, Baumann maintains proper tools are coaching on improving and evolving the Novels’ take is that software is absolutely
needed to provide decision support and a S&OP process as business conditions change.” essential if companies are serious about
common view of the data across the different S&OP. “S&OP has to take in all sorts of data
S&OP stakeholders. “Today’s S&OP approach Woodward maintains that effective S&OP – forecast data, sales data, capacity data
is designed to unite a company’s corporate requires all the elements of process – people etc. – from many different sources. And data
objectives, financial goals and operational and technology – to be in place. “Like a needs to be manipulated, collected together
plans in order to realise significant top- and three legged stool; if one of the legs is and presented in a particular way that is
bottom-line improvements. Making this missing it won’t stand up,” he said. Van Nyen useful for managers in order for them to
powerful transformation can be a significant agrees that both are critical success factors. make the best informed decisions. This
undertaking, which is the reason many “A good process description is indispensable is what software is good at; taking basic,
companies partner with experts to help in order to have an S&OP that comes up with raw data and putting it into a format that
with, for example: educating executive and answers to the right questions,” he remarked, management can act upon. If such data is
adding: “The involvement of the people is not presented in such a way it’s useless.”
necessary to get the right answers.”
However, Novels also recognises that, at an
From a more statistical perspective, Ewing execution level, it is important for individuals
points out some commentators maintain that from the various departments within an
successful S&OP is 90 per cent about process organisation to work together as a team. “It’s
and only 10 per cent tools. “However, I a problem if the sales team is simply throwing
believe it to be more like 70 per cent process orders over the fence telling production to
and 30 per cent tools,” he said. “It is widely get on with it while not having any visibility as
accepted that well-designed S&OP processes to what the current production capacity is on
achieve the greatest return when executed. the shop floor or what the current constraints
Similarly, choosing tools to assist should are,” he said. “The sales team may also be
also be considered carefully for their ability giving delivery dates to customers that are
to mirror your design. They sit side by unrealistic because of problems that are
Richard Nicholas: “S&OP is a journey and
side, providing you with the platform upon occurring on the manufacturing side. Basically,
companies without an S&OP process will which to make decisions and so should be there needs to be a wider knowledge
not go from nothing straight into
complementary to each other.” Ewing also based on availability of materials, resources,
Integrated Business Planning.”
believes a typical S&OP process calls for machinery and staff in order for more
regular meetings to discuss trends and future accurate lead times to be determined.”
demand, to identify any pinch points within
middle-management teams on best practices the business or resolve any imbalance, then
and leadership behaviors required for an as a group agree corrective actions. “Typically Different approaches
effective IBP/S&OP process; designing the the outcome of such meetings is compared
process, including defining roles, responsibilities with the financial plan, with any exceptions In terms of vertical sector and size of
and accountabilities, process flow and being tabled in the board room,” he said. organisation, where is the greatest uptake of
information needs; establishing the calendar S&OP adoption? Andrew Kinder reflects that
and cadence of the S&OP process; advising Nicholas believes effective S&OP is 60 per just about every sector within manufacturing
executives on creating a transparent and cent change management, 30 per cent understands the essential meaning of the
collaborative decision-making environment; process and 10 per cent technology. “Supply term, although their approach to S&OP can
providing support on the selection and chain is still one of the most people-based be quite different. “When we talk with CPG
implementation of tools to drive and processes and, whilst many aspects have companies, their starting point with S&OP
complement the S&OP process from strategy been automated over time, its evolving nature will often be as far back as a new product >>
10
MANUFACTURING
&LOGISTICSIT October 2009
www.logisticsit.com
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