Sales & Operations Planning Special Report
Singing from the
same hymn sheet
Sales & Operations Planning is a proven means of facilitating better, more
cohesive communication between various departments within an organisation.
Manufacturing & Logistics IT spoke with key spokespeople from the S&OP
software solutions space to consider the concept’s origins and to get up to
speed with a few areas of ongoing development and innovation.
ncreasingly, S&OP is the engine that separate silos; such as sales, marketing, metrics so that they are reinforcing each
I
moves global manufacturing businesses finance, manufacturing and logistics. other as opposed to being at odds with each
forward. In fact, every manufacturing “However, at some point the company as a other. In a very simplistic sense, S&OP tries
business must make regular cross- whole needs to consider certain goals and to accomplish internal collaboration.” Gaurav
functional tradeoffs as a matter of objectives within the context of an overall also observes that just about every large,
survival.” This is the view of Richard business plan. That business plan could be small, regional or global organisation has
“Nicholas, sales & consulting director UK for the next year, or some companies may some kind of S&OP process. “They may
and BNL at TXT e-solutions. And it would have a more strategic longer-term plan or not call it S&OP but the heads of finance,
indeed seem to be the case that S&OP is think in terms of a three- to five-year time manufacturing and sales & marketing
a process that, when done effectively, horizon. They also have quarterly, monthly usually communicate with each other in
delivers more business value faster than and weekly tasks and targets. So, the some way. What S&OP tries to do is provide
many of the ad hoc alternatives. S&OP process evolved in an effort to a more formalised structure so the
provide some overarching methodology to department heads can communicate in a
So what is the core reasoning behind an allow an organisation’s separate functional more beneficial, cohesive way.”
organisation’s need for such a methodology? silos to come to the table together.”
Razat Gaurav, senior vice president at John Ewing, sales & marketing director at
i2 Technologies, makes the point that Gaurav added that, ultimately, various Demand Solutions, adds that, since its
organisations are likely to comprise various metrics and central structures that exist inception in the 1980s, S&OP has been a
within these silos tend sometimes to work at vital process for managing profitability and
odds with each other; and ultimately to the risk. “All too often we would see decisions
detriment of the overall company. “S&OP made without thought of what consequences
tries to bring these various silos together and that decision would have on other parts of
align them to a single version of the truth, the business; for instance, inappropriate
and at some point create one effective sales stock policies or shortfalls rolled into next
and operational plan for the organisation,” month’s forecast,” he pointed out. “These
he said. “S&OP also attempts to align the were everyday occurrences, but no thought
was ever given to the effect this would have
or how it was to be achieved.”
Razat Gaurav: “The S&OP process
evolved in an effort to provide some
overarching methodology to allow an
Ewing points out that 30 years ago this
organisation’s separate functional silos
connection was realised for those that sought
to come to the table together.”
to balance aggregate supply and aggregate
demand; thus making a vital connection >>
6
MANUFACTURING
&LOGISTICSIT October 2009
www.logisticsit.com
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