Steelwedge Software

Steelwedge Software

Seven Steps to Improved Sales and Operations Planning (S&OP)

Posted: 13 Jul 2011 05:31 PM PDT

Sales and Operations Planning (S&OP) is a function that corporate executives often fail to recognize as a key contributor to success.   From a revenue perspective, an accurate S&OP plan allows for high levels of customer service.  When demand is predicted accurately, it can be shaped and met in a timely and efficient manner.  Of course, accurate forecasts help organizations avoid stock outs and lost sales.  The impact of an inaccurate S&OP plan on profit margins is also profound.  Raw materials and components are more cost-effectively acquired on the basis of advance planning instead of last minute, rush orders. The impact of excellence in S&OP is profound.  In a number of cases, clients working in tandem with the Steelwedge team to develop, improve or automate their S&OP processes have seen increases in product margins of upwards of five percent and reductions in inventory levels of over fifteen percent.   In spite of such tangible benefits, many companies fail to prioritize this critical executive process.  Although no management function can be reduced to seven items or even seventeen items, there are certain basic S&OP improvement lessons learned that can be generalized across clients and industries. Each of these steps is summarized below: Step Symptoms Actions Results #1: Understand the purpose of S&OP Blurring of the distinction between plans and forecasts Establish a structured S&OP process that incorporates discrete demand and supply planning steps The entire company agrees with the priority and goals for S&OP    #2: Forecast Sales, Plan Supply Shipment history as the primary basis for forecast Create a standard process forecasting and then constraining demand. Adopt scenario planning approach. …

Posted by computer at 9:01 AM  

0 comments:

Post a Comment