Sales and operations planning (S&OP), sometimes known as aggregate planning, is a process where executive level management regularly meets and reviews projections for demand, supply, and the resulting financial impact. S&OP is a decision-making process that makes certain that tactical plans in every business area are in line with the overall view of the company’s business plan. The overall result of the S&OP process is that a single operating plan is created that identifies the allocation of company resources, including time, money and employees. Not having a well-defined S&OP process and technology in place, leads to a tug of war between Sales and Operations teams . So, what happens when a Fortune 50 Company lacks a formal S&OP process in their Supply Chain Organization?
Our client had the following issues that needed to be resolved quickly:
- Lack of communication between marketing, finance, sales, demand, and supply planning functions.
- Multiple S&OP plans in use leading to lack of a standard against which to measure performance.
- Poor planning for new products and product promotions.
- No consistent, repeatable process to develop the weekly demand plan.
- Lack of understanding of ripple effects throughout the supply chain caused by rogue or poorly executed actions.
MCG worked in partnership with the Client to deliver the following:
- Leveraging a well-known S&OP software solution, MCG developed a monthly S&OP process in which all business functions met to bridge the gap in high-level projections.
- MCG developed a weekly demand planning process using Demand and Fulfillment component of the S&OP software solution.
- MCG created a “Balanced Scorecard” using S&OP software solution to monitor overall performance of the Supply Chain.
- MCG Lead 100+ hours of S&OP software solution and supply chain theory training.
This allowed the Client to dramatically improve the overall performance of their supply chain organization. Some of the improvements the Client received included:
- Reduction in working capital, more accurate forecasting, and fewer stock outages due to more efficient and coordinated planning
- Demand forecasting using exception management within a customized software solution reduced planning time by 50%.
- Planners could focus more effort on value-add information gathering to improve forecast.
- Transitioned from supply and demand planning within an Excel spreadsheet to a consistent, repeatable process within S&OP software solution.
- Trained employees on S&OP software solution and general supply chain knowledge.
- Provided significant cost savings to the Supply Chain Organization
- Created a platform for collecting, analyzing and acting on relevant supply chain data to improve business function
Let MCG help you identify where there are opportunities, prioritize which ones to address and realize tangible benefits quickly. Engage with us!
Contact Moss Davis, Managing Director of MCG.