Without good supply chain planning it’s hard to understand how any commercial enterprise can operate profitably – particularly so at present, with tight economic conditions placing a heavy emphasis on rigorous cost control. And yet, the vast majority of organisations use simple spreadsheets to grapple with the complexities of their Sales and Operations Planning (S&OP) processes.
With the emergence of globalisation and outsourced manufacturing to distant locations, complexity has clouded the issue and now planning needs to be far more frequent, detailed and sophisticated. Monthly plans are increasingly outdated and inappropriate for organisations that operate on a global basis, dealing with multiple manufacturing locations, greater product variance, and an extended network of supply.
A single, rigid plan across an array of product types will no longer do. Flexibility within the process and a capability to deliver an action appropriate to the product and source is now considered essential by leading practitioners.
However, according to AMR Research, while 86 per cent of companies have an S&OP process, only 13 per cent of companies maximise the full potential of the process.
It’s about time a broader group of managers opened their eyes to the importance of this aspect of supply chain management and engaged in discussing the issues surrounding S&OP. Rarely has it been more critical to the success of the enterprise.
There are a great number of questions that need to be considered. What level of granularity should you be planning at? Should it be the SKU level? Or is there a danger of getting too bogged down with data?
Any S&OP process has to take into account suppliers and customers, along with other outside factors. How do you deal with factors over which you have little or no control? Clean, current and accurate data is critical – how do you ensure that you achieve this? What are the greatest challenges in transforming an S&OP process? And at the end of the day, can inventory ever be truly optimised?
Those interested in finding out more about the issues surrounding Sales and Operations Planning should join me in a Live Web TV debate on the subject, organised by Supply Chain Standard in association with Oracle, at 3pm on Thursday 9th July.
On the panel will be Andrew Spence, business development director for supply chain management at Oracle, Dr Janet Godsell of Cranfield and Dave Anning, director of global supply chain at Smiths Medical. But one of the most exciting aspects of the Web TV debate format is that it allows viewers to participate ask questions of the speakers. Click here to find out more and to register to participate.