16 S&OP @ 100,000 Feet Executive S&OP A process to reconcile, agree upon, and communicate the company game plan Product Development (New Product Introduction) Finance (Dollars) Sales & Marketing (Units/$$ by product family) Operations (Units/Hours/Materials) 17Sales and Operations Planning is typically realized following a fivestep process that has a monthly or weekly frequency and is applied to product families Each of the five steps forming the S&OP process involves people belonging to different areas and the time horizon covered by their activities goes from 12 up to 18 or even 24 monthsFiveStep Process (Agenda & Critical Characteristics) Data Gathering & Statistical Analysis;
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5 steps s&op process- Sales and operations planning (S&OP) is a business management process It involves all the functions of the business working together to manage the future supply chain as efficiently as possible It is intended to maximise revenue by planning ahead to ensure that customers orders are met as efficiently as possible S&OP is a monthly management process It provides a link between strategy and execution that engages senior management in a tangible way to make decisions in order to balance company goals and direction with sales and operational capability Getting to a to a level of maturity where this can happen is a tall order
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The S&OP process can be broken down into six essential steps data gathering and forecasting, demand planning, production planning, preSOP meeting, executive S&OP meeting, and the S&OP strategy implementation Sales and operations planning is a monthly business process enabling a company to determine the organizational goals It allows the organization to meet its operational, sales, and financial targets The process is typically the responsibility of a specific sales and operations planning team This includes the company's decision makers andO CPFR process is cyclic, S&OP steps are not redundant o CPFR involves the associated businesses and trading partners, S&OP involves only the various constituents from within the organization o CPFR is likely to manage the inventory more efficiently
S&OP Implementation process the 10 steps Case Study from FMCG industry New Zealand Also included with this document is a bonus zip of 41 Lean documents (includes templates, case studies, articles, posters, charts, and more)"There's no clearcut boundary, but I'd say that Phase 1 marks the start of S&OP and that your S&OP process reaches maturity in Phase 2Implementing a Sales and Operations Planning (S&OP) Process Step 1 Gather and Manage Data This step entails the collection of data on past sales, trend analysis, and assessments Step 2 Develop Demand Plan Demand planning includes validating forecasts, understanding sources
Highlevel results with respect to S&OP • How we measured S&OP implementation • Fully implemented S&OP process • Decision makers participate in S&OP meetings • Organization follows S&OP process/plan • Further case analyses and interviews • Results in a nutshell • Many companies are trying (have tried), but only few succeed(ed)The objectives and the process are the same Use of the term S&OP is not meant to imply, in any way, any diminished importance of inventory planning Table of Contents S&OP Process Challenges3 5 Steps to S&OP Success5 Step 1 Innovation and Strategy Review 5 The S&OP process The process consists of focused review meetings for each discipline and an Executive meeting for decisions The diagram shows a standard model, but the actual number of review meetings are decided within each organisation For example Finance input is part of the preexecutive meeting
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Monitoring the S&OP comes down to monitoring the assumptions Download Whitepaper 8 essentials of an S&OP Software Key Steps for Monitoring S&OP Performance The first step is to identify the key assumptions If the S&OP process includes promotions as in the CPG industry, promotion success may be criticalConsensus / Integration Review; Gartner says that one common issue to address right away is to identify the S&OE content in the S&OP process and move it to the S&OE agenda These need to be two separate processes, both clearly defined with purpose and scope The S&OP process focuses on the tactical horizon, typically from 3 to 18 or 24 months When developing the process timing, the key point
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In this S&OP course International conference speaker and trainer Dr Muddassir Ahmed describes how S&OP Process can be used as the platform to drive continuoGartner, for instance, has reported that about 70 percent of global organizations are only in Stage 1 or Stage 2 of the four stage S&OP Maturity Model Most organizations acknowledge the need for a stepchange improvement to their S&OP process At the start of our journey, the S&OP process took six weeks to prepareDefinition is the first crucial step in any S&OP initiative With that in mind, consider the definition of S&OP in the APICS Dictionary, 13th Edition A process to develop tactical plans that provide management the ability to strategically direct its businesses to achieve
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S&OP Integration with other Plans Source Adapted from "Operations ManagementProcesses and Value Chains", Krajewiski et al, 08, PHIL P Ltd, Milliken (07) and Lapide (04) identify S&OP asAll sources agree that one of the first steps to prepare for a successful journey up the S&OP maturity curve is mastery of demand This means really mastering the process and technology of forecasting demand, shaping demand and integrating the demand stream into the global planning processSales and operations planning (S&OP) is an integrated business management process through which the executive/leadership team continually achieves focus, alignment and synchronization among all functions of the organizationThe S&OP process includes an updated forecast that leads to a sales plan, production plan, inventory plan, customer lead time (backlog) plan, new product
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The first step is to improve the existing S&OP process to bestinclass Whether starting from scratch or making a few minor tweaks, the establishment of a strong S&OP process is the foundation for SI&OP The aspects of a bestinclass S&OP are also characteristics that make up a successful SI&OPThe 6 Steps of the S&OP Processes Product Review In this first phase of the S&OP process, planners involved in R&D, product development, and new product introduction analyze the health of products in the market, examine product pipelines, and arrive at decisions about product planning These decisions might include setting dates for new The following steps will help your S&OP team successfully move toward this new model 1 Establish an S&OE process that supports the S&OP cycle This usually doesn't require starting from scratch Examine your current S&OP cycle and identify all the activities that should fall under the S&OE umbrella
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Define and orchestrate the S&OP process(s) Enable People to stay on top of relevant, contextual updates;S&OP, or sales and operations planning, is an integrated business management process that drives organizational consensus to balance supply and demand The S&OP process, which typically happens monthly, aligns operational areas – such as sales, marketing, product development, manufacturing, procurement, finance, and accounting – so they work in concert to meet financial A company might follow one of a few slight variations of the stepbystep S&OP process The accompanying graphic shows a monthly fivestep process data gathering, demand plan, supply plan, preS&OP, and finally the executive S&OP meeting, where decisions are made
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Data integration is a oneway highway The S&OP process should be separated from operational planning without losing the link, though The S&OP planning process should always be built on a realistic foundation, as the base line determines the trustworthiness of the S&OP plan You determine the pace and sequence of the steps in line with your own priorities So in fact, you can take a completely modular approach to implementing S&OP" Where does S&OP end and IBP start?Sales & Operations Planning Visibility Advanced Analytics Evaluation of multiple levers to shape profitable demand
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A Standard Operating Procedure (SOP) is a document that provides stepbystep instructions on how to complete a specific task properly An SOP may have several distinct parts to help organize and outline all parts of the process These parts may include a title, purpose (what), scope (who), responsibility (why), materials, and procedure (how)Content Covered in Session 3 Time 3513 S&OP as a major effort in orchestrating crossfunctional team's interactionsS&OP facilitator helps discover why opinions differ while keeping the S&OP process on track S&OP Silos Potential silo conflicts outside of the S&OP process that hinder S&OP performance conflicts of interest, such as one department lowering its costs by offloading expenses onto another department failure to share information, or
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To work properly, a process must be periodic Each months, several meetings needs to happen in order to reach at the end on the month an S&OP plan for the considered period This plan needs to be updated progressively depending on the meetings and the process We suggest to follow a 5 steps process for a full and efficient Sales & OperationSteps to S&OP There are two distinct phases to S&OP 1) process design, and 2) process conduct In the design phase, all of the technical workings are engineered, and in the conduct phase S&OP is used as a business management process The following 10 steps describe how to go about these two phases Steps 15 are design and steps 610 are conduct 1 S&OP Process Mapping Select the process Get the right people together Establish process boundaries List steps, activities and decisions Map the "asis" process Simplify the process Collect Data Is the process stable?
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These include Timely and accurate communications across regions and functions To make certain this happens, adopt easytouse tools Align goals and objectives across regions and functions to ensure participants are not punished for shifting their focus Design and implement global IT support Contextually organize People, Documents, S&OP Process Steps, S&OP Data, Action items, Decisions, Alerts, etc around the S&OP Process;Regional & Global Executive reviews Review;
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General S&OP Steps While the sales and operations planning process can differ greatly among organizations, there tend to be certain major steps that virtually all planners follow The ones below were developed by Thomas Wallace and Robert Stahl, coauthors of the definitive guide, Sales & Operations PlanningIdentify the key wants/needs of your major players (Finance, Sales, Operations) and begin modeling a straw man process You may need to "dial it in" to continually improve the process Data collection steps We recommend using a highlevel SI&OP process that operates on a With a more mature S&OP process, it is about managing tradeoffs like these and other functions through structured process steps These usually include Product Review To discuss current and future product portfolio, New Product Launch/End of Life strategy and portfolio optimization as well as SKU complexity and component rationalization
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Step 1 Map to Profit Center Leadership Drive Alignment to Business Goals The starting place is to build an organizational map by profit center For the greatest success, the S&OP process should report to a profit center manager The number of S&OP processes align to the profit center mapping
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