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DynaSys Sales & Operations Planning Software solutions are integrated, flexible and customizable, designed to facilitate communication and decision-making to balance supply and demand. Faced with an unstable economic environment in which change is the only certainty, companies need to organize and implement an efficient and accurate planning process. Review the plan to ensure that it is acheivable and meets the company’s targets for revenue and profitability. The United States relied on net imports (imports minus exports) for about 45% of the petroleum (crude oil and petroleum products) that we consumed in 2011.
Incorporating sustainability initiatives into warehouse and distribution center (DC) design is proving to be a win-win proposition. Comprehensive connectivity – from 802.11 wireless LAN technologies, cellular networks, Bluetooth. A mature S&OP process aligns the supply chain with corporate strategy to become the glue that binds performance end-to-end across the supply chain. Wholesale Distributors are faced with growing costs, shrinking margins, new competitors and demanding customers. Predictable financials are as much, if not more, important today as they were 25 years ago. Today’s sales and operations planning (S&OP) process encompasses people, process and technology to create a business plan that will deliver the predictable financials executives seek.
Ultimately the S&OP plan provides management a view at any point in time of how the company’s operations are performing vis-a-vis the financial plan. A mature S&OP process aligns the supply chain with corporate strategy to become the glue that binds performance end-to-end across the supply chain. Technology enablers: Logility’s supply chain optimization solutions provide customizable views to review plans for new product introductions (validate sales projections, expected launch dates, consumption forecasts, pipeline fill), and for products that are phasing out (manage the depletion of inventory, transition to new products). Many years ago APICS professionals defined S&OP in an attempt to create a standard, process-based solution to business planning within the supply chain. The same thing is happening today except there are many more dimensions to the balance than just supply and demand. Today the ‘demand’ side of the equation is no longer a homogenous single sales organization or channel. The supply chain today extends out beyond the corporate walls into collaboration with different partners, suppliers and customers. An important consideration for any company is managing product lifecycles.What products should we introduce to the market place?When should we introduce them?What products should we sunset or discontinue? These are all critical questions to answer and the impact on sales, production, inventory, and finance must be understood.
Companies that have been successful in managing NPIs utilize advanced techniques such as attribute-based forecasting which generates demand profiles for new products based on existing product demand tied to identifiable attributes such as style, color, season, material type, etc. Modern supply chains balance these complexities of supply and demand across multiple horizons at multiple levels of aggregation.
Intelligrated displayed, and continues to innovate with its full range of automation solutions. Each department takes decisions in isolation and usually not based on facts, but instead designed to satisfy their own priorities. Sales and operations are not aligned, with trading making promises and creating plans that manufacturing and procurement cannot fulfill -resulting in poor customer service and fostering a blame culture. There is a large inventory of product that is not selling and on-going availability problems on popular items, which means too much money is spent on expediting, compensating customers and utilizing resources poorly.
All of these issues conspire to have a profoundly negative impact on the bottom line through unnecessarily high waste, inefficiency and an internal blame culture. S&OP has been defined as being “the only enterprise process to balance the supply and demand side equation.
So, what is needed to make S&OP happen and thrive within an organization allowing it to realize the benefits of lower total inventories, better customer service, higher revenues and sustainable bottom-line improvement? To achieve the cultural change needed.

Supply planning then needs to follow, taking the demand forecast and generating plans to deliver – be they procurement plans, manufacturing plans or both.
Building a monthly ‘pulse’ into the business to ensure the sequencing of demand planning feeding supply planning, with everyone using a single version of the truth in terms of numbers to drive healthy debate and shared decision-making for the well-being of the whole company is key. Good supply chain planning is a good place to start and for many companies is as far as they are happy to go.
Slideshare uses cookies to improve functionality and performance, and to provide you with relevant advertising. The benefits of effective S&OP are compelling - lower operating costs, reduced inventory requirements, and top-line growth, and top-performing S&OP companies are realizing these benefits and in the process gaining competitive advantage.
These companies develop highly mature S&OP processes that leverage key best practices and as a result, realize significant performance improvements and create an opportunity for competitive advantage. Our study has identified a dozen key best practices that differentiate S&OP processes of top performers from those of other organizations. Top performers also gear their S&OP processes to look out over a horizon of at least 18 months, producing an integrated business plan that balances supply and demand to meet targeted business objectives over that timeframe. Another trait of the top performers is to aggressively adopt organizational best practices (see Exhibit 4), surpassing adoption rates by other survey respondents by 44 percent. Almost all top performer organizations report participation by sales, marketing, demand planning, supply planning, finance and procurement functions in their S&OP process. Top performers also set formal performance targets and assign accountability for achieving those targets. This requires insight to the company’s strategic objectives and operations to achieve the optimal levels and product mix. Gather input from as many sources as you can, and collaborate on the numbers until everybody agrees. Look at the possible results of unplanned supply chain interruptions for key raw materials or components, and make plans for how to deal with these events if they arise. In this way it provides management guidance in the context of the end-to-end supply chain and prevents local optimization that can de-optimize the overall corporate plan. Once a repeatable process is in place and producing a well-balanced plan the company is able to turn its focus towards seeking new opportunities and removing barriers.
Employ advanced techniques such as attribute-based planning, which allows a company to accurately forecast new products even when no direct prior sales history exists. Leverage Logility’s cluster and Lifecycle Planning functionality to develop forecast profiles based on aggregate new product launch history. For example, we often hear S&OP referred to as a balancing act between supply and demand. The modern S&OP challenge is how to balance, negotiate and manage across the multiple dimensions of the supply chain.
It is a multi-channel, multi-layered amalgam of demand signals that has to be synthesized into operations. This is more than simply passing data back and forth, this is truly collaborating in an effort to control, move and orchestrate the extended supply chain ecosystem.
NPIs can significantly impact the well being of a company including inventory and lost sales. A well-designed attribute-based forecasting system will continually monitor demand signals, quickly recognize any deviation from the forecast, and adjust the assumptions and forecast to match the actual demand signals. They manage tradeoffs internally between procurement, manufacturing, brand management, engineering, finance, and IT. This means that even if you determine the tradeoffs today, it will all change tomorrow - the pace of change has quickened considerably. If we as supply chain professionals plan appropriately, the plans we create should become the plans we execute and when we roll them up at the end of the period they should add up. In fact, a formal, well executed S&OP process was identified as one of the top practices of performance leaders” (AMR Research).

An honest and frank assessment of current ways of working and the resultant issues identifies the gaps and shapes the sequence of change required. Planning to the forecast may seem an obvious statement, but all too often it does not happen because of interference at a departmental or local level and a lack of sharing information about such changes. An honest forecast from demand planning for supply planning to react to in a coordinated and shared way is often a huge step forward.
Our study findings indicate that top performer companies’ mature S&OP processes are 68 percent more effective at delivering benefits than are those of other organizations.
Top performers also report developing a single consensus demand plan that is used as an input to S&OP. Organizations that are not top performers lag in each one of these best practice capability areas. In our experience, organizational effectiveness is a key ingredient to S&OP success, enabling ongoing governance and continuous improvement of the process.
The targets are typically specific quantifiable goals with defined timeframes in areas such as working capital improvement, cost reduction, customer or product growth, forecast accuracy improvement, supply gap reduction, and process participation.
The supply side is now a multilayered, global supply chain with third party suppliers, manufactures and providers.
The ability to predict sales on NPIs, where there is no sales history to model, can be difficult.
What used to be a monthly cycle is now turning weekly, daily and in some cases instantly as transactions are harvested to provide guidance to the operational plan. This is relatively simple for assembly type industries where ERP systems (or even effective manual Lean systems) can do this well.
At its heart is a one-number culture, one plan that requires a maturity and honesty from a business that cannot be achieved ‘out of a box’. For many businesses, a full S&OP implementation where demand and supply areas constructively challenge each other and the process is fully integrated into financial and strategic planning, is not realized and is not needed. It will be the consolidation of some form of statistical analysis of history with an overlay of market intelligence. While adoption rates of the practices across these groups differ, the study indicates that top performers consistently adopt best practices at a higher rate than do other organizations.
How do we get the supply side and the demand side of our business to agree on one plan, one set of numbers and one set of actions?
Traditional time-series forecasting tools that utilize history will not work effectively for NPIs. This is not the case in process industries, unfortunately, so more robust, flexible tools are required.
A common error is to drag forecasts up to equal budgets so as not to show any planned deficit – This is the wrong approach, as a budget is a snapshot in time when created, whereas a forecast is ‘live’ and evolves as the business and market change. In the old days we just wanted ‘sales’ and ‘operations’ to talk to each other and stop competing. The goal is the same, but the complexity increases exponentially…for example, think about the dynamics of predicting supply and demand in dairy. Tracking forecast versus budget is useful, whereas the alternative can be a ’fool’s paradise’. Milk supply is variable and finite, but demand can be wildly unpredictable and highly dependent on weather, product mix, shelf life, cleaning requirements, and store sales.

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