Sales and Operations Planning (SOP) Overview, Process Steps, Practical Considerations and Benefits Presented by: Dr. Muddassir Ahmed SOP Webinar Training Session 1 Our Agenda for Today Introduction What we will learn today 2 Who we are
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Presentation Transcript
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Sales and Operations Planning (S&OP) Overview, Process Steps, Practical Considerations and Benefits Presented by: Dr. Muddassir Ahmed S&OP Webinar Training Session 1<br>
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Our Agenda for Today Introduction
What we will learn today 2 Who we are
Meet who are behind the curtain. S&OP Position in Supply Chain Planning & Overview Detail Introduction of 5 Steps of S&OP Process Practical Challenges in S&OP Deployment<br>
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Introduction<br>
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4 In this S&OP workshop, you’ll learn how to: S&OP Position in Supply Chain Planning & Overview
Detail Introduction of 5 Steps of S&OP Process
Practical Challenges in S&OP Deployment (sharing my 14 years of experience) & How to use S&OP Self-Assessment & Assessment Results from Participants<br>
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“ ” Productivity is never an accident. It is always the result of a commitment to excellence, intelligent planning, and focused efforts
Paul J. Meyer<br>
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S&OP Position in Supply Chain Planning
&
Overview<br>
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What is S&OP 7 S&OP is a process to help you delivery better customer service, lower inventory, shorter lead times, more stable production rates, better management control of the overall business, and a team building mechanism across the whole of the senior management organisation.
It is a cross-functional Planning process designed to keep demand and supply in balance. This is achieved by continually monitoring external market demand changes (through the Sales department) and communicating these changes to the internal organization. Personnel in the Supply Chain, Finance and Production departments utilize this information to optimize purchasing (Inventory) and production (Operations) planning decisions<br>
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What is S&OP 8 It is board level agenda item.
Integrated ‘business management process’ that aligns demand, supply and financial planning.
It drives gap-closing actions between what you target and what is business reality.
It intends to delivery management commitment in a transparent way.
It deploys the business strategy, and make it under stable to all layers of the organization.<br>
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S&OP – What It’s Not? 9 S&OP is NOT another set of meeting on top of already existing meeting.
S&OP is NOT a black box, automatically delivering improved results rapidly.
S&OP is NOT just another Supply Chain Process!
S&OP is NOT a planning system.<br>
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Why S&OP 10<br>
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Why S&OP 11<br>
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S&OP in 5 Levels of Supply Chain Planning 12<br>
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Need S&OP - Importance of Balancing Supply & Demand 13<br>
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S&OP Objectives & Outcomes 14<br>
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Benefits S&OP 15 Typically, organizations that have used S&OP have experienced improvements in Customer Service, Days-On-Hand (DOH) and Operating Costs. Improved customer service levels
the right product at the right place at the right time (and in the right quantity) Typical Achievements 15 - 30% 10 - 30% 5 - 20% Reduced operations costs due to:
manufacturing, transportation, temporary storage, product scrap/obsolescence, manpower Reduced inventory levels<br>
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16 Reduced Spare Parts Inventory 15-35%
Improvement Yields 5-20%
Reduced Obsolete and Stale Inventory 40-50%
Savings in Transportation Costs 7-12%
(load consolidation, better sequencing to outward demand/shipments)
Return On Investment 3-12 months
Increased Sales (Improved Customer Loyalty) 3-10%
Improvements in Manufacturing Efficiencies 10-20% Benefits S&OP<br>
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S&OP Process Overview – Quiz 1 17 S&OP – What Its Not?
What are the top 3 benefits of S&OP?
What are the key objectives of S&OP?
Why you need one set of numbers to run S&OP?<br>
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Introduction of 5 Steps of S&OP Process<br>
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S&OP Process Overview 19 Five Step Process:
Data Gathering & Statistical Analysis
Demand Planning
Supply Planning
Consensus / Integration
Regional & Global Executive reviews
Global Executive Review to engage the senior leadership in sync with the financial rolling forecast<br>
