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Vol 30 - No 03 - May 2004 National events: Report on Sales and Operations Planning (S&OP) Seminar On the 25th March 2004 an audience of over 35 attendees joined the IOM at the Hilton Hotel, Warwick for a seminar on Sales & Operations Planning, given by US industry guru, Jane Lee of Supply Chain Consultants Inc. of Wilmington Delaware, who used the subject of Sales & Operations Planning to deliver an excellent workshop under the sub-title of ‘A Practical Framework for Supply Chain Improvement and Integration’. Supply Chain Consultants Inc. is a leading US supply chain software and consulting firm and Jane Lee, an expert practitioner in the field, has given this workshop many times to great acclaim in the USA. We were lucky to be able to attract Jane to the UK to talk to us and help us to really understand S&OP for competitive advantage. Attendee comments after the event demonstrated how much the audience appreciated the opportunity to learn from a real expert. During her twenty year career with a major chemical company, Jane Lee developed from scratch and then ran for ten years a world-class Global Sales and Operations Planning process for a billion-dollar business. Improving the supply chain begins with a clear understanding of S&OP objectives and processes. Based on her experience, Jane illustrated that improving the supply chain begins with clear understanding of S&OP objectives and processes. An effective S&OP process has a number of clearly defined elements: Demand Planning, culminating in a Demand Planning meeting where a demand plan is agreed and published Supply Planning, followed by a Supply Planning meeting where the demand plan is matched against resource availability, supplier constraints and other supply limitations to determine an achievable supply plan. An S&OP Co-ordinator, who attends both of these planning sessions, matches the demand plan and supply plan against financial and business objectives as well as budgets and tries to resolve issues at this stage before developing the proposed sales & operations plan. A formalised S&OP meeting which must always be chaired by the senior relevant business executive (i.e. Chief Executive or Divisional Head) agrees the sales & operations plan. Jane Lee took the audience through the whole S&OP process, illustrating it with reports and many anecdotes from her vast industrial experience. Modern IT solutions have made the S&OP process much more responsive and manageable and that has led to a major resurgence of interest in S&OP. Jane demonstrated the power of enabling IT by showing how a modern supply chain optimisation software suite would be used to support a collaborative S&OP process. Jane used her own company’s Zemeter® software product for the planning demonstrations but, to be fair, pointed out that she used it for illustrative purposes only and that use of her software was not a pre-requisite for S&OP success. Delegates went away with a thorough understanding of the core elements of the S&OP process Jane’s workshop provided a clear and practical understanding of the core capabilities that constitute S&OP and addressed the relevant topics in a straight-forward, practical and business-relevant way. Delegates went away with a thorough understanding of the core elements of the S&OP process, ie.Demand Planning, Supply Planning and the S&OP meeting itself. The people side was discussed at length, in particular the need for total commitment by the senior executive and the senior management team. S&OP is a continuous process and, once a plan is agreed, continuous monitoring and, if required, replanning is essential. Jane stressed that S&OP is a continuous process and that, once a plan is agreed, continuous monitoring and, if required, replanning is essential. Most companies run the S&OP process on a monthly basis and few companies have the luxury these days to stick to one rigid monthly plan and still satisfy changing customer demands. After lunch Martin Berry, Supply & Process Development Manager of the Wedgwood gave an excellent talk demonstrating how his company had embraced the S&OP process and had totally changed its approach to supply chain planning and execution by installing a robust S&OP process, thereby demonstrating how a UK business was benefiting from Jane’s concepts in practice. The event was chaired by Dr.Günther Kruse, a Fellow of the Institute of Operations Management and Operations Director of Supply Chain Analytics Ltd, the European partners of Supply Chain Consultants Inc. In his introduction Günther explained that S&OP is generally accepted to be the backbone of the supply chain. He pointed out that S&OP is not new but that few companies do it well and therefore suffer higher than necessary costs, poor customer service, high inventories and general customer dissatisfaction. Effective S&OP requires the seamless integration of people, processes and IT systems. Günther closed by summing up the key message of the day.Effective S&OP requires the seamless integration of people, processes and IT systems. All three are essential to make it work and no processes and IT solutions can substitute for full people engagement, executive commitment and broad employee buy-in and understanding of the S&OP processes. This was a highly successful event of the Institute with a good attendance and excellent reviews. Clearly S&OP is a ‘hot topic’ and deserve a lot of future attention by the IOM. Related Topics:
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