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Vol 31 - No 01 - February 2005 National events: Sales & Operations Planning - The Key to Superior Business Performance Sales & Operations Planning (S&OP) is clearly ‘flavour of the day’. On the 16th November the IOM ran a very successful event on S&OP at the Hilton Hotel in Warwick, co-sponsored by the IEE and attended by over 80 delegates. The clear and consistent message from all speakers was that S&OP is a vital business process that is used by many companies and is clearly defined in the literature and in practice. S&OP has been around for many years. Many companies practice it religiously and run a tight, well-managed business. Many pay lip service to S&OP, but do not manage it properly. Others do not use it and do not understand it. Understanding and managing customer demand and adjusting supply capability accordingly is a core skill for any business and S&OP is concerned with balancing of demand with supply and the development of one single, companywide plan. The idea is over 25 years old but suddenly it has had a major resurgence. All speakers agreed that, in essence, the idea of S&OP is simple: Joe Booth of Access2Growth, gave an excellent overview of the definition of S&OP and the issues and business needs for an effective S&OP process, in particular stressing the specific needs for effective S&OP in our current (21st century) business environment. Joe’s views were confirmed in detail by three workshops given by Robin Goodfellow where the audience was taken through the whole S&OP process, showing the data requirements, the document formats and the process operation in detail. The workshop sessions, based on Robin’s extensive education and training experience, ensured that the audience fully understood the industrial case studies provided by the other speakers. The first case study was by Mike Sykes of Generics (UK) Limited. Generic pharmaceutical manufacturing is a very cost conscious business where low cost, agile manufacturing, coupled with excellent new product introduction programmes, is the key to commercial success. It was clear from Mike’s presentation that without good S&OP those objectives cannot be easily achieved, but that to implement an effective S&OP process requires the engagement of the whole business. Tim Eagles, Supply Chain Director of Best Factory Award winners Stannah Stairlifts, described how demand forecasting and S&OP has helped them to cut customer lead times dramatically without cost penalty. He also demonstrated some useful tools for integrating suppliers into the planning processes and gave a very down-to-earth description of how to run an excellent customerfacing business. An interesting case study came from Paul Hendry of Timpken Bearings who demonstrated how global S&OP can be used effectively to tie together a multi-plant, multiregion business. At the same time, he described how difficult it is to manage the inputs and collaboration across different countries and continents to develop and manage one corporate plan. Guy Dunkerley from IMI Norgren took the audience through the IMI SIOP process, making the very valid point that the ‘I’ in SIOP stands for ‘Inventory’, a key planning parameter in any S&OP process. In another paper from the pharmaceutical industry, Matt Gill of Abbott Laboratories demonstrated an effective S&OP process in considerable detail confirming how the theory is applied, pretty well to the letter, by a large company. In the past S&OP has been seen as a high level, monthly strategic activity. With the increasing availability of modern supply chain optimisation and collaboration tools S&OP has become much more dynamic and provides both, strategic direction and tactical operations support, to enable companies to respond swiftly with a high degree of agility and flexibility. Alan Purvis from BOC Edwards showed how they have integrated processes with appropriate IT to implement a highly successful S&OP solution in an extremely volatile business. The event chairman Alastair Ross of Supply Chain Analytics Limited, summarised the various messages and stressed that effective S&OP is a combination of effective processes, people and IT. All three elements have to be right for the process to work. The seminar provided clear and practical guidance on the core capabilities that constitute S&OP and audience ratings for the event and the individual speakers were very high. Hopefully the current interest in S&OP as a core business process, the IOM will run more events of this type to help companies to understand the mechanics, issues and benefits of the S&OP process. Dr Günther Kruse, FIOM Related Topics:
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