S&
OP
Sales & Operations
Planning
Presented
by
Dr. Shehzad Khan
[Link]
[Link] Ali
[Link] Zafar
S&
OP
Introduction
Why S&OP
Objectives
Data Flow
Supply Planning Process
Reconciliation
S&OP Input
S&OP Output
Modus Operandi
S&
OP
Statement of
intent
Sales and Operation Planning
The process by which an organization will lead and
run the business through monthly structured reviews
at all locations focusing on strategy, performance
and gap analysis with management attention on 4 24 month horizon.
A Collaborative and cross-functional process
that align an organization around a single
sales, inventory and production plan
S&
OP
S&
OP
S&
OP
S&
OP
Customers are demanding:
Increasing business risks of :
Accurate and timely commitments
Shorter lead times
Flexibility
Product differentiation
Dedicated inventory
Visibility into the supply chain
High quality
Automation
Lowest costs
Too much inventory
Inventory in the wrong place
Ordering the wrong inventory
Missing delivery dates
Losing orders
Shipping the wrong products
Increased expediting costs
Losing customers
Increased obsolescence
Forcing businesses to better manage:
Inventories
Ability to promise
Global suppliers
Supply/Demand
Forecasts
Cycle time
Stocking policies
VMI/SMI processes
Replenishment
S&
OP
S&OP Integrated strategy with
operation
STRATEGIC
PLANS
FINANCIAL
PLANS
BUSINESS
PLANING
Sales and Operations
Planning
DEMAND
MANAGEMENT
NEW PRODUCT /
ACTIVITIES
MANAGEMENT
DEMAND
CREATION
CREATIVITY /
TECHNOLOGY
SOURCING
MANAGEMENT
DEMAND
PLANING
OPPORTUNITY
ANALYSIS &
SELECTION
SUPPLY
POINT
STRATEGIC
STRATEGIC
MANAGEMENT
PLANS
PLANS
SALES
STRATEGIC
STRATEGIC
PLANING
PLANS
PLANS
STRATEGIC
STRATEGIC
RESOURCE
PLANS
PLANS
MANAGEMENBT
SUPPLY
STRATEGIC
STRATEGIC
EXECUTION
PLANS
PLANS
DEMAND
STRATEGIC
STRATEGIC
EXECUTION
PLANS
PLANS
STRATEGIC
STRATEGIC
EXECUTION
PLANS
PLANS
SUPPLY
MANAGEMENT
STRATEGIC
CAPABILITY
DISTRIBUTION
LOGISTICS
STRATEGY
PROJECT &
S&
OP
S&OP Integrated across the business at all
levels
STRATEGIC
PLANS
FINANCIAL
PLANS
BUSINESS
PLANING
Sales and Operations
Planning
DEMAND
MANAGEMENT
NEW PRODUCT /
ACTIVITIES
MANAGEMENT
DEMAND
CREATION
CREATIVITY /
TECHNOLOGY
SOURCING
MANAGEMENT
DEMAND
PLANING
OPPORTUNITY
ANALYSIS &
SELECTION
SUPPLY
POINT
STRATEGIC
STRATEGIC
MANAGEMENT
PLANS
PLANS
SALES
STRATEGIC
STRATEGIC
PLANING
PLANS
PLANS
STRATEGIC
STRATEGIC
RESOURCE
PLANS
PLANS
MANAGEMENBT
SUPPLY
STRATEGIC
STRATEGIC
EXECUTION
PLANS
PLANS
DEMAND
STRATEGIC
STRATEGIC
EXECUTION
PLANS
PLANS
STRATEGIC
STRATEGIC
EXECUTION
PLANS
PLANS
SUPPLY
MANAGEMENT
STRATEGIC
CAPABILITY
DISTRIBUTION
LOGISTICS
STRATEGY
PROJECT &
S&
OP
Objectives of
S&OP
Consensus on Managing Gaps.
Greater accountability of individual plans.
Determination of resource capacity needed.
Achieve the business plan, and guide strategic thinking.
Ensure that operating and financial plans are integrated,
realistic and synchronized.
Create ONE company game plan / single set of numbers.
S&
OP
Integrated Data
Process is designed to facilitate two way
Flow
communication throught the supply chain
NPI Report
Allocation Decisions
Business Decisions
Policies & Guide lines
Approved Supply Plan
Commentary
Approved Demand
Statement
Safety stock
recommendation
Commentary
In f
o rm
at i
on
Manufacturin
g
Planning
Marketing
Affiliates
ack
db
Fee
Capacity Constraints
Master Replenishment
Schedule
Inventory Management
Commentary
Divisi
on
Approved Supply plan
Master Arrivals
Schedule
Approved Safety stock
S&
OP
Supply Planning
Process
FINAL
S&OP
MEETING
LATEST VIEW &
RECOMMENDATI
ON
Gap
Analysis
Strateg
y
SUPPLY
REVIEW
Assessment
Accountabil
ity
Issues
Vulnerabilit
y
Demonstra
ted
Performan
ce
Supply
Manager
Alternate
Plans
Impro
veme
nt
Supply
Assumpti
on
STRATEGY
BUSINESS
PLAN
PERFORMANC
E
Integration & Financial
Reconciliation
DEMAND
REVIEW
NEW
PRODUCT
INTRODUCTI
ON REVIEW
FINAL
S&OP
MEETING
S&
Supply Review
OP
LATEST VIEW &
RECOMMENDATI
ON
SUPPLY
REVIEW
STRATEGY
BUSINESS
PLAN
PERFORMANC
E
Integration & Financial
Reconciliation
DEMAND
REVIEW
SUPPLY MANANGEMENT
Strateg
y
Demonstrated
Performance
Internal & External
Supply Chain
Seasonality Pattern
Improvement Plans
Flex Potential
Hedging Strategy
New Product Phase
In/Out & Change Activity
Un-Constrained
Forecast
Assumption Vulnerability
& Opportunity
(Upside/Downside)
1. Communicate &
Coordinate
2. Review issue &
options
Material
Capacity
Hedging
What if
Assumptions
[Link]
[Link] and Impact
[Link] alternatives
with Implications
ACOUNTABLE SUPPLY PLAN
Alternate Supply
Chain
Issues Arising
& Resolve
Proposed Plan
NEW
PRODUCT
INTRODUCTI
ON REVIEW
S&
OP
SUPPLY
REVIEW
FINAL
S&OP
MEETING
LATEST VIEW &
RECOMMENDATI
ON
STRATEGY
BUSINESS
PLAN
PERFORMANC
E
Integration & Financial
Reconciliation
DEMAND
REVIEW
Integration & Financial
Reconciliation
NEW
PRODUCT
INTRODUCTI
ON REVIEW
INTEGRATION & FINANCIAL RECONCILLATION
Product
Managemen
t Issues
Arising
Demand
Issues Arising
Supply Issues
Arising
Country Wide
Project Issues
Arising
Financial
Evaluation of
New Plan
Financial
Implication
of Changes
Alternate
Proposals
with
Financial
Implication
1. Consolidate issue rising
2. Discussion
One on One
Small Group
As appropiate
[Link] change
/Impact
Operational
Functional
[Link] what if scenario
and sensitiveness
[Link] fianancial review
[Link] plan
/Recommendation
Agenda for
Management
Review
Latest view
Vulnerability
Opportunity
Out Come of
What if
Scenario
Gap
Identified Vs:
Annual Plan
Strategy
Performance
Decision
Required
S&
OP
S&
OP
S&
OP
S&
OP
Focus on what is
changing
Monthly regeneration of plan over the rolling horizon allows
A greater understanding beyond the number assumption & sensitivities
Operational and financial implications
What- if analysis
Managing change and required decisions
Information for decision making not spreadsheet data dump !!
S&
Role Of S&OP Task Team
OP
To put in place a sustainable S&OP process to run the
company, and to meet the requirement of the integrated
S&OP Process
This will involve
Changing the way of working of the senior tea
Understanding the requirements of the S&OP process
Implementing new tools
Create discipline planning culture, based on maintaining a
realistic one sett of numbers over 24month horizon
S&
OP
Its all about collaboration
