Sales & Operations Planning - the next generation
Tom Wallace and Bob Stahl have written a very good paper on “Sales & Operations Planning The Next Generation.” Tom and Bob have been studying these issues for 30+ years and have written several books on the subject. In the paper, they describe the tangible business benefits of a Sales & Operations Planning (S&OP) process and the market drivers that are requiring changes in the way this critical business process (which they describe as “top management’s handle on the business”) operates.
In the paper, they say “S&OP as it is currently constituted lacks the following important capabilities:
> Rapid and comprehensive simulation
> Seamless linkage between aggregate plans and detailed plans
> Enhanced financial integration
> Support for Sarbanes-Oxley and other requirements for regulatory compliance
> Combining data from disparate sources for decision-making”
They also speak to the growing complexity of businesses (driven in large part by outsourcing) and the accelerating pace of change and the impact it has on the S&OP process.
With a large installed base of global electronics manufacturers, Kinaxis sees these trends every day in our customers. I’ve heard comments from customers saying “we build a good plan, and then the phone rings.” Many of our customers have already moved to a more regular S&OP process combined with the ability to respond immediately to regular changes that occur ever day. In essence, these companies are moving to a constant process of aligning supply and demand - driven by the pace of change in their businesses. And, by empowering a broad set of participants throughout the organization (internal and external), they leverage their collective insights and ensure continual alignment throughout their extended supply networks.
