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SupplyChainDigest had a recent article talking about the key trends in sales and operations planning (S&OP).  They highlighted numerous trends, including more focus on inventory management, demand management, collaboration and the like.  I posted a comment to their site and have included it below as well.

** My comment **

I agree with the observations you’ve made regarding trends around sales and operations planning (S&OP).  We’re seeing increasing interest in S&OP as well.  What I’m seeing is a blurring of the lines between the traditional planning process and the operational or execution processes.  This is being driven by increasing demand volatility, growing global competitive pressures, shortening product lifecycles, increasing supply chain complexities and disruptions because of global outsourcing, etc.  As a result, more and more companies are focusing not just on how they can improve the planning process itself, but how they can execute to the plan in the midst of all these growing pressures.

The problem increasingly is the reality that the best laid plans are immediately challenged as soon as you leave the planning meeting.  The assumptions that go into the sales and operations plan are being stretched, pulled and threatened every day.  More and more companies are focusing on improving the planning process, but putting equal emphasis on how they enable the organization to deal with the fact that the plan will not play out “as planned” in reality.  So, the organization must be able to quickly sense and respond to changes and ensure that people are empowered to respond quickly and accurately to drive action that is aligned with the goals and objectives defined in the S&OP meeting.

I believe this is why you are seeing an increasing focus on demand management (the need to continuously align supply and demand), inventory (a buffer to try to provide better response to changing conditions) and collaboration (the requirement to get closer to the customer and their demand requirements).  All of these disciplines are at the heart of executing to an increasingly inaccurate plan.

This entry was posted on Monday, May 19th, 2008 at 1:35 pm and is filed under Demand management, Supply chain collaboration. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.