Successfully Translating the S&OP Output into a Meaningful Operations Plan
A common disconnect in a supply chain organization can be the translation of the S&OP output into a production plan that accurately reflects the direction of the business. In a CPG business, changes in the sales forecast will occur frequently and any lag in changing the production schedule can have substantial consequences. These consequences are usually associated with low inventory and customer service problems, or on the other hand, excess inventory and and/or shelf-life issues. Having a comprehensive system for communicating the changes in the operating plan is essential.
The optimal system would support a back and forth information flow that would allow for relatively rapid changes in production schedules, e.g. 2-3 week frozen schedules, and ‘slushy’ to ‘liquid’ schedules beyond this time frame. Since the S&OP process should be responsible for developing the sales forecast, it makes sense to translate this information into a manageable production plan. Although these words are simple to say, the execution of this process can be very difficult.
Systems that allow for the rapid and transparent flow of information from the S&OP system output to the Planning group to the Operations Team will be extremely valuable when managing inventories and adjusting production plans. As these systems for monitoring and communicating information have improved, it is giving the Operations Team (Manufacturing) the opportunity to adjust their plans proactively without disruption instead of making drastic changes in their production plans and creating surprises.
See the datatooth platform in action with our Sales and Operations Planning app:
Since all of these separate business entities in a company affect each other, having a system that shows the plans for each area, as well as the performance metrics will make it much easier for the decision makers to react to the current situation. If this system is available across the organization, Manufacturing will be in a position to see the impact of an increase or decrease sales on the production forecast. For example, having a ‘live’ system showing Sales performance can provide Manufacturing with the insights needed to make staffing adjustments.
The datatooth Sales and Operations Planning application can be configured to show all of the essential information regarding the Sales Forecast, Manufacturing Performance, Inventory Position, and Customer Service performance along with any other pertinent information. A business process can be established to set the timing of the updates as well as linking to Enterprise systems to provide data on inventory positions. Having all of this information in one place offers a huge advantage over different team members using their own spreadsheets and tracking information independently. datatooth would have a single version of the data and show when any/all changes were made in the data.
Interested to learn more? Schedule a call with a datatooth Sales Representative today!