DEMYSTIFYING SALES AND OPERATIONS PLANNING: A FRESH PERSPECTIVE
S&OP IN DIGITAL SUPPLY CHAINS
Your strategy needs a strategy and S&OP can help S&OP OBJECTIVES • • • •
X-Functional Alignment Planning Horizon, Granularity Decision Making Governance.
Sales and Operations Planning is now considered de rigueur in businesses TRANSFORM
GROW
STABALIZE
GLOBAL IMPACTS
HEALTH&WEALTH
E2E ALIGNMENT
• Geo-Political • Economic • Technological • Health • Energy • Competition • Consumer Expectations
DELIVER
SUPPLY CHAIN RESPONSE
• NPS & CX • Top & Bottom Line • Profitability • Working Capital • Cost Optimization • Stakeholder Value • Eco-Responsibility • Talent Mgmt.
• Sales, Marketing and Financial Plans • Demand Signals and Supply Response • Inventor y Optimization • Capacity and Resource Planning • Customer Ser vice
• ATP/ATS • Fill Rates • OTIF • Costs • Inventor y Levels • Logistics Performance • WH Mgmt. • CO2 Footprint
TACTICAL
OPERATIONAL
EXECUTIONAL
STRATEGIC
Formulating a vision and strategy to sustain profitability is one of the most important expectations from the C-Suite. However, executing that strategy and taking it from top floor to shop floor also requires a strategy affirms Sandeep Walia, Chief Transformation Officer—CTO, Slimstock Middle East Africa (MEA).
I
n all competitive businesses, strategy execution is as important as strategy formulation. Organisations that derive greater value-add from their strategies are ones that have an effective way of putting them into action on the tactical and operational level, which is where S&OP (Sales & Operations Planning), on top of S&OE (Sales & Operations Execution), plays an essential role. Since it originated in 1980s, Sales and Operations Planning (S&OP) has become a business management process of choice for thousands of organizations all over the world. S&OP is a structured process that aligns all functional areas of a Business (Commercial, Marketing, Finance, Operations, and others) under an aligned set of assumptions to achieve goals set in the Strategic and Operating Plans. What is S&OP? S&OP aims to be a decision-making forum
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where plans are reviewed and validated, key business issues are identified, and different organizational functions come together to align on strategic, tactical, and operational objectives. The key input for any monthly S&OP review is the annual Strategy / Operating Plan that aims to ensure strong alignment between Business and Supply Chain Strategy. Supply chain strategy ultimately comes down to making choices. Businesses evaluate the needs of their customers and consumers, and the unique CVP (Customer Value Proposition) that can be offered. It becomes important at this stage to ensure that Supply Chain design is in line with CVP that a business is trying to deliver. If the focus of the business is on NPS (Net Promoter Score), CX (Customer Experience), Customer Service but Supply Chain is focusing only on costs / working capital, there will be lost opportunities surely. The
main deliverables of Strategy Review are: l A plan to deliver Sustainable profitability l Ensure risks are identified, and mitigation plans are in place l Cost and working capital efficiency At the heart of S&OP is a four-step monthly planning cycle, comprising a series of scheduled review meetings: Product portfolio review: What changes are taking place (and when) over the horizon to ensure an attractive product portfolio, that will deliver market share and profitability objectives? Which products will be introduced, discontinued, or changed; what will be the effect of marketing-led promotional activity and what is the timephased product plan? Demand review: Assess forecasting capability and sales planning performance, and to use this information to generate the latest view from marketing and sales, under-pinned with volume and revenue projections. The sales
