Sales and Operations Planning (S&OP) is a strategic business process that successful companies use to anticipate and synchronize the executive, supply, demand and financial components of their business to achieve focus, control, alignment, and superior business results.
People, Process, and Demand Works
Nearly all mid-sized and larger businesses can benefit from S&OP, but it takes three things to do it effectively:
- People who are committed to planning and working as a team, headed by an interested and involved executive leadership;
- Process including consistent and productive monthly demand review, supply review and executive consensus meetings;
- And Tools like Smoothie® Server, Cloud Smoothie®, and Finite Capacity Planning that provide the visibility, scale and simulation capabilities that unify demand, finance, inventory and capacity in a single, highly visible framework.
You need all three, and Demand Works excels at providing world class tools for S&OP.
Why Companies Need S&OP Software
Some people say that you can do S&OP with just Excel. That’s true, but only if you don’t have many items, sources of demand, or capacity issues. The reality is that most modern businesses have thousands of items, sell through multiple channels, and have to make complicated sourcing or timing decisions.
Here are some of the key benefits of scalable tools for S&OP:
- Automatically generate reports to support demand and supply review meetings.
- Align and synchronize execution with aggregate plans.
- Improve accountability and forecast accuracy with world class statistics and collaborative input.
- Monitor supply chain performance and compare multiple scenarios.
- Change scenarios on the fly and immediately analyze possible outcomes during S&OP meetings.
Consensus, Accountability and Alignment
With Demand Works, the sales and operations plan will begin with a highly accurate and automated expert forecast. Changing levels, trends, intermittency, seasonality and external events are considered. Once you have a good baseline forecast, you can then gather collaborate input, gaining consensus and fostering accountability.
Smoothie has two different technical approaches for supporting collaboration, including a light but highly functional version of the standard browser user interface, or macro enabled Excel spreadsheets which can be automatically distributed and consolidated back to the server. By providing useful information such as baseline forecasts, historic sales, backlogs and previous plans in a single integrated framework, collaborators are able to efficiently provide quality demand signals to the rest of the organization.
Demand plans are then combined with production, procurement, inventories and resources to produce well-balanced and highly visible plans. Smoothie’s Pivot Planning® makes it easy to view demand, inventory and supply at any level of aggregation, and in any unit of measure. Smoothie has full visibility to all supply related information such as costs, bills of material, formulations, and transaction details such as sales prices, open orders, purchase order balances and in-transit inventories.
Demand Works supports the generation and storage of multiple demand-supply scenarios. Scenarios can be compared to each other, or to actuals. And, you can easily distribute plan information to all participants and stakeholders. Smoothie’s scenario-based planning enables best-in-class forecast performance reporting, simultaneously measuring bias and weighted errors at any level of aggregation and with varying time lags. It’s vital to be able to evaluate forecast performance with time lags that are consistent with lead times.
Finite Capacity Planning
Capacity planning is an essential component of S&OP and integrated business planning. Demand Works’ Finite Capacity Planning goes beyond traditional rough-cut capacity planning. It doesn’t just highlight problems. Instead, it will solve for optimal material-resource-time assignments and recommend an optimal solution. It will suggest strategic inventories when appropriate, and it will automatically spread material requirements across resources to minimize cost or maximize throughput, so you can prepare your business for seasonal peaks, planned outages, or rapid growth.
If Demand Works does something, it does it in a world class way. The Finite Capacity Planning option for Smoothie® Server and Cloud Smoothie® is no exception. The optimization is fast enough to handle industrial-sized master planning problems with dozens of resources and thousands of materials.