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Sales & Operations Planning (S&OP) is an established industry process that aims at finding a balance between demand and supply and streamlining cross-functional collaboration. Procurement People should learn the Sales & Operations Planning (S&OP) Process. Click here to learn more and register today!
Reason #9 Relentless pursuit of one supply chain metric at the expense of other metrics. Yet, these are similar instructions as what is passed down to the supply chain from executives focused on a specific supply chain metric. Why do companies focus on reducing a specific metric? Sound ridiculous?
I will also pen my 95th report for this week’s Supply Chain Insight’s newsletter. It is one that is often asked: “S&OP How Do I Get Started?” ” S&OP: How Do I Get Started? I asked, “Why is S&OP important to your business?”
Over the last five years, I have helped two companies, Sonoco Products and Owens Illinois (OI) with their selection of technologies to improve Sales and Operations (S&OP) planning. Their journey to be more market driven with a strong focus on Sales and Operations Planning (S&OP) is now seven years old.
KPIs are essential in S&OP as they provide a quantitative framework for gaining visibility, aligning efforts, supporting decision-making, and driving continuousimprovement across the business. Ideally, your S&OP KPIs should consist of a mix of strategic, tactical, and operational metrics.
In the last 30 years S&OPimproved performance in many businesses. However, S&OP has not yet substantially delivered on its ultimate promise of enterprise wide resource management, rolling financial forecasting and strategy deployment. 71% think we need more industry standards around S&OP.
Over the course of the last two years, we at Supply Chain Insight s have worked on a methodology to gauge supply chain improvement. We have found that supply chain metrics are gnarly and complicated.During I strongly believe diversity of experience and thought leads to improved performance.
I have taken myself off the road to write the book Metrics That Matter. They have a goal to be agile and aligned; however, their continuousimprovement processes are making steady improvement on an efficient supply chain model that is anything but agile or aligned. It is a slow week. Most of my friends are on vacation.
Sales and Operations Planning (S&OP) is important to building value chain agility and improving enterprise performance. The building of an effective S&OP process takes many years–often three to seven. Like a marriage, it requires continuous readjustment and renewal. 3) Building the Right Team.
Functional silos define today’s supply chain organization. This lack of alignment is an impediment to improving balance sheet results. My first job was in manufacturing in the 1980’s. Inside-out processes assume that the order represents demand, and that the supply chain’s role ends with a perfect shipment.
However, this year promises a significant paradigm shift where traditional performance metrics are replaced by technology-driven frameworks, as recent breakthroughs with Generative AI in supply chains have demonstrated. Enter our list of supply chain trends for 2024. The integration of AI+ will usher in a profound impact on demand planners.
Labor day also signals the end of summer, and for many supply chain leaders the beginning of 2017 strategy discussions and intense S&OP debates to finalize Q3 and Q4 planning. The focus cannot be about only continuousimprovement of existing processes. Together, let’s tackle building new capabilities!
SIOP stands for “Sales, Inventory, Operations Plan”, not to be confused with “S&OP”. Traditional S&OP planning often deals with product families or wide-ranging product categories and though providing valuable data, this process delivers results at an aggregate or macro level.
It often employs statistical metrics like MAPE (mean average percentage error), which has hit a wall in recent years due to increased demand volatility and this approach's mostly backward-facing nature. Demand Planning often supports sales and operations planning (S&OP) initiatives. Demand Planning. Demand Sensing.
Cardinal Health, a global manufacturer and distributor of medical, surgical and laboratory products, is focused on continuousimprovement of service. Global logistics leaders wanted to improve service levels, lower costs, and fortify Cardinal Health’s supply chain planning process. They already had a Supply Planning COE.
S&OP and Executive Meetings, a Necessary Tandem As mentioned in our article, “Understanding Sales and Operations Planning” , S&OP is a structured planning process that uses forecasted customer demand to drive production schedules. Sales and Operations Planning is no exception.
In the last 30 years S&OPimproved performance in many businesses. However, S&OP has not yet substantially delivered on its ultimate promise of enterprise wide resource management, rolling financial forecasting and strategy deployment. 71% think we need more industry standards around S&OP.
In the last 30 years S&OPimproved performance in many businesses. However, S&OP has not yet substantially delivered on its ultimate promise of enterprise wide resource management, rolling financial forecasting and strategy deployment. 71% think we need more industry standards around S&OP.
They also improved their sales & operations planning process. The Kinaxis solution also provides robust decision support for their S&OP process. Ipsen’s approach to continuousimprovement is interesting; it mirrors the process they used in plants to promote safety.
Interest in sales and operations planning (S&OP) always runs high in times of economic uncertainty, so I’ve been fielding a lot of questions the last couple years from clients on how to do S&OP. The proliferation of alternative terms for S&OP has added to the confusion. What is S&OP?
Nick strongly believes that it is insufficient to drive supply chain improvement through incrementalism. It is just not enough to do a software upgrade or slowly push continuousimprovement projects. Completed in 2012, the ERP project forced the company to standardize organizational design, roles, and metrics. The reason?
In today’s fast-paced business landscape, having an efficient supply chain department is more important than ever. A streamlined supply chain can make a significant impact on the overall success of a business, improving operational efficiency, increasing customer satisfaction, and driving revenue growth.
In today’s global supply chain there is more in-transit inventory and complexity. The teams feel good because cash-to-cash metricsimprove; but in many cases, in the joyous celebrations, companies do not realize that they have reduced capabilities with suppliers and not made improvements in inventory.
It often employs statistical metrics like MAPE (mean average percentage error), which has hit a wall in recent years due to increased demand volatility and this approach's mostly backward-facing nature. Demand Planning often supports sales and operations planning (S&OP) initiatives. Demand Planning. Demand Sensing.
Using this responsiveness as a springboard, supply chain resilience comes into action by managing costs during volatile times and continuouslyimproving processes and workflows to adapt to possible future changes. Flexibility is at the core of a responsive supply chain, which is not just reacting to changes but being proactive as well.
If you’re a supply chain management professional, you’re probably aware of how important it is to continuouslyimprove your skills and knowledge in this field. With the ever-evolving business landscape, staying current on the latest industry trends and best practices is crucial for your success.
Therefore, evaluating performance and creating a comprehensive digitalization strategy are essential for a distributor’s success. Implement Logistics KPIs Identifying and tracking key performance indicators (KPIs) is essential for improving distribution operations.
These were just a few of the themes discussed at this year’s Connections 2014, Logility’s customer conference. Held at the Loews Atlanta, the conference brought together several hundred of the industry’s brightest supply chain professionals to share their opinions, techniques and experiences.
As we have driven improvements in globalization, jobs shifted as companies chased lower costs of labor. Today’s populist movement is about new winners and losers. Border crossing(s), port unloading, and global visibility are barriers. Today’s global supply chain has positions open that they cannot fill.
Does being the best at a specific supply chain function — Demand Planning, Supply Planning, Inventory Planning, Order Fulfillment and S&OP—define a best in class supply chain? Decisions are tradeoffs and need to be evaluated based on their impact and the weighting of key performance metrics. Let’s start with Insight #1.
…for 8:00 AM strategy meeting(s) with clients.) To use the Barnes example, in this blog post, let’s focus on simplicity. Let’s start with a definition. Companies with a deep focus on Sales and Operations Planning (S&OP) will often default to this definition. This requires continue education.
Next, align your service level expectations by rewarding outstanding performance and standardizing metrics about on-time delivery, invoice accuracy and communication. Last but not least, create efficiencies and offer value to your carriers, shippers and 3PL, such as reducing costs and improving carrier margins, among others.
Supply chain talent shortages plague organizations from the executive level to the shop floor and right into the customer’s home. That’s a critical talent gap, too. Today, unlike the ‘90s when supply chain suites first hit the market, the technology has mostly outstripped the user’s ability to leverage it.
These copious, non-linked and editable records are used to manage, control and plan for every eventuality for some of today’s most sophisticated automotive manufacturing plants the world over. When looking at a software solution to support FMEA, it’s easy to ignore the many other requirements within Ford’s CSR.
It enables businesses to achieve operational excellence and improve workflows. Automation supports employees and requires continuousimprovement and governance. The cloud’s role in operations automation spans from providing the infrastructure to run automation tools to enhancing automation with cutting-edge cloud services.
Following this, data sources are identified and shared, and success metrics and business outcomes are defined so that everyone works toward the same goals. Step 3: Metric Selection During the next step, we focus on validating key metrics. can provide tangible indicators of success.
However, standing still and sticking to old dogma’s, not innovate, come up with new ideas and envision a better supply chain planning future is not an option for me. Planning parameters (like a lead time, safety stock, etc) can be maintained continuous and become probabilistic in nature. But where we can, we have to consider it.
Some common-sense metrics to apply at goods receiving include “truck time at the unloading dock” and “time from receiving to putaway.” If you can avoid or prevent the eight listed mistakes, you should have a sound foundation on which to build continuousimprovement efforts, without spending too much time fighting fires.
the “inventory to sales” ratio (inventory levels divided by a month’s worth of sales) spiked in late 2008/early 2009 as the recession caught companies with way more inventory than needed versus suddenly shrinking demand. “In the US economy, overall inventory levels have been ticking up in recent years. Read Full Article.
For example, let’s briefly revisit mistake #6… Utilising staff with the right skills will certainly help you get things right in goods receiving, but without applying some measurements, it’s easy to overlook inefficient processes. Close attention must be paid to people, processes, and the warehouse environment itself.
Now as any architect will tell you, it’s a mistake to build on top of wonky pillars, so throughout this post, we’ll concentrate on aligning the three supply chain pillars … and the benefits of doing so. It’s because that’s what drives confidence and satisfaction among all your business stakeholders.
Balanced Scorecard: A system of performance measurement using a structured combination of metrics. D Days of Inventory: A metric revealing the average time a company holds its inventory (in days) before selling it. Think of it as a carefully calculated price that considers your shipment’s journey, size, and special needs.
” Steve’s response was fascinating and enlightening. I related to Steve’s story of death by a thousand cuts. 21 versus P&G’s.19 P&G’s rate of improvement on the Metrics That Matter was lower than the peer group. Let’s take the case of Cisco Systems.
It starts with the needs of the customer’s customer and flows through the extended supply network. Demand is seen as a fixed set of numbers, and as a result, the team’s focus is on numbers without understanding the drivers of the markets. Continue the Discussion at the Supply Chain Insights Global Summit.
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