Apics Introduction to s Op Pdm
Transcript of Apics Introduction to s Op Pdm
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APICS Introduction toSales and OperationsPlanning (S&OP)
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Introductions – Presenter
Name
Company/Organization
Position
APICS Certifications
APICS Training
BackgroundIntroduceyourself!
Other Accomplishments
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Presentation Agenda
• SOP !efinition
• SOP process o"er"ie#
• Attri$utes and o$%ecti"es of SOP
• SOP implementation challenges
• &oundation components for successful SOP
• Benefits of SOP
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Sales and Operations Planning S!OP"#efnition
'hat is Sales and Operations Planning
(S&OP)?
A process to de"elop tactical plans that pro"ide
management the a$ility to strategically direct its
$usinesses to achie"e competiti"e ad"antage on a
continuous $asis $y integrating customer(focusedmarketing plans for ne# and e)isting products #ith
the management of the supply chain* The process
$rings together all the plans for the $usiness +sales,
marketing, de"elopment, manufacturing, sourcing,
and financial- into one integrated set of plans*
APICS Dictionary , .th edition
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S!OP – A %alancing Act
SOPProcess
!emand Supply
!emand&orecasts
ActualOrders
SupplyOrders
0esources/CapacityIn"entory
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#e'and and Supply and Volu'e and(i)
Business Plan
1O2345
SOPSales
4arketing
Plan
Operations
Plan
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4aster
Scheduling
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Plant and Supplier
Scheduling
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Adapted from 'allace, Sales & Operations Planning, 3rd ed., p* 9:;
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S!OP Processes
S&OP
Demand
Planning
Demand
Management
Supply
Planning
Product/
Brand Plan
4arketing Plan
Sales Plan
!emand &orecast
Production
Plan
!etailed
Planning and
Scheduling
Production
4asterScheduling
Transportation
'arehousing
2a$or and
5
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(a,or Attri-utes o. S!OP
Connects $usiness planning to tactical planning
Balances supply and demand at the product family
le"el
Plans at the "olume le"el using aggregate time
$uckets, not the indi"idual end(product mi) le"el
5na$les in a $etter understanding of the customer
and market opportunities and company capa$ilities
In"ol"es sales, marketing, manufacturing, logistics,finance, and other departments
Is a demand( and strategy(dri"en process
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O-,ecti0es o. S!OP
1. Supports and measures the $usiness plan
.5nsures that the strategic plans are realistic $efore $eing
passed to tactical planning
.5na$les the organization to effecti"ely manage changes
to plans
".
Pro"ides for the effecti"e management of finished goods
in"entories and order $acklog to support customer
ser"ice
#.5na$les performance measurement to identify #hen
actual performance has de"iated from the plan
$.5na$les the organization to $e focused, aligned , and
engaged *
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S!OP (aturity e0el'e ha"e o"ercome
challenges and are seeing
significant results
'e ha"e stalled or are
proceeding "ery slo#ly
'e had a smooth
implementation of SOP andfollo# $est practices
'e plan to start again,
learning from challenges
from our past efforts
'e ha"e no plans to
implement SOP at this time
"$%
$%
%
%
%
Source= APICS, >9:.. Sales and Operations Planning Practices and Challenges?
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Co''on S!OP I'ple'entationCallenges2ack of strategic coordination
among departments
Insufficient interaction and
in"ol"ement among groups
2ack of common "ision or
purpose
2ack of commitment from topmanagement
2ack of technology and $elief
in e)isting $usiness systems
Inade9:.. Sales and Operations Planning Practices and Challenges?
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Continuous Impro"ement
Change 4anagement
SOP
oundations o. Success.ul S!OP
TieredPlanning
@orizon
IntegratedSu$(
Process
2eader(ship
Account(
a$ility
!eep
Analytics
Perfor(mance
4etrics
7ridsand
7raphs
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51 – 6iered Planning 7ori8on
Strategic
Tactical
Operational
2ong(range plans, aggregate financial data
4edium(range plans, product family "olume
dataShort(range plans, detail product mi) data for
day(to(day planningey $enefits=
2inkage of strategic corporate goals to SOP processes
Build coordination and alignment of demand and supplymanagement functions and corporate $usiness o$%ecti"es
Pro"ide ease of consensus $uilding $et#een corporategoals, demand o$%ecti"es, and supply o$%ecti"es
A$ility to step a#ay from day(to(day management and seethe $ig picture
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52 – Integrated Su-9Processes
!emand
Plan
Supply
Plan
Corporate Plan
In"entory/
Brand Plan4arketing
PlanSales Plan
Production
Plan
0esource
Plan
2ogistics
Plan
Ne# products/ser"ices, ne# market
segments, price/promotions, demand
forecast, Internet sales, $rands
Production strategy, capacity planning,
in"entory targets, distri$ution channel
design, logistics plan
SOP Process
Su$(processes
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53 – eadersip Accounta-ility
5)ecuti"e
sponsor
SOP process
o#ner
!emand
planning team
Supplyplanning team
Pre(SOP
team
Sets top management e)pectations, authorizes
necessary resources, and clears o$stacles
2eads the monthly SOP planning process, manages
conflict, and guides the SOP teams to#ard consensus
!etermines the sales forecast, pricing and promotions*
0esearches the marketplace, manages sales, products,
and customer ser"ice
Sets production plan to meet demand, details production
rates and capacities, "alidates resource a"aila$ility
4akes decisions on demand and supply $alance,
resol"es pro$lems, identifies issues, de"elops
alternati"es, sends findings to e)ecuti"e SOP
5)ecuti"e
SOP team
4akes decisions on critical issues, authorizes spending
for production, re"ie#s financial plan to $usiness
performance
2eadership accounta$ility ans#ers the
'ho are the o#ners of the SOP
process*? 'ithout effecti"e processgo"ernance SOP process planning, control,
e)ecution, and impro"ement*
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54 – #eep Analytics
Analytics($ased reporting tells the SOP planning
teams=
The data and the application of analytics is at the heart of SOP
'here they are
'hat actions need to $e taken and dri"en do#n into
tactical and operations SOP processes
'hat results and trends are emerging from theirdecisions
'hat correcti"e steps do the SOP planning teams
#hich to take
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5$ – Per.or'ance (etrics
Performance metrics dri"e accounta$ility and o#nership for
SOP o$%ecti"es
Performance metrics make the SOP process rigorous,
disciplined, and factual so e)ecuti"es gain confidence in the
integrity of the SOP process
Tiered approach= supply chain performance e)ample
Tier .= SC cost +CO7S- &orecast "ariance
Tier 9=2ogistics costs In"entory carrying costs
0esource utilization Production plan e)ecution +-
Tier D=&ill rates !ays of in"entory on hand
O$solescence cost 4aterial, la$or, o"erhead costs
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5& – :rids and :raps
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5& – :rids and :raps cont;"
Promotional Sales
4achine
!o#n
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5* – Cange (anage'ent
>An SOP pro%ect is E: percent change management, D:
percent process de"elopment, and .: percent technology?F
Iyengar and 7upta, >Building Blocks for Successful SOP, ? Supply Cain !anage"ent
#e$ie%, 1ol* E, No* .;, 9:.D, .;
5ffecti"e dri"ers of change management=
5ffecting acceptance to#ards o#nership and
restructuring of roles and responsi$ilities!e"eloping necessary ad%ustments to company
culture and capa$ilities
Training employeeGs around the appropriate changes
'inning support of employees #ith persuasi"eness
a$out the appropriateness of the ad%ustments
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5+ – Continuous I'pro0e'ent
>A ne"er(ending effort to e)pose and eliminate root causes
of pro$lems= small(step impro"ement as opposed to $ig(step impro"ement*? APICS Dictionary, .th edition
Continuous impro"ement is important $ecause=
Ideas for process impro"ement come from the SOP teamparticipants H hence more realistic
SOP ena$les continuous monitoring, feed$ack, and
sharing of impro"ement ideas
Once SOP teams see their ideas are heard, they #ill
continually seek #ays to impro"e their o#n performance
5ncourages employees to take o#nership and reinforces
team #orking, there$y impro"ing le"el of moti"ation
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%enefts o. Sales and OperationsPlanning
5sta$lishes operational plans consistent #ith the$usiness plan Continually updates the production, financial, and
sales plan
Pro"ides for cross(functional planning 5sta$lishes regular meetings #ith senior e)ecuti"es
to resol"e demand "ersus supply trade(offs
Checks a"aila$ility of resources to "alidate theproduction plan
Increases team#ork and colla$orati"e skills
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Additional
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Congratulations=
Participation in todayGs session
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6an> ?ou orAttending=
APICS Introduction to Salesand Operations PlanningS!OP"