Sales & Operations Planning (S&OP) - Ram Nalawade
Transcript of Sales & Operations Planning (S&OP) - Ram Nalawade
Sales & Operations Planning (S&OP)
- What is S&OP?
© SKF Group
Planning System Questions
May 1, 2023Slide 2
What are we going to make?
What does it take to make it?
What do we already have?
What do we need to get?
© SKF Group
Manufacturing Planning and Control
May 1, 2023Slide 3
In order of time span (long to short) and detail (general to detailed):
• Strategic business plans
• Sales and Operations Plan (Production Plans and Marketing Plans)
• Master Production Schedules
• Material Requirements Plans
• Purchasing and Production Activity Control
© SKF Group
Sales and Operations Planning
Annual
May 1, 2023Slide 4
Strategic Business Plan
Detailed Sales Plan
MasterProductionSchedule
MarketingPlan
ProductionPlan
SALES AND OPERATIONS PLAN
Monthly
Weekly/Daily
© SKF Group
Sales and Operations Planning- Benefits
Provide means to update the strategic plan as condition changes.
Provides a tool to manage change.
Enforces functional/departments plans to be realistic and coordinated.
Represents a plan to achieve company objectives.
Provides management visibility of production, inventory, and backlogs.
May 1, 2023Slide 5
© SKF Group May 1, 2023Slide 6
S&OP – Balancing supply and demand
Demand
Supply
S&OP
SCPMSP
MSP: Manufacturing Supply PlanningSCP: Supplier Capacity Planning
Sales Forecasting
© SKF Group May 1, 2023Slide 7
S&OP at SKF
Monthly global process to balance supply and demand, bringing all business operational plans into one integrated plan
• Common Sales Forecasting process- To forecast market demand in order to drive the SKF demand chain
• Common Manufacturing Supply Planning process (MSP)- To decide production volumes to fulfill future demand, stock and service
targets • Common Supplier Capacity Planning process (SCP)
- To secure material and component supply by sharing demand information with suppliers
One consensus plan among Customers, SKF Sales, SKF Factories, SKF Purchasing and Suppliers !
© SKF Group
Sales Forecasting Review
SalesForecast
Monthly Supplier Capacity Planning
Supply Capacity Confirmation
S&OPBA Meeting
S&OP Executive Meeting S&OP BU Meeting
Monthly Manufacturing
Supply Planning
Decision for next Cycle
Monthly S&OP Cycle
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short termoperational
medium termtactical
May 1, 2023Slide 9Slide 9
S&OP focuses on the tactical horizon
FullFlexibility
Completelyfixed
Time
S&OP Focus
S&OP - timeframe
1 2 3 4 5 6 7 8 9 10 11 12 year 2
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Sales Forecasting
May 1, 2023Slide 10
Sales Forecasting1
© SKF Group May 1, 2023Slide 11
Sales forecasting purpose
To forecast market demand in order to drive the SKF demand
chain
© SKF Group May 1, 2023Slide 12
Sales forecasting process
Sales History• From Sales Data Warehouse (SDW)
Market & Customer Knowledge• Macro economic input
- Business Cycle Report- Business Cycle Forecast (F18)- Market surveys- Business climate indices
• Specific customer information - Order book - New business- Customer growth plans- Customer Forecasts- Customer markets
Sales Forecast
S&OPCubes
Create system forecast
as baseline
Enter market intelligence by Collaborators
Approval from Sales Director
INPUT PROCESS OUTPUT
SDW
© SKF Group May 1, 2023Slide 13
Using all available information
The system will use the past to
forecast what will happen in the future.
The job is to look into the future and predict
any changes in the business, based on what
you see and what you expect around the corner.
© SKF Group
Manufacturing Supply Planning
May 1, 2023Slide 14
2Manufacturing Supply Planning (MSP)
© SKF Group May 1, 2023Slide 15
To decide production volumes to fulfill future demand, stock and service targets
Manufacturing Supply Planning purpose
© SKF Group May 1, 2023Slide 16
Sales Forecasting• From S&OP Sales Forecasting
Supplier Capacity Constraints• From Supplier Capacity Work stream
Data• From MDW, OIDW, Custserv
Production Capacity and Stock Target• From Factory
MSP process
DataWarehouse
Production Plan, Stock Projection
and Capacity Needs
Solved issues & Identified issues
for escalation
Sales Forecast
SupplyConfirmati
on
Volume planning on
Channel level
Aggregated to Factory &
Product Group level
Issue escalation
meetings & decide on
actions
INPUT PROCESS OUTPUT
© SKF Group
S&OP Monthly MSP & Escalation Process
Input to S&OP Factory Planning
No
Yes
Data Warehouses
Sales Forecastin
g
Supplier Capacity Planning
S&OP Factory
planning
S&OP Sales & Shipment Forecast
Manuf. constraints & Inventory targets
Data (Inventory, Shipments, Production etc)
Supplier Confirmation
Issues for S&OP
Executive?
S&OP Business
Unit meeting
S&OP Business
Area meeting
S&OP Executive meeting
*Please see “S&OP Calendar” for monthly time schedule
Monthly process end
© SKF Group
Supplier Capacity Planning
May 1, 2023Slide 18
3Supplier Capacity Planning (SCP)
© SKF Group May 1, 2023Slide 19
Supplier Capacity Planning purpose
To secure material and component supply by sharing demand information with
suppliers.
© SKF Group May 1, 2023Slide 20
Supplier Capacity Planning process
Sales forecast per product• From Forecasting Work stream
Factory planned production deliveries• From MSP Work stream
Bill of material• From MDW
SupplyCapacity
Confirmation
DataWarehouse
Production Plan
Elaborate Material & Components
demand out of S&OP Sales Forecast
Material & Components
forecast validated by SKF factories
Material & Components forecast
communicated to suppliers by SKF
factories
Available capacity communicated by suppliers to SKF
INPUT PROCESS OUTPUT
Sales Forecast
© SKF Group May 1, 2023Slide 21
S&OP is based on 3 work streams
SalesForecastin
g
Supply
confirmation
Demand ForecastMaterial Demand Forecast
Supplier Capacity Planning
Manufacturing Supply Planning
S&OP Meetings