s&op - a case study
TRANSCRIPT
S&OP: A Case Study
Sales and operations planning (S&OP) has been around a long time. With the economic challenges in recent years, the process has seen a resurgence of importance with companies striving to balance demand and supply while maintaining appropriate inventory levels and hitting projected revenue and profits.
This post highlights an actual best-in-class S&OP process from a Fortune 500 company.
Demand plan
June 22: Update product life status for active and end-of-life items; revise new product timing and
volume assumptions.
June 26: Finalize trade and account marketing input and update promotional and event calendars.
June 28: Finalize account plans based on weekly collaborative planning, forecasting, and replenishment
activities.
July 2: Perform month-end activities.
July 3, 5, 6: Generate and validate statistical forecast, analyze and report forecast performance,
identify demand shaping opportunities for excess inventory, and assemble proposed demand plan
incorporating inputs.
July 9: Conduct demand review and finalize demand plan.
Supply plan
July 3, 5, 6: Analyze and report delivery, inventory, and supply chain cost performance; identify and
communicate excess inventory.
July 9: Run material requirements planning and resource capacity planning.
July 10: Analyze supplier, product, resource, and labor load.
July 11: Develop supply plan including new product timing and volume plans.
July 12, 13: Develop supply contingency scenarios with probabilities and financial impacts, reconcile
with master schedule in near term.
July 16: Conduct monthly supply and contingency review.
Reconciliation and senior leadership review
July 9: Participate in demand review, develop revenue projection.
July 16: Participate in supply review, develop gross margin projection.
July 17: Validate price and standard cost assumptions and assemble profit and lost projection.
July 18, 19: Update “risks and opportunities ledger” for gap between newest sales and operations plan
and the budget.
July 20: Publish reconciliation and senior leadership review agenda and content summary.
July 23: Conduct monthly reconciliation and senior leadership review.