JDA Software maximises benefits of new approaches to S&OP
04 Feb '09
6 min read
Next-generation S&OP processes and solutions are bridging gaps between the demand and supply side of manufacturing operations, logistics, purchasing and upstream suppliers; while also integrating profitability analysis and securing senior leadership involvement to drive strategic business decisions. Synchronizing plans upstream and downstream provides the best possible decision making process for demand-side sales, marketing, financial and the supply-side operational plans — for a far faster return on investment.
3. Leverage the Power of an Integrated S&OP Solution. Companies have traditionally employed a range of software applications to support S&OP processes, often requiring time-consuming data extracts and manually transposing data into multiple spreadsheets and reports. However, independent, disconnected software applications can place a company at risk with outdated data lingering on desktops – fostering inconsistencies in terms of analysis assumptions.
It doesn't take long for downstream users to start questioning data integrity, allowing the opportunity for problems to arise. An integrated solution with built-in, best-practice workflows provides significant benefits by reducing resources spent collecting and analyzing data, building spreadsheets, and transposing the data into presentable formats to support management review.
The right next-generation S&OP solution offers effective capabilities for providing forward-looking views of the business to support the appropriate product, demand, supply, financial and management reviews in a graphical orientation that quickly identifies business impacts, allowing for rapid, informed decision-making.
4. Incorporate Key Corporate Metrics and Long-View Forecasting and Planning. S&OP has the power to impact key corporate metrics, including improvements in customer service, inventory levels, as well as purchasing, production and expediting cost reductions. The process ideally provides continuous improvement in inventory turns, sales, cost metrics and manufacturing efficiencies — with relevant benchmarks linked directly to individuals involved in cross-functional processes and held accountable to a unified S&OP plan.
Industry best practices have evolved from short-term demand and production planning, to a more strategic time horizon that enables a more impactful effect on the attainment of corporate-wide goals and financial commitments. Companies that previously may have had only a cursory understanding of current fiscal year projections are now able to expand their horizon to two to three years or more. Leading S&OP solutions offer unconstrained and constrained views of demand and capacity needs for proactive long-term planning - facilitating optimal responses, as well as shaping future demand to meet business objectives.
5. Formalize Leadership Structure and Accountability for Optimal S&OP Benefits. In JDA's survey, nearly 75 percent of respondents cited corporate culture issues as barriers to effective S&OP implementation. In particular, there was a lack of leadership and support from executive ranks, with only 16 percent of CEOs regularly involved in the S&OP process. Accountability was low across the board. Additionally, demand and manufacturing plans were most commonly cited as the sole outputs of S&OP.
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