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(This is an ongoing column in The Journal, which is intended to give a brief view on a potential topic of interest to practitioners of business forecasting. Suggestions on topics that you would like to see covered should be sent via email to [email protected]).
This column represents the last of a three-part series covering the Sales and Operations Planning (S&OP) process. As discussed in Part I, S&OP has been lately receiving a lot of attention as industry-wide studies and companies are recognizing its value in improving the tactical and operational planning to prepare the supply chain for meeting anticipated customer demand. S&OP appears to be driving supply chain benefits such as better meeting customer demand while at the same time resulting in reduced inventories and minimized supply chain operating costs.
In addition, an indicator of a longer term interest in the S&OP process is the fact that, according to AMR Research, companies have spent over $12 billion in supply chain planning application software over the last 6 years. Yet while spending significant sums of money on the S&OP-related software, they are not seeing the benefits they expected because many did not change the process to fully leverage the enabling technology.
This last column in the series is designed to help users modify their S&OP processes to improve the execution and accuracy of their supply-demand plans, as well as to help users determine the appropriate enabling technologies needed to support changes to the process. Since it makes sense to know where you are before you determine where you want to go, it recommends the use of a diagnostic tool called the S&OP Maturity Model. The model can be leveraged by users to help assess where their process is and the opportunities for improving it.
WHYA MATURITY MODEL?
Process innovation and change are always difficult in any organization because it means changing:
* The decision-making
* The information used to make decisions
* The tasks that need to be done
* The skill-sets of the people involved
These need to be identified first and then software technology needs to be chosen that best supports any changes.
Part I of this series dealt with the elements of an ideal S&OP process that are needed to get...