How Operations Planners Can Develop a Modern S&OP Strategy
Jesse Kelber - November 01, 2022
Many planners continue to struggle to develop an S&OP strategy that can truly handle supply chain volatility. To be successful, operations managers need an agile plan, capable of dealing with ever-changing complexity. Although many companies are good at adopting the latest manufacturing technology or computer hardware, sometimes the most impactful change can occur with a shift in the overall S&OP process.
Despite Consistent Technology Development, Process Evolution Remains Largely Stagnant
S&OP has traditionally involved a yearly budget and monthly revisions to balance supply and demand. In the past, this strategy was successful, as constant market behaviour meant it was better to make a plan and stick to it. Now, supply chains are becoming more and more unpredictable, and plans often need to be updated in real-time to avoid loss of revenue. One of the best ways to remain agile in an evolving production landscape is to take advantage of a manufacturer’s existing data. Using this historical and real-time data to modify the S&OP strategy can actually have a greater return on investment.
Companies Want Scenario Planning, S&OP Solutions are the Answer
Thankfully, S&OP software solutions are available that use a company’s own data to inform real-time decision making and help make more granular responses to supply and demand. Interestingly, these solutions don’t need to be exclusive from more traditional Excel spreadsheets. Software options like the flexis solution offer the ability to connect these modern AI-powered tools directly with ERP-Systems or other IT infrastructure. Plus, they can combine these solutions with the Excel sheets planners are comfortable with to make the transition to advanced data analytics easier. Even for operations resistant to change, these software solutions can fit with the current S&OP process to facilitate the transition to a more reactive planning process.
So, as planners look to improve their S&OP strategy, modern technology like AI can be used to expand beyond a focus on a once-per-month meeting to instead develop a continuous, flexible system that aligns with the modern production environment. Only scenario planning can support real-time decision making for unpredictable events. But this doesn’t mean replanning every time something happens that disrupts the supply chain. Instead, managers can focus on decision impacts by defining thresholds for when to trigger a replan, saving both time and money.
To Meet Current Supply Chain Goals, Companies Need Modern Solutions
The 2021 Gartner Supply Chain User Wants and Needs Survey found that 30% of enterprises list speed and quality of decision making as one of the top three internal obstacles to achieving their current supply chain goals. Now, operations managers can use S&OP solutions to collect continuous information and support business values while assessing risks and opportunities in real-time. These services are also not a one-size-fits-all. With service-based software, like the flexis S&OP solution, Excel spreadsheets up- and downloads can be used during the transitional phase, or to target specific gaps within the S&OP process. The result is a robust strategy capable of handling all the challenges thrown at a manufacturer throughout the planning year.
What are your experiences when it comes to your S&OP process?
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