Apics Introduction to s Op Pdm

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© APICS Confdential and Proprietary

APICS Introduction toSales and OperationsPlanning (S&OP)


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Introductions – Presenter

Name

Company/Organization

Position

APICS Certifications

APICS Training

BackgroundIntroduceyourself!

Other Accomplishments


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Presentation Agenda

• SOP !efinition

• SOP process o"er"ie#

• Attri$utes and o$%ecti"es of SOP

• SOP implementation challenges

• &oundation components for successful SOP

• Benefits of SOP


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Sales and Operations Planning S!OP"#efnition

'hat is Sales and Operations Planning

(S&OP)?

A process to de"elop tactical plans that pro"ide

management the a$ility to strategically direct its

$usinesses to achie"e competiti"e ad"antage on a

continuous $asis $y integrating customer(focusedmarketing plans for ne# and e)isting products #ith

the management of the supply chain* The process

$rings together all the plans for the $usiness +sales,

marketing, de"elopment, manufacturing, sourcing,

and financial- into one integrated set of plans*

APICS Dictionary , .th edition


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S!OP – A %alancing Act

SOPProcess

!emand Supply

!emand&orecasts

ActualOrders

SupplyOrders

0esources/CapacityIn"entory


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#e'and and Supply and Volu'e and(i)

Business Plan

1O2345

SOPSales

4arketing

Plan

Operations

Plan

P0O!3CT 4I6

4aster

Scheduling

40P

Plant and Supplier

Scheduling

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Adapted from 'allace, Sales & Operations Planning, 3rd ed., p* 9:;


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S!OP Processes

S&OP

Demand

Planning

Demand

Management

Supply

Planning

Product/

Brand Plan

4arketing Plan

Sales Plan

!emand &orecast

Production

Plan

!etailed

Planning and

Scheduling

Production

4asterScheduling

Transportation

'arehousing

2a$or and

5


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(a,or Attri-utes o. S!OP

Connects $usiness planning to tactical planning

Balances supply and demand at the product family

le"el

Plans at the "olume le"el using aggregate time

$uckets, not the indi"idual end(product mi) le"el

5na$les in a $etter understanding of the customer

and market opportunities and company capa$ilities

In"ol"es sales, marketing, manufacturing, logistics,finance, and other departments

Is a demand( and strategy(dri"en process


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O-,ecti0es o. S!OP

1. Supports and measures the $usiness plan

.5nsures that the strategic plans are realistic $efore $eing

passed to tactical planning

.5na$les the organization to effecti"ely manage changes

to plans

".

Pro"ides for the effecti"e management of finished goods

in"entories and order $acklog to support customer

ser"ice

#.5na$les performance measurement to identify #hen

actual performance has de"iated from the plan

$.5na$les the organization to $e focused, aligned , and

engaged *


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S!OP (aturity e0el'e ha"e o"ercome

challenges and are seeing

significant results

'e ha"e stalled or are

proceeding "ery slo#ly

'e had a smooth

implementation of SOP andfollo# $est practices

'e plan to start again,

learning from challenges

from our past efforts

'e ha"e no plans to

implement SOP at this time

"$%

$%

%

%

%

Source= APICS, >9:.. Sales and Operations Planning Practices and Challenges?


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Co''on S!OP I'ple'entationCallenges2ack of strategic coordination

among departments

Insufficient interaction and

in"ol"ement among groups

2ack of common "ision or

purpose

2ack of commitment from topmanagement

2ack of technology and $elief

in e)isting $usiness systems

Inade9:.. Sales and Operations Planning Practices and Challenges?


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Continuous Impro"ement

Change 4anagement

SOP

oundations o. Success.ul S!OP

TieredPlanning

@orizon

IntegratedSu$(

Process

2eader(ship

Account(

a$ility

!eep

Analytics

Perfor(mance

4etrics

7ridsand

7raphs


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51 – 6iered Planning 7ori8on

Strategic

Tactical

Operational

2ong(range plans, aggregate financial data

4edium(range plans, product family "olume

dataShort(range plans, detail product mi) data for

day(to(day planningey $enefits=

2inkage of strategic corporate goals to SOP processes

Build coordination and alignment of demand and supplymanagement functions and corporate $usiness o$%ecti"es

Pro"ide ease of consensus $uilding $et#een corporategoals, demand o$%ecti"es, and supply o$%ecti"es

A$ility to step a#ay from day(to(day management and seethe $ig picture


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52 – Integrated Su-9Processes

!emand

Plan

Supply

Plan

Corporate Plan

In"entory/

Brand Plan4arketing

PlanSales Plan

Production

Plan

0esource

Plan

2ogistics

Plan

Ne# products/ser"ices, ne# market

segments, price/promotions, demand

forecast, Internet sales, $rands

Production strategy, capacity planning,

in"entory targets, distri$ution channel

design, logistics plan

SOP Process

Su$(processes


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53 – eadersip Accounta-ility

5)ecuti"e

sponsor

SOP process

o#ner

!emand

planning team

Supplyplanning team

Pre(SOP

team

Sets top management e)pectations, authorizes

necessary resources, and clears o$stacles

2eads the monthly SOP planning process, manages

conflict, and guides the SOP teams to#ard consensus

!etermines the sales forecast, pricing and promotions*

0esearches the marketplace, manages sales, products,

and customer ser"ice

Sets production plan to meet demand, details production

rates and capacities, "alidates resource a"aila$ility

4akes decisions on demand and supply $alance,

resol"es pro$lems, identifies issues, de"elops

alternati"es, sends findings to e)ecuti"e SOP

5)ecuti"e

SOP team

4akes decisions on critical issues, authorizes spending

for production, re"ie#s financial plan to $usiness

performance

2eadership accounta$ility ans#ers the

'ho are the o#ners of the SOP

process*? 'ithout effecti"e processgo"ernance SOP process planning, control,

e)ecution, and impro"ement*


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54 – #eep Analytics

Analytics($ased reporting tells the SOP planning

teams=

The data and the application of analytics is at the heart of SOP

'here they are

'hat actions need to $e taken and dri"en do#n into

tactical and operations SOP processes

'hat results and trends are emerging from theirdecisions

'hat correcti"e steps do the SOP planning teams

#hich to take


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5$ – Per.or'ance (etrics

Performance metrics dri"e accounta$ility and o#nership for

SOP o$%ecti"es

Performance metrics make the SOP process rigorous,

disciplined, and factual so e)ecuti"es gain confidence in the

integrity of the SOP process

Tiered approach= supply chain performance e)ample

Tier .= SC cost +CO7S- &orecast "ariance

Tier 9=2ogistics costs In"entory carrying costs

0esource utilization Production plan e)ecution +-

Tier D=&ill rates !ays of in"entory on hand

O$solescence cost 4aterial, la$or, o"erhead costs


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5* – Cange (anage'ent

>An SOP pro%ect is E: percent change management, D:

percent process de"elopment, and .: percent technology?F

Iyengar and 7upta, >Building Blocks for Successful SOP, ? Supply Cain !anage"ent

#e$ie%, 1ol* E, No* .;, 9:.D, .;

5ffecti"e dri"ers of change management=

5ffecting acceptance to#ards o#nership and

restructuring of roles and responsi$ilities!e"eloping necessary ad%ustments to company

culture and capa$ilities

Training employeeGs around the appropriate changes

'inning support of employees #ith persuasi"eness

a$out the appropriateness of the ad%ustments


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5+ – Continuous I'pro0e'ent

>A ne"er(ending effort to e)pose and eliminate root causes

of pro$lems= small(step impro"ement as opposed to $ig(step impro"ement*? APICS Dictionary, .th edition

Continuous impro"ement is important $ecause=

Ideas for process impro"ement come from the SOP teamparticipants H hence more realistic

SOP ena$les continuous monitoring, feed$ack, and

sharing of impro"ement ideas

Once SOP teams see their ideas are heard, they #ill

continually seek #ays to impro"e their o#n performance

5ncourages employees to take o#nership and reinforces

team #orking, there$y impro"ing le"el of moti"ation


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%enefts o. Sales and OperationsPlanning

5sta$lishes operational plans consistent #ith the$usiness plan Continually updates the production, financial, and

sales plan

Pro"ides for cross(functional planning 5sta$lishes regular meetings #ith senior e)ecuti"es

to resol"e demand "ersus supply trade(offs

Checks a"aila$ility of resources to "alidate theproduction plan

Increases team#ork and colla$orati"e skills


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