S&OP
Strategy
Vendors Factories Distribution Centers Customers Modals Components Finished products Machines Planning Periods
Sales
Logistics
Items Availability Batch Size Initial Inventory Safety Stock Maximum Stock Final Stock Transport capacity in modals Inbound DC Capacity Outbound DC Capacity
Production
Bill of Materials Resource Assignment Number of Resources Hours Available in the Period Preventive Maintenance Resource Consumption Resource Efficiency Production Yield Extra Capacity
Finance
Product Prices Tax rates on products Procurement Costs Resources Fixed Costs Extra Capacity Cost Product Variable Costs Inventory Costs Transportation costs
Result
Integrated Plan Financial Report Social Responsability Environmental Responsibility Supply Procurement Plan Production Components Consumption Plan Production Plan Inventory Plan Production Plan by Resource Resource Usage Plan Extra Capacity Usage Plan Logistics DCs Input Plan DCs Output Plan Inventories on DCs Plan Component Transport Plan Product Transport Plan Modal Usage Plan Sales Delivery Plan Non-Delivery Plan
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Production planning for S&OP

Through a didactic approach, S&OP-online helps organizations achieve sustainable profitability in turbulent scenarios enabling the development of several optimized plans for the business. The online system provides a case where functional teams agree to two-month integrated finance, sales, procurement, production, and inventory plan.

Business leaders cannot be indecisive, but crises challenge them to go from unprepared to prepared as quickly as possible while conditions change over time. For this reason, companies need a scenario planning framework to avoid the time spent on recreating spreadsheets for every situation. Additional insights include:

Have integrated S&OP system for scenario planning to help business leaders' decisions. Don't worry about having the perfect scenario planning process. The use and experience improve the process. Getting everyone aligned effectively helps manage crisis and recovery. Lead cross-functional communication by being truthful and respectful of different views. Bring most updated data available. Leverage cross-functional communication to promote integrated problem-solving and consensus. In turbulent scenarios, don't pursue accuracy, be "roughly right" instead of ''precisely wrong''. Design several plans and be aware of the worst-case scenario. Listen to the judgment of others without being overly critical. Make decisions quickly.

The impact of a big crisis on business plans has only magnified the need for scenario planning. In such times, the fundamentals of integrated scenario planning apply. However, leaders must not confuse a scenario planning framework with several scenarios to follow. An organization operates one agreed S&OP plan. One single strategy helps the business run aligned and synchronized. When some functional leader, as a production director, independently changes his unit plan or targets the owner of S&OP (the C.E.O.) faces conflicting directions: (i) a global direction of the integrated S&OP and (ii) a local new direction from a functional leader.

The functional director (e.g., production director) must recognize the global direction and respect the consensus S&OP plan, and caution to immediate overreaction without a cross-functional review. Overreaction inevitably leads to unnecessary rework. Any conflicting decision must be communicated and reconciled in a consensus plan.

There can only be one planning and control system. When there is more than one plan, in reality, there is none, and chaos occurs with inherent low performance and higher costs. Implementing a consensus plan must be monitored and controlled. Be agile to implement decisions more quickly when time is of the essence. As conditions change, use the framework and someone with deep experience and strong analytical skills to adjust scenarios.


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