Sales and Operations Planning

Sales and Operations Planning - the "art" of matching up your sales forecasts and targets with your operations so that you balance demand and supply. This is the holy grail of all supply chains and one that I am now deeply involved in so I plan on writing about it a lot. I am also very interested in seeing what others are doing in this space.

In my company we are using a book by Thomas Wallace and Robert Stahl called Sales & Operations Planning:  The Executive's Guide. This book walks you through 6 steps. They are:

1. Data Gathering
2. Demand Planning
3. Supply Planning
4. The "Pre-Meeting"
5. Executive Meeting
6. Global Roll-up
7. Global Executive Meeting.

Basically, you start at a very low level and ultimately tie the data into enough summary level data whereby executives can make critical choices about their business. Some issues / choices they need to make:

1. Am I going to sell enough to meet my objectives / Wall Street Commitments?
2. How much capacity should I employ and will it be enough to meet my sales forecasts?
3. How much capacity should I strip out if it appears my forecasts are lower than my capabilities? And, if I strip it out, how much risk am I willing to take concerning missed sales opportunities if I estimated wrong?
4. How much of what should I build (SKU detail)?
5. How much should I deploy out if I have a deployed inventory base?

In the coming weeks I will write more about this but I wanted to start the dialog concerning this critical supply chain topic. It really is what everything else grows out of.

What are you doing in the Supply and Operations Planning arena?

If you would like to read more about this topic, you can go to T.F. Wallace's web site.