Sales and operations planning S OP

In the evolution, the vertical silos of supply become connected through horizontal processes. The most common horizontal processes are revenue management, sales and operations planning (S OP), supplier development, and corporate social responsibility (CSR). (This transition is covered in great detail in Chapter 5.) These horizontal processes become connectors for the end-to-end value network. They align the traditional supply processes of source, make, and deliver against a business strategy. When companies successfully build market-driven value networks, demand and supply volatility can be traded off bidirectionally... 

What was the answer for Cisco The company built strong horizontal processes to coimect sales and operations planning (S OP) to contract manufacturing. Based on this process evolution, it was one of the first companies to sense the economic downturn of December 2008. It weathered the storm of the recession with no write-offs. 

In this section, it will be performed a literature review for each one of the four categories of the Demand management - Statistical Forecast, Sales and Operations Planning (S OP), Collaborative Plaiming and Forecasting Replenishment (CPFR) and Vendor managed Inventory (VMI). This review allowed identify the DDSC characteristics for each category which was used to develop the five level maturity model. 

For people driven forecast, it is suggested to apply Sales and Operations Planning (S OP) and Collaborative Planning and Forecast Replenishment (CPFR), as they represent structured and formal processes to align demand figures across different functional areas and different organizations. 

Based on Wallace (2004), Sales and Operations Planning (S OP) is a business process that helps companies keep demand and supply in balance. It does that by focusing on aggregate volumes (e.g., product families or product groups), so that, mix issues (individual products and customer orders) can be handled more readily. It occurs on a monthly cycle and displays information in both units and dollars, thus it integrates operational and financial planning. 

There are a few options of capacity optimization open to a manager and there are proven processes to assist him or her. One such process is aggregate planning where an organization determines levels of capacity, production and inventory over a planning horizon to maximize the profit. The optimization can be attempted either in theory by a mathematical model (e.g. linear programming) or in practice by a cross-functional continuous review process (e.g. sales and operational planning, S OP). Our preferred and practical option is S OP which is covered in Chapter 18. 

In spite of the great opportunities provided by supply chain visibility and workflow automation the true potential of e-supply chain can only be realized when it is supported by an executive decision-making process that optimizes the automated flow of materials based on the information available from supply chain visibility. This executive decision process is collaborative planning which can only be effective through a real-time coimnunication network via Intranet, Extranet and B2B portals (or trading hubs) and a sales and operations planning (S OP) process. Figure 12.2 show the e-supply chain communication network of a pharmaceutical company. The S OP is described in Chapter 16. 

Sales and operations planning (S OP) It is derived from MRP and includes new product planning, demand planning, supply review, to provide weekly and daily manufacturing schedules and financial information. Also see MRPII. S OP is further explained in Chapter 18 (see Figure 18.2). 

This capacity planning has two subcomponent parts — sales and operations planning (S OP) and advanced planning and scheduling (APS). The former is a well-established process and is complemented by the capabilities that the latter brings. Attention is given to both subjects in the... 

---