Chapter 6 - Integrated Operations Planning

Question 1

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Answer 1

• Sales & operations planning is an integrated combination of :
  
  • Information systems (financial, marketing and supply chain planning)
  • Organizational processes
  • Personal responsibility and accountability

Question 2

Making S&OP work requires…

Answer 2

…higher power (senior leadership) to make different people work together

Question 3

**Keys to successful S&OP implementation
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Answer 3

• Executing the process every month
• Process ownership and clarity of roles and responsibilities
• Organizational commitment to achieving high forecast accuracy
• -Focus should be on the next 3 to 12 months
• One integrated plan that integrates the actions of the entire organization
• Should have a clear leader (i.e. senior management decision making)

Question 4

**Collaborative planning, forecasting and replenishment (CPFR)

Answer 4

• CPFR coordinates the requirements planning process between supply chain partners for demand creation (marketing) and demand fulfillment activities (SCM)
• Process initiated by the consumer products industry
• Developed to reduce unplanned and uncoordinated events that distort the smooth flow of product throughout the supply chain

*demand creation AND demand fulfillment

Question 5

**Description of forecast management components

Answer 5

• [Forecast database] must include timely historical and planning information
• Must facilitate data manipulation, summarization, analysis and reporting
  
  • E.g., Open orders, demand history, marketing tactics, economy, competitor actions
• [Technique] is the computational method used to combine model components into a forecast quantity
  
  • E.g., time-series or correlation modeling
• [Support system] must facilitate the maintenance, updating and manipulation of the database and the forecast
• [Administration] includes organizational, procedural, motivational, cross-functional and personnel aspects of forecasting

Question 6

**Components of an effective forecast management

Answer 6

(figure)
Management (orders, history, tactics)

Processes (administration, technique, support system)

Question 7

Criteria for evaluating applicability of forecasting techniques

Answer 7

Evaluate technique both quantitatively and qualitatively for

• Accuracy
• Forecast time horizon
• Value of forecasting to business strategy
• Data availability
• Type of data pattern
• Experience of the forecaster

Question 8

Categories of forecast techniques

Answer 8

• Qualitative relies on expert opinion and special information
  
  • Costly and time-consuming
  • Ideal for situations with little historical data or when much managerial judgment are required
  • Developed using surveys, panels and consensus meetings
• Time series focuses entirely on historical patterns and pattern changes to generate forecasts
  
  • “The past is a good predictor of the future”
  • E.g., moving averages, exponential smoothing, extended smoothing, and adaptive smoothing
• Causal uses specific information to develop relationships between lead events and forecasted activity
  
  • E.g., simple or multiple regression