Exam 2 - Sales and Operations Planning Flashcards
Sales and Operations Planning
Process for integrating marketing and operations plan to develop a tactical plan
Attempt to balance supply and demand
Formal S&OP
Opportunities to…
- Share numbers
- Review data/field intelligence
- Confirm or change plans in order to reach strategic goals
- Provide a forum for multiple departments to coordinate
Quantitative Benefits
- Improved forecast accuracy
- Higher customer service
- More stable supply
- Better new product introduction
Qualitative Benefits
- Better organizational teamwork
- Faster and better aligned decision making
- Greater accountability for performance
- Better business visibility
Steps to S&OP Success
- Innovation & strategy review
- Demand review
- Supply review
- Financial integration
- Executive business review
Rolling planning horizons
Allows for re-planning every period for a given number of periods into the future
- Going from forecasted to actual data
- Machine/Equipment breakdowns or upgrades
- Labor issues (strikes)
- Social/Political issues
Lean production
Systematic method for waste minimization within a manufacturing system without sacrificing productivity
Types of waste to eliminate
Muda
Muri
Mura
Muda
Non-value adding work
Muri
“Overburden” or too much work on a single person, system, or machine
Mura
Uneven work
Types of Mudas
- Transport
- Inventory
- Motion
- Waiting
- Overproduction
- Over Processing
- Defects
Collaborative, planning, forecasting, and replenishment (CPFR)
Supply chain partners share forecast, and demand and resource plans to reduce risk
Elements of CPFR
- Strategy and planning: Changes to products, locations, pricing, promotions
- Demand and supply management: Forecasting
- Execution: Order fulfillment
- Analysis: Data on key performance metrics
Block-Chain
Decentralized digital ledger
No one owns it- vendors are hesitant (unlikely) to share all of this data openly
Aggregate Production Planning
Balances production, inventory, resources and demand
Holding inventory
Having inventory on hand
Regular production
Average labor and benefits
Overtime
Working more hours than standard
Hiring
Finding, acquiring, and training new employees
Fire/Layoff
Separation packages
Backorder/lost sales
Expediting supply, lost goodwill
Subcontracting
Unit cost and loss of control
Level Strategy
Produce at a constant rate, use changing inventory levels to buffer supply and demand
Chase Strategy
Change production to match demand, inventory remains relatively stable and low
- Most common with HIGH inventory costs
- Best with flexible labor and equipment
- Can’t “store” product
