Comments on: S&OP is Not a Supply Chain Process! http://logisticsviewpoints.com/2009/05/29/sop-is-not-a-supply-chain-process/ Providing logistics professionals with clear and concise analyses of Logistics Trends, Technologies, and Services Fri, 03 Feb 2012 13:28:10 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: mitul09 http://logisticsviewpoints.com/2009/05/29/sop-is-not-a-supply-chain-process/comment-page-1/#comment-41 mitul09 Mon, 01 Jun 2009 07:55:10 +0000 http://logisticsviewpoints.com/?p=1080#comment-41 The tussle between Supply Chain Organization and Sales Organization is never ending. I believe Sales organization must be penalized for forecasting error, at the same time, Supply Chain organization must not use it as an excuse. It is possible to achieve higher service leves and better inventory planning in spite of existing forecasting error. In today's dynamic environment, organizations need to move to more frequent forecasting, which allows them faster demand sensing. Onus of this is on Sales function. However, frequent forecasting will increase the forecasting error. That should not deter Supply Chain Managers from improving their inventory turns and service levels. The math is explained here. http://www.infosysblogs.com/supply-chain/2009/05/resolving_the_puzzle_achieving_1.html#more The concept of demand pacing can be used very efficiently for Supply Planning. Forecast for every period can be tweaked upwards or downwards based on the actual consumption data. Order quantity and frequency can be changed every week to pace the demand for the month and subsequently, for the quarter. S&OP meetings are important instrument to review this plan on a monthly basis. The tussle between Supply Chain Organization and Sales Organization is never ending. I believe Sales organization must be penalized for forecasting error, at the same time, Supply Chain organization must not use it as an excuse. It is possible to achieve higher service leves and better inventory planning in spite of existing forecasting error. In today’s dynamic environment, organizations need to move to more frequent forecasting, which allows them faster demand sensing. Onus of this is on Sales function. However, frequent forecasting will increase the forecasting error. That should not deter Supply Chain Managers from improving their inventory turns and service levels. The math is explained here.
http://www.infosysblogs.com/supply-chain/2009/05/resolving_the_puzzle_achieving_1.html#more

The concept of demand pacing can be used very efficiently for Supply Planning. Forecast for every period can be tweaked upwards or downwards based on the actual consumption data. Order quantity and frequency can be changed every week to pace the demand for the month and subsequently, for the quarter. S&OP meetings are important instrument to review this plan on a monthly basis.

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