GIB Blog

The Importance of Sales & Operations Planning for Sustainable SCM

The smart S&OP process based on the APEO principle: Analyze, Plan, Execute, Optimize.

Avoid bottlenecks and proactively ensure delivery capability

By: Peter Schwarz and Susanne Seitz

Since the beginning of 2020, supply chain disruptions have been omnipresent. Nearly two years of lockdowns as well as home schooling and home office, plus unpredictable damages, have proven that no industry or organization is immune to disruption. The need has never been as great as it is today to create or renew supply chain strategies and adjustments – or at minimum to optimize them. Establishing an agile Sales and Operations Planning (S&OP) process is imperative to manage, understand and evaluate the supply chain to prevent future disruptions. But what steps should be taken to ensure your S&OP processes remain successful and resilient?

First and foremost, the success of Smart S&OP not only depends upon the inclusion of all necessary departments and participants involved in the planning cycle, but requires the same set of accurate, up-to-date data to make unified business decisions. This approach to an aligned S&OP process  strengthens business management, enables cross-functional collaboration, and creates a more adaptable supply chain. Overall, the depth of S&OP integration results in greater supply chain resilience – giving businesses a competitive advantage.

Provide Visibility to the S&OP Team

For goal-oriented work, the team needs access and visibility of all relevant information on future time-phase-dependent demand and production capacities. In addition, the S&OP team should always have access to the latest data on the current inventory status. Resource restrictions like warehouse space, transportation capability, and material shortages and their impact on each other and on the company's overall result should also be visible anytime.

No More Excelitis

The importance of high-quality, up-to-date data should not be underestimated at all – especially because data can become stale very quickly. Even worse, if different departments retrieve data at different times from different systems – and now rely on disparate Excel spreadsheets to make decisions – not only is there a very real risk of conflicting information, but an even greater risk of not being guided by the absolute truth.

Advantages of a S&OP Process for SCM

Since most of the required data is collected and stored within an ERP system, it is beneficial to implement a S&OP process that fully integrates with the core ERP. One of the key benefits of a modern S&OP framework for Supply Chain Management (SCM) is the integration of real-time data, including customer insights and market-related information. This high level of visibility and evaluation of customer demand enables companies to remain agile and respond to supply and demand shifts on a daily basis. Today's S&OP solutions are based on state-of-the-art software enriched and powered by artificial intelligence and machine learning technologies.

Shorten Planning Cycles

When implementing a S&OP process, better visibility of actual demand along with the ability to shorten production planning cycles are crucial requirements to finally satisfy market demand. In order to achieve this, it is essential to obtain the most relevant information to support high-accuracyforecasts and what-if analyses for better decision-making. Modern simulation tools optimize and adapt to a constantly changing supply and demand environment.

Respond to Market Volatility

Today, more than ever, supply chain managers need modern planning tools to adapt to market volatility and share and execute their objectives. These tools include demand, supply and inventory planning solutions, sales and operations planning (S&OP) solutions, integrated supplier networks, real-time production planning, automated data management solutions and self-service analytics solutions.

AI Improves the Supply Chain

It pays off to eliminate silo-based thinking and actions throughout the supply chain. For example, if a question arises as to what the optimal order quantity is for a company, it quickly becomes clear that an answer can only be found on a cross-functional basis. To modernize the entire supply chain, it is convenient to integrate a smart artificial intelligence (AI)-based process that drives alignment between smart factories, warehouses, inventory planning and business units.

However, it is only possible to benefit from IoT and data sets that are already being used if there is a will to switch from classic S&OP to Smart S&OP.

Making Complexity Manageable

The appropriate software makes the complexity of supply chain planning manageable through system-immanent intelligence. The GIB solution, which is natively integrated into SAP and certified by SAP, creates transparency across the entire supply chain – from the production level to management. Companies gain clarity of what needs to change and when to continual optimization of the supply chain process.

Ease Through the Optimization Process

Supply chain process improvement should be understood as a continuous cycle of analysis, planning, execution and optimization. GIB Supply Chain Excellence (SCX) follows this control cycle with the APEO principle. The solution is powerful and precise due to its clear structure that guides every user safely through the optimization process.

Software Makes Supply Chain Controllable

Transparency enables reliable decision-making which sets the foundation for successful supply chain processes. With the right software, it is possible to reduce time-intensive tasks throughout every area of the supply chain, as well as eliminate reliable Excel spreadsheets that are ultimately unscalable.

With GIB SCX, you can secure a strategic, holistic view and establish a framework for efficient operational action. Start now and make your supply chain manageable, transparent, plannable and controllable!

For further information, please contact us.

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