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TIME FOR THE PERIODIC S&OP CHECK-UP?
· It’s important to know how well you’re doing using the tools within Sales &
Operations Planning: Executive S&OP, Sales Forecasting, and Master Scheduling.
· A one-time look isn’t good enough. Virtually all companies are in a constant
state of change: new customers, new product lines, new markets, new distribution
channels, new sources of supply (including offshore), new enterprise software,
new government regulations, new people, new organizational structures and on and
on. The challenge therefore is to make sure that the tools are being used to best
support the environment you're in today, not last year or last century. Bob and
I feel that companies need to be evaluated at least once per year, often more
frequently (see below).
· You may not need to bring in “outside experts” to tell you how you’re doing;
you can do it yourself. You know your company intimately, far better than outsiders
ever will; you’re the content experts regarding your company.
· You might need some help on the specifics of the tools - the processes - and
that’s where the workbook comes in. The Workbook can be your process expert. It points you to the important, often essential, elements for each of the tools,
and asks you to evaluate – on a scale of 1 to 4 – how you’re doing.
· The heart of the Workbook is three checklists: one for each of the three tools
– Executive S&OP. Sales Forecasting, Master Scheduling. In addition, we’ve
included three sets of principles that underlie the items in the checklist. These principles are intended to explain
the reasoning behind the checklist items.
· For evaluations such as this, groups are superior to individuals. Therefore,
the Workbook contains a CD with a series of Excel files containing each of the
three checklists. These elements can be projected in a group setting, and the
files have the capability to record each person’s score on each checklist item.
· The Excel capabilities include Pareto analysis, pivot tables, and assignment of responsibilities to individuals. Thus the Workbook
can also serve as a tool for managing the improvement activities that flow from
the checklists.
· If a company has an average score of 3.4 or higher on a given tool, then a
once per year review is fine. Less than 3.4 means that more than minor improvement
is needed, and here we recommend a frequency of every 90 days.
Bob and I feel very good about the Workbook and its potential to help companies
plan and manage their supply chains more effectively. We hope you will too. For
a closer look, click here.
Thanks for listening,
Tom
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Tip from Tom: Principle of Master Scheduling #7 states: You can't put ten pounds in a five-pound bag. That's a homely way of saying that a production resource, today, cannot produce
more than it is capable of producing - today. Now some of you, as you read this,
are probably saying to yourselves things like: "News Flash!" or "Duh."
Sure, it's obvious. But how often we violate this common sense principle when
we load the plants - our own and our contract manufacturers - with more work than
they're capable of producing. The result: inventories grow, lead times stretch
out, and backlogs build. Effective capacity planning processes - in both Executive
S&OP and Master Scheduling - are essential to insure that supply is in balance
with demand. Saying it another way: Look before you load.
Click here to see the entire list of Master Scheduling Principles.
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