Sales and Operations

Planning Agenda
The secret to world class Supply
Chain

1. Overview

2. Simple Example

3. Process Details

4. Real life examples
Apics dinner meeting
5. Q and A
Rob McPhail, CPIM, CIRM,
6. Resources
CSCP
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APICS Definition APICS Definition

A process that provides management the
ability to strategically direct its businesses to
achieve competitive advantage on a
continuous basis by integrating customer
focused marketing plans for new and existing
products with the management of the supply
chain.
3 4

the process must reconcile all supply,
demand, and new product plans at both the
detail and aggregate level and tie to the
business plan

It is the definitive statement of the company
plans for the near to intermediate term
covering a horizon sufficient to plan for
resources and to support the annual business
planning process.

1
 Time Time Periods for Planning
1. Bring on the Consultants!! Horizon

NOT Years
BUSINESS PLAN

Omg not the consultant slides!!! Quarters SALES AND

OPERATIONS PLAN
LONG
Months RANGE
MASTER RESOURCE
SCHEDULE MEDIUM
Weeks
RANGE
MATERIAL RESOURCE
Days PLANS ROUGH
CUT
DISPATCH
Hours CRP
LEAN
5 Capacity Plans 6

Sales & Operations Planning The Monthly S & OP Process

F Business C
O Planning A
R P
E A Single Company-wide
C Sales & Operations C 5 Executive S&OP Meeting Game Plan
A Planning I
S T Recommendations &
T Sales Ops. Y 4 Pre S&OP Meeting Agenda for Exec. S &OP
I
N Plan Plan P Capacity constraints
G L 3 Supply planning Second pass spreadsheets
& A
D Master N Management forecasts
E N 2 Demand planning First pass spreadsheets
M
Scheduling
I
A N Statistical forecasts
1 Run sales forecast reports
N Detailed Planning G Field sales worksheets
D
& Scheduling
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Source: Wallace, Tom F. Sales and Operations Planning, A How-To Guide, T.F. Wallace & Co. 1999.

2
 Who brings what to the table? Sales and Operations Planning
Research
And Marketing Sales
Financial Backlog
Development Product /Sales Plan
Product Plan Plan
Definition Demand

Workforce Business
Capital Engineering Production
Human Availability Plan
Plan Plan
Resources Finance
Master
Capacity Schedule
Business Human Inventory
Plan Marketing Resource Plan
Plan Plan
Operations Materials

Management An integrated Company-wide Game Plan

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Source: Launchbury, Keith J. Principles of Planning Omeric, 1999.

The Balancing Act

Why Plan? Sales Actual Production Purchase

To anticipate and prepare for the future Forecasts Orders Orders Orders

To ensure adequate available resources

Customer service

To focus on being proactive Demand Supply

To avoid problems

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3
Whats the Alternative? The Guru
The only alternative to planning is NOT planning
 NOT planning means difficult to control
 NOT planning means difficult to manage
 Expediting is the opposite of planning

Companies that plan and not expedite will win vs

those who dont.

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2. Lets walk thru an example ACME Bulb

The number one planning software in
500 skus
the world is??
Retail packs, warehouse packs,

40, 60, 100 etc watt

Oem bulk supply

Ornamental, regular

Stocking , Catalogue make to order.

15 16

4
Acme bulb Planning;
-families Information From
Sales
domestic retail bulb Just give me
oem retail bulb the percentage
ornamental
changes in
mix!

17 18

ACME bulb Planning;

-sales forecast Service, Production & Inventory,
A Delicate Balance

Customer
sales m1 m2 m3 m4 Production Service
domestic retail bulb 10 15 15 12

Inventory

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5
 Planning;
AMCE bulb plan Get Input From Operations
retail bulb m1 m2 m3 m4
sales
production
10
10
15
10
15
15
12
15
OK, OK, Ill
inventory 10 10 5 5 8 increase
production
ornamental mto m1 m2 m3 m4
sales 10 15 15 12
production 10 10 15 15
backlog 10 10 15 15 13

21 22

AMCE bulb production plans Planning - Final Step;

with resource Enter Plan into System
Production plan

production plans
domestic retail bulb 10 10 15 15
oem retail bulb 20 25 20 25
Total 30 35 35 40 Last minute
total resource available bulb line 35 35 35 35 minor
loading 86% 100% 100% 114%
adjustments

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 The Monthly S & OP Process
3. Process details
Single Company-wide

Elements that make up the process 5 Executive S&OP Meeting Game Plan

Recommendations &
4 Pre S&OP Meeting Agenda for Exec. S &OP

Capacity constraints
3 Supply planning Second pass spreadsheets

Management forecasts
2 Demand planning First pass spreadsheets

Run sales forecast reports Statistical forecasts

1 Field sales worksheets

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Sales & Operations Planning

F
O
Business
Planning
C
A
Forecasting
R P
E A
C Sales & Operations C
Primary input to S+OP
A Planning I
S T
An necessary Evil.
T Sales Ops. Y
I
Plan Plan

Forecasts will be always be wrong
N P
G L
You need to manage the degree of
& A
D Master N wrongness
E N
Scheduling
M I
Forecast vs budget
A N
N Detailed Planning G
Separate and distinct to S&OP process
D
& Scheduling
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Source: Wallace, Tom F. Sales and Operations Planning, A How-To Guide, T.F. Wallace & Co. 1999.

7
 What is a Resource?
Units of Measure
The unit of measure should be defined in terms of
common use of capacity (typical) examples are:-
are:-

Each

Pair
Anything that adds value to a
Cases
product or service in its
Thousands

Thousands of cases
creation, production or delivery

Gallons

Conductor Feet

Kilograms

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The First steps S & OP Policies

Set up champion
Who attends

Process owner
How far out

Spreadsheet owner
What families

Policies
What target strategy

The players
What resources and levels

The process
Monthly timing

Then the technical stuff
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 Planning Bill
Key S+OP strategies Standard E Class
E Class
Skywindow
Residential Unit
Vented 15% 85%

Type EV(Vented) EF(Fixed)

Chase

Level
15% 5% 5% 60% 5% 5% 5%

Hybrid
2222 2230 2232 2246 3030 3046 4646

Strategic Inventory

Where and What
30% 45% 15% 6% 3% 1%
Low E Heat Sun Clear
Clear Bronze
argon Mirror Guard Laminated

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FUTURCAST S & OP Planning Sheet

4. Yes Victoria , there is SIOP

Real life example of SIOP in action

35 36

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 37 38

SIOP MONTHY execution SIOP Sales Inventory Operations

schedule Planning
P1
PERIOD CLOSE
M1 PERIOD CLOSE MEET
M2 ROD FORECASTING/CONSUMPTION/SUB MEETINGS
P2 SALES FORECASTING
SIOP IS Balance of Supply & Demand
M3 SALES FORECAST MEETING SIGN OFF
SIOP IS NOT Shirt Inside Out Planner (SIOP)
P3 PROD, INV, PURCH PLAN PREP
M4 GSC REVIEW AND APPROVE
P4 DEV KEY RAW MATERIAL Sales Actual Production Purchase
Forecasts Orders Orders Orders
P1 PROCESS 1 PLANS ROD ETC
M1 MEETING 1 M6 INTERNATIONAL FORECAST
MEET Demand Supply

M5 EXEC SIOP REVEW

SIOP RAIL will be the linkage

WEEK 1 WEEK 2 WEEK 3 WEEK 4 39 40

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Questions for discussion Conflict
1. Is it more important to have a accurate
If you dont have any, something is
forecast or a process that can adjust?
wrong
2. What is the #1 fear from sales and
Stick to the facts
operations?
Use the spreadsheet to deflect conflict

Remember having a plan is better then
3. What do you do if operations wont (cant)
no plan
commit?

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Final Thoughts Customer Satisfaction

Any plan is better then no plan

Make a best guess baseline

Then, adjust, adjust, adjust

Executive Sponsorship

Its a team process

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 Customer Service Trend Resources
100.0 99.6
98.3
97.1
Rob McPhail - rmcphail@treeisland.com
90.0

Software and Resources

www.steelwedge.com supply chain planning/software S+OP
www.johngalt.com demand mgt, forecasting
ANNUAL AVERAGE %

83.1
80.0
www.ibf.org integration of forecasting to planning

www.supply--chain.org
www.supply standard business models
70.0

www,greyresearch.com S+op guru, good resource site

www.tfwallace.com S+OP guru. Good exec kits
% Shipped in 2 Days
Fill Rate

Google S&OP
62.7
60.0
% On Time
APICS and IBF conferences

50.7
APICS Dictionary, Tenth Edition

50.0
1996 1997 1998 1999 2000 2001 2002 2003
Sales and Operations Planning by R.D. Garwood. 03818
Year 45
Sales and operations Planning by Thomas F Wallace 03160 46

Qad.com free webinar Thank you

Sales and Operations Planning
The needs of the many outway the
Date: April 29, 2009
Location: Online Webinar needs of a few (Spock)
Sales & Operations Planning is quickly becoming standard
operating procedure for consumer-centric manufacturers who
want to synchronize and align supply capabilities with customer
demand. Join us April 29 for this complimentary Webinar to learn
how S&OP can add value to your organization: Synchronize Your
Supply Chain

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