S&OP Solution Framework

Sales Function Supply Chain Function

Sales &
Plan Source Make Deliver
Forecast

A. Forecasting C. RM Indent (final quantity to E. Order Booking

Planning – Sales &

Weekly Demand
System Procure)

Supply Chain
Customer wise – SKU Calculation:
wise RM indent qty = RM Norms + Forecast – Stock
Monthly S&OP Meeting

in Hand – Stock in Transit – Stock PO raised F. Production & Dispatch Planning

Vendor Evaluation Raw Material S&OP Process
Past 12 month demand & Sourcing Compliance Adherence
compiled
B. RM Inventory Norms (to improve stock D. MTS (Finished Good – FG inventory norms without
availability) impacting the shelf life)
Statistical Forecast
(ALPHA VALUE) & Market Following inputs to be consider while defining RM Norms: Following inputs to be consider while defining FG Norms:
Dynamics 1. Shelf life of RM – to incorporate ageing 1. Last 12 months demand in values
Use Solver to identify the 2. RM classification based on the volume sales – A, B & C 2. Product mix - High Selling product in last 12 months
alpha value 3. High Repeatability in last 12 months 3. Relative deviation
4. Average Demand and Demand variability 4. Average Demand and Demand variability
Forecasting Accuracy 5. Procurement Lead time and Lead time variability 5. Production Lead time and Lead time variability
6. Service level for the classified product 6. Service level for the classified product

Inventory Related KPI’s

KPI
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