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S&OP Pain Points – How to balance supply and demand

Do you lose sales because your demand plan is not up to date? How do you set inventory targets? Do you track forecast accuracy? And … do you do any of this in Excel?

Most companies need a quick response to the market and with Excel, as you can imagine, this is hard to do. A huge spreadsheet including demand and supply plans is often the horrible result. The time required to prepare a reliable Excel plan usually brings missed opportunities and lost sales. Delays in shipments due to components not being available and unhappy customers cancelling their orders are the logical consequence. A lot of companies have the issue that lead times are so long that cancellations occur while raw materials are already in transit or in production. Inventory grows and the company loses millions on slow moving and obsolete inventory (SLOB). Or sales exceeded targets and operations cannot increase supply that fast because the forecast wasn’t close enough to the actuals. Therefore, through the S&OP process, the organization sets a calculated business level that balances expected sales and production capabilities with financial and inventory implications.

To reduce planning time and allow for reliable decision support, more and more companies decide for specialized S&OP software products. They strive for an S&OP process aligning demand and supply planning with financials and long-term company strategy – backed up by the whole management team. Choosing the right software is tricky, calculation capabilities are often similar and nearly all vendors claim to meet all potential requirements. We recommend focusing on system flexibility (no organization is like the other) but built on best practice content and process templates. Add a modern, fun-to-work user interface and look for an agile consulting team providing a lot of knowledge and advice accompanied by a short implementation time (of about 3 months on average) and you are all set.

Many S&OP solutions need to be built from scratch, but obviously pre-defined solutions with a basic set of best practice S&OP content save a lot of implementation time. Why re-invent the wheel and make the same mistakes others already experienced? Defining priority features and most important requirements right at the very project start prevents possible misconceptions. This may be for example the ability of a software tool to link the history of an old product to a new replacement for forecasting, promotions planning or lead time optimization.
Regularly, huge sets of data from different sources like ERP or SCM systems must be automatically connected and used for analysis and forecasts. Don’t wait for your ERP to deliver perfect data, it will never happen.

Increase Sales. Reduce Inventory. Improve Efficiency. Reduce Surprises.

Look into our Factsheet or register here for a free online training of our S&OP centric software solutions. Let’s talk about your processes, your requirements, TCO and what’s in four you.

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