The great hour of sales and operations planning

Why S&OP is essential and how prototyping the S&OP process in the digital twin allows you to quickly achieve an operational process while keeping all options open.

First coronavirus, then the Ukraine war: first shifts in demand between markets and products, then an overshoot in demand due to government subsidies, then a shortage of containers, now insufficient transport capacities for sea, land and air freight and unreliable production capacities in the Far East, as the Chinese no-Covid strategy is not working. Breaking off trade relations with Russia; Russian blockade of grain exports from Ukraine with consequences for uninvolved developing countries. At present, the Chinese oppression of the Uyghurs in the Yinjiang region is once again in the public eye, with presumed repercussions for trade relations with China. The list could be extended considerably…

Have we ever had so many massive and abrupt distortions and disruptions in international supply networks in the developed world since the end of the Second World War?

Now is the big moment for Sales and Operations Planning. Of course, S&OP cannot be used to reconcile fluctuations in demand, unreliable in-house production capacities due to coronavirus and dried-up procurement markets, but at least the actions are coordinated in order to supply the company’s own markets as well as possible.

For many companies that do not have an organized process for matching demand and supply, there is currently a risk that the many individual guerrilla actions will interfere with each other and that no cohesive picture of the situation will emerge to enable coordinated action.

Sales and operations planning is a necessity, as we realize with our project inquiries, and we do what we can to help as many companies as possible. Unfortunately, a useful S&OP process is not organized “quickly”. If you don’t want to or can’t fill it with crowds of people, it requires consistent support from suitable software functionality. Not only does a lot of data have to be constantly updated, shoveled around and calculated, the entire processing sequences also have to be run through one after the other in an S&OP-compliant and speedy manner. S&OP is 80 % software and 20 % organization.

That sounds daunting at first if you want to “organize” something as quickly as possible in your time of need. However, it also has one major advantage: organizational processes are designed quickly, but getting them to work consistently is a lengthy and time-consuming process – change management, in other words. Processes in which the participants are guided by software to an organized procedure reach their goal more quickly despite the time required for system implementation. Unfortunately, this usually forces you to decide on a software system before you know your requirements in sufficient detail.

This is where our special approach comes into play: prototyping the S&OP process in the digital twin. With this approach, we quickly help you to achieve a software-controlled S&OP process that can be operated without a preliminary decision on a final software tool. A detailed organizational and technical requirements profile for your S&OP process is also created. While the prototyping process continues in practice for as long as you wish, you can take your time and, if necessary, develop your own ideas based on the detailed requirements profile. prepare and set up the fully designed S&OP process in calmer times – or discontinue the prototype process when your supply chain management is back in sufficiently calm waters.

Picture of Prof. Dr. Andreas Kemmner

Prof. Dr. Andreas Kemmner

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