The great hour of Sales and Operations Planning 

Andreas Kemmner

Why it is nearly impossible to operate without S&OP in these challenging times and how prototyping the S&OP process in the digital twin can quickly lead to an operational process and keep all options open.

First Corona, then the Ukraine war: first shifts in demand between markets and products, then an overshooting of demand due to government subsidies, then container shortages, now insufficient transport capacities for sea, land and air freight and unreliable manufacturing capacities in the Far East because the Chinese no-covid strategy is not working. Breakdown of trade relations with Russia; Russian blockade of grain exports from Ukraine with consequences for non-involved developing countries. Currently, the Chinese oppression of the Uyghurs in the Yinjiang region is again in the public spotlight with presumed impacts on 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 World War II?

Now is the big time for Sales and Operations Planning. Of course, even S&OP cannot reconcile fluctuations in demand, unreliability of in-house manufacturing capacity due to Corona, and dried-up procurement markets, but at least it coordinates actions to supply a company’s markets as properly as possible.

Companies that do not have a structured process for balancing demand and supply, risk that the many individual guerrilla actions will interfere with each other, and no coherent picture of the situation will emerge that would allow coordinated action.

Sales and Operations Planning is urgently required. This we notice through the project enquiries that reach us and we do what we can to help as many companies as possible. Unfortunately, a useful S&OP process is not organised “quickly”. If you don’t want to or can manage it with masses of staff, it requires consistent support through appropriate software functionality. Not only does a lot of data have to be continuously updated, shovelled around and calculated, the entire processing sequences also have to be run through speedily in an S&OP-friendly manner. S&OP is 80% software and 20% organisation.

This sounds daunting at first, if you want to “organise” something hastily in your time of need. But it also offers a great advantage: organisational processes can be 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 organised procedure reach their goal faster, despite the time required for system implementation. Unfortunately, this usually forces you to decide on a software system before you know your requirements sufficiently well.

This is where our special approach comes into play: prototyping of the S&OP process in a digital twin. With this approach, we quickly create a software-driven S&OP process that can be operated without having to make a preliminary decision on a final software tool. Along the way, a detailed organisational and technical requirements profile for your S&OP process emerges. While the prototypical process continues to run in practice for as long as you wish, you can prepare and build up the fully designed S&OP process based on the detailed requirements profile in peace and quiet and, if necessary, in calmer times – or discontinue the prototypical process again when your supply chain management returns to sufficiently calm waters.

Andreas Kemmner

Autor | Author

Prof. Dr Kemmner has carried out well over 150 national and international projects in over 25 years of consultancy work in supply chain management and reorganisation.

In 2012, he was appointed honorary professor for logistics and supply chain management by the WHZ.

The results of his projects have already received several awards.

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