Our favorite end-to-end supply chain project supported a SIOP (sales, inventory and operations planning) project for growth. Although we enjoy SIOP projects as they are one of the best ways to achieve a win-win-win-win of growth, service, margins and cash, this particular client had some complex data and dramatic growth to consider.
SIOP is all about aligning demand with supply – AND the different functional areas of the organization on one page. Accomplish the second, and all else will fall into place. This particular SIOP project was no different.
First, we had to get everyone on the same page with why we were embarking on this project – how would it help the company? And each individual?
Next, we had to get a handle on demand. What were the growth projections? Were we able to “add up” from the details to the same numbers the executives knew to be accurate at the high level? If not, how would we reconcile these matters? There is no need to get lost in details yet we had to be in the same ballpark. Unfortunately, it is quite hard to execute a plan if we don’t understand the plan in the first place!
Then, we had to crunch the numbers at a high enough level to not get stuck in the weeds yet at a low-enough level that it would still be meaningful to the people who knew what it took to succeed. We had to get past imperfect data and make sure we were concerned with being directionally correct. How could we estimate the number of machines, types of machines, number of people, skills of the people – and even buildings required? Should we be off-loading, moving volume within the facility or outsourcing to other facilities within the system? What could we do rapidly while focusing on customer service and customer expectations including margins and cost?
In essence, we brought the best ideas together with SIOP. When it came together into one process and one document, the answers became clear. We had a plan and clarity on how to triple and quadruple the business – and, now we could execute the plan! To learn more about how to implement SIOP, read our book, SIOP (Sales Inventory Operations Planning): Creating Predictable Revenue and EBITDA Growth.