A building products company missed several million dollars in revenue last year because they couldn’t meet the demand. Unfortunately, this was a common occurrence. Sales increased dramatically, and they couldn’t scale up their manufacturing operations and adapt their purchase requests quickly enough to take advantage of the opportunity. On the other hand, a key client that implemented SIOP/ S&OP (sales, inventory and operations planning) was able to scale up rapidly and achieve on-time delivery in the high 90%’s. They attribute the success to focusing on SIOP. Our most successful clients are rolling out SIOP (S&OP) programs to better forecast demand and figure out the optimal way to successfully – and profitably – deliver that demand. Recently, I was on WBSRocks to discuss the details of SIOP.
What Should We Consider and/or What Impacts Could Arise?
Listen to our conversation on SIOP. We get into the nitty gritty details.
In the show notes, WBSRocks says: Sales and operations planning is a dark art, and most organizations typically have a very ad-hoc process of forecasting due to its nature. But it’s critical to be directionally correct with your plan. Or you might end up missing opportunities or losing customers. Also, planning is more than just creating a model on a spreadsheet. It requires you to come up with estimates and iterate until every external or internal stakeholder agrees with the plan.
In today’s episode, our guest, Lisa Anderson, shares her insights on why it is important to be directionally correct with sales and operations planning. She also discusses similarities in the planning for products such as E. Coli and 737 aircraft and how involved they both could be. Finally, she discusses why you might not get much value in being too detailed at the item level and why you will need to take an iterative approach to come with the forecasts. Listen to the full show here.
Consider implementing a SIOP/ S&OP (sales, inventory and operations planning) process to get a better handle on your customers’ needs for the next 12-24 months so that you can determine the best way to supply it. SIOP will help determine the best way to provide a superior customer experience (on-time delivery, shorter lead-times, upgraded products and service options, etc.) while supporting growth, profitability and working capital objectives. This will lead back to your manufacturing and supply chain strategy discussions as well as your planning execution discussions.
Please keep us in the loop of your situation and how we can help your organization successfully navigate the current volatility and, more importantly, emerge above and beyond. Several of these types of topics are included in our new eBook Emerging Above and Beyond: 21 Insights for 2021 from Manufacturing, Supply Chain & Technology Executives. Download your complimentary copy and stay tuned for our 2022 special report.