|
by Chris Chiappinelli, MA Editorial Staff   | Abstract: | The process of sales and operations planning, developed two decades ago, is starting to take hold among manufacturers looking to better plan for demand. |
When Larry Lapide began giving talks on sales and operations planning at seminars in the early 1990s, his informal audience polls showed that about 30% of companies had enacted the process. Nowadays, the research director at MIT's Supply Chain 2020 program routinely finds that more than 80% of attendees have implemented a sales and operations planning (S&OP) process. While Lapide's data may skew high — a 2006 study by industry analyst firm AMR Research found that 65% of companies have had an S&OP process in place for at least two years — there's no denying the trend. The traditional planning process of hopeful guesses and unexpected constraints is now giving way at most manufacturing firms to a more regimented effort to measure demand and adjust supply. But, while the basic concept behind S&OP is fairly straightforward, implementing an effective sales and operations planning process can be tricky. Manufacturers must first understand the five basic steps of an S&OP process, experts say. And they must find a way to get different functional groups — like production and sales — to work together smoothly. Finally, they must decide where and how technology fits into the S&OP picture. [Click to continue] |