Sales and Operations Planning (S&OP)
20/07/2011
Independent logistics and supply chain consultancy Total Logistics White Paper on Sales and Operations Planning (S & OP) takes the form of a case study relating to the deployment of S&OP for a Japanese HQ manufacturer, with turnover of around $2bn.
The company has manufacturing operations in Japan, France, South Africa, Sierra Leone, Brazil, Chile and the USA. Sales and distribution operations exist in around 90 countries. The company’s products are both made internally and sourced from third party suppliers. They are sold globally, in a wide variety of retail and wholesale markets.
The company had implemented S&OP initially at plant level in 2007-8, but the deployment had been variable in sustainability and quality. In 2009, it was decided to make supply chain operations more global, to consolidate supply and procurement functions, and to implement robust and relevant S&OP processes to integrate and align all worldwide operations. The company uses SAP R/3 and APO systems, which were used as the platform for the new processes.
The new S & OP processes achieved significant business improvements in customer service, working capital and EBITDA. Early benefits enabled the programme to pay for itself before final deployment. In addition, the project set in place an enduring structure and culture to enable continuous improvement.
Key S &OP Benefits achieved
The project achieved a wide range of business benefits, including:
• Inventory reductions of 10-40% by SKU
• Capacity utilisation improved by 15% at key plants
• Procurement savings on 5%-15% by material from consolidation
• Customer service performance up by 18%
• Customer complaints down by 90%
• Reduction of third party outsourcing for manufacturing by 50%
• Number of warehouses planned to reduce by 30%
Access the full White Paper, including a breakdown of the strategy adopted and the processes involved, the Total Logistics Download Centre.
Total Logistics Supply Chain Consultancy provide strategic logistics and supply chain advice in Europe and the UK including S&OP, supply chain management and logistics planning, warehouse design and warehouse layout.
