This month it’s exactly 20 years ago that I first traveled to the corporate headquarters in Houston to participate in a worldwide project to redefine the global planning process for Compaq Computer Corporation. At the time we did not call it S&OP, we called it supply chain planning. Our challenges then? We had 8 levels of judgment by sales, product managers, planners and procurement between the forecast in the sales offices and what we communicated to our suppliers as ‘the plan’. As you can imagine, with so many people making changes to the plan, the outcome was probably less reliable than rolling dice. When we started our journey towards a global S&OP process our suppliers awarded us the title of “least reliable in the industry”. Continue reading
In my years as Research Director at SCC it was pointed out many times to me that we (accidentally?) omitted “one of the most important metrics in supply chain: Forecast Accuracy”. Many people believe this “It’s all about forecast accuracy” to be true. In practice it is not however.
I agree that garbage-in, garbage-out does apply to S&OP just like every other process. Continue reading
Here’s the deal: You know your supply chain is special and using a one-size-fits-all approach like Sales & Operations Planning (“S&OP”) is not for you. Or you operate a process that is too complex. Or maybe it doesn’t require such a complex approach. And then when you tried it; the statistical forecast was inaccurate and executing the plan resulted in shortages and excess at the same time. You know you are right: S&OP is not for you. Or is it? Continue reading