According to Gartner: “The No. 1 challenge among manufacturing companies is connecting sales and operations planning (S&OP) to operational plan [i.e. execution].” S&OP provides long-term visibility but because of its high-level modeling capability (merely MRP combined with spreadsheet type of capacity planning engine), it cannot produce plans which are accurate enough for execution and/or short-term disruptions and changes that are inevitable in every organization. For accurate planning and the ability to respond correctly to the end customers, and be able to automatically recommend to the users what to do and when to do it, S&OE, or Sales & Operation Execution, is needed. S&OE not only forms accurate models of the supply chain but also performs order pegging. One of the shortcomings of S&OP is the lack of order pegging capability throughout the entire supply chain. It is done only as a post-processing task to match the end user with what has already been planned rather than planning for what had been requested.
Amongst the benefits of S&OE are lower inventory requirements and higher responsiveness since products are made based on exactly what is needed and drawn from an inventory that is designed precisely for the demand. Below are some of the results that were obtained by implementing Adexa’s supply chain planning solutions at Seagate Technologies worldwide.
- Improved Efficiency
- Reduced planning process by up to 50%
- Created plans that are executable with little to no manual intervention
- Freed up resources to go after more enhancements
- The accuracy of plans have improved
- Capturing 50% more demand upsides within LT in Consumer
- Reduction in inventory
- Much better visibility
- Immediately identified mis-positioned inventory
- Optimal use of all existing components and FG before additional purchase or production
- Increased capacity and component shortage visibility
- Pinpoint root causes impacting on-time delivery
- Faster response and increased velocity of doing business
For more information on Execution visibility please refer to Sales and Operations Execution S&OE Solution page.