Not So for Execution of the Plan
Planning is probably the second oldest profession in the world! Just about everything we do requires some form of planning. What really matters is the quality and accuracy of the plans. Before you got your S&OP system, i.e. if you did, the chances are that you were using spreadsheets to plan your entire supply chain and/or your factory production. You assumed bucketed capacities, fixed leadtimes and pre-determined bottleneck resources to come up with a rudimentary plan. Guess what, your S&OP system still uses the same approach to deliver a plan. And that explains why it is not easy to put these plans into execution. They are generally only 60% accurate; hence a lot of manual intervention is needed. Some users say, “this is good enough!” However, let’s not forget that an accurate plan can indeed deliver much better utilization of resources, it can significantly cut the cost of production and optimize inventory levels.
Accurate plans can save your company millions, if not tens of millions, of dollars on an annual basis and more importantly increase your market share.
According to Gartner: “… Digital Planning is about improving the quality of planning decisions.”
All of this can add up to saving your company millions, if not tens of millions, of dollars on an annual basis; and more importantly increase your market share because of superior delivery performance. Would you still say, an S&OP plan is good enough? According to Gartner: “ … digital planning is about improving the quality of planning decisions.”
In order to make plans that are optimal and executable you need to deploy S&OE or Sales & Operation Execution systems that are capable of performing much better modeling of your environment, automatically run through many different scenarios and use algorithms to optimize every plan every time. And by the way, no more need for manual adjustments of the plan. Learn more about S&OE Here.