S&OP and S&OE, Separate and Disjointed or a Continuum?
Yes, it is nice to have visibility into your supply chain. It is also helpful to be able to plan months in advance using your newly acquired S&OP solution. Even more interesting is to know what the financial consequences of your planned production are. But how good are the validity of plans generated by S&OP and the quality of the visibility that is provided? What about the execution of the plan? How are you going to make sure that the plan is good enough to execute today this week, this month and beyond? The ability to produce accurate plans ensures, high delivery performance and happy customers. Furthermore, it ensures that your projected financials are not wishful thinking based on inaccurate assumptions of product mix, assumed lead-times and available capacities. Sales & Operations Executions, S&OE, ensures plan accuracy and enables seamless execution.
S&OP plans are basically spreadsheet planning. They are at best 60% accurate and they are intended to be for longer term planning and giving advanced notice to your suppliers for future delivery. On the other hand, with S&OE, the generated plans are more than 95% accurate consistently. S&OE also tells you how to overcome bottleneck resources that result from changes in the product mix and it enables the planners to resolve problems in real-time. Thus, you can avoid a lot of inefficient manual and sub-optimal planning that may be done hastily because of not having an accurate model of your supply chain.
S&OE provides an environment for high resolution representation of your physical supply chain, that is a digital supply chain twin. Lastly, with S&OE, you have the capability to peg orders to customer orders not just at the end of the supply chain but from the very beginning of the supply chain all the way to the end. This capability is intended to give you a much better visibility throughout the supply chain and ability to track the desired attributes of the customer order to be tied to the attributes of your suppliers, WIP, methods of manufacturing and any other relevant attribute that may show up during the making of the end product. Pegging at the very end (post processing) is inefficient and cannot keep track of matching customer orders to relevant attributes in the entire supply chain.
At Adexa, we have designed S&OP and S&OE as a continuum of planning and execution. No need to have two disjointed systems with diverse logic and different data models and databases. To go from S&OP to S&OE just add data as the organization becomes more mature. This journey is what we refer to as the digital blueprint© to take you from spreadsheets to autonomous planning.
For more information on this topic visit Adexa S&OE.