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You simply need to know what do (Next).”
 A formal process, consisting of series of meetings, where data
from various areas of business is discussed and decisions are
made.

 The goal is agreement between various departments on the best

course of action to achieve the optimal balance between supply
and demand and to meet profitability goals.
 Brown-Forman Corporation believes its approach to S&OP is
a better way to align supply and demand with the company’s
business requirements, build better internal communications,
and plan activities to meet customers’ needs.

 ExxonMobil Chemical leverages sales and operations

planning to improve customer service while controlling costs.

 Procter & Gamble credits its own version of S&OP with

creating a single set of sales and supply plans to optimize
resources to support the company’s business objectives –
assessing the financial implications of the plan as well as its
impact on both supply and demand.
 Sales and Operations Planning (S&OP) was originated
by Oliver Wight more than twenty-five years ago
Customers are demanding: Increasing business risks of :

Accurate and timely commitments Too much inventory

Shorter lead times Inventory in the wrong place
Flexibility Ordering the wrong inventory
Product differentiation Missing delivery dates
Dedicated inventory Losing orders
Visibility into the supply chain Shipping the wrong products
High quality Increased expediting costs
Automation Losing customers
Lowest costs Increased obsolescence

Forcing businesses to better manage:

Inventories Supply/Demand Stocking policies

Ability to promise Forecasts VMI/SMI processes
Global suppliers Cycle time Replenishment
Over 400 skus, 15 brands & 19 pack size

Brand Promotion Activities

Limited time offer product launch

Frequent Pack & MRP Play

Location wise MRP variance

Consumers

400+
 Management Annual growth Targets

Quarter
Annual/
RSA Data Industry Trends Growth Expectations

Regional /Geographical Targets

State/City Targets
RM Availability Line Capacity Shut down

Weekly
Monthly/
ASM Targets
Secondary

Float Glass Distribution Cost

Primary /

Demand

Indirect/
Direct Route
Distributor
Targets Capacity Trade Promo Trade Scheme

Fortnightly
Weekly/
Targets
Channel
Demand

Catchment Cost

Retail Channel: IC/FC etc

Consumer

weekly
Weekly/ Bi
Demand

seasonality ATL Campaign New Launches

CONSUMER
Store Location Competition

Consumer Promo
 Statistical Consensus Updated Forecast
Demand Forecast Forecast
Planning
Master Data Management & Workflows Forecast Netting

SAP / Order Management

Master Inventory Netted
forecast
Planning Planning Master
Planning

Sourcing
Manufacturing Rules Production Planning &
Planning & Scheduling
Scheduling

Distribution
(Deployment) Deployment Planning
Planning

Transportation Transportation Management System

Secondary Tertiary
Planning & Execution Shipment Consolidation Route Planning Optimization
Fleet Management
 Absence of Scientific Demand Management Process
 Under/over estimations
 Target v/s Actual Sales
 Tracking Customer Service levels
 Difficult growth and revenue performance measurement

 Non-Synchronized Supply and Logistics Planning

 Fill Rate Management Challenge especially during Seasons
 Costly Product-Mix Decisions
 Capacity Under/Over Utilization
 Inter-Warehouse Movements
 Premium Freights at times
 FG Inventory mismatches with Norms
Its all about collaboration
 To develop a cross-departmental consensus business plan that is
achievable, given the business aspirations and constraints, and
ensures that every function and sub-function within the business is
working to achieve the same goal.

 Leading companies do this most effectively by involving as many

areas of the business as is practical.
 Sales
Forecast
Adjustment
Directors Executives

Demand
Baseline Operations Pre S&OP S&OP
Review
Forecasting Planning Meeting Meeting
Meeting

Sales
Forecast
Adjustment
Performance
Management

Operations
Sales Marketing S&OP
Forecasting Department
Department Department Manager
Team

Absence of teamwork
& shared risk
management among
internal functions
Supply interruption, Excessive in hand
leading to production inventories and
delays, on time delivery obsolescence
issues, lower profits and
/or customer loss
Lack of confidence
in planning system

Material / Product To
shortages increased manage
expediting $ Ineffective utilization
of resources, and / or
lack of resources when
needed
Unacceptable
lead time Ineffective bottleneck and Poor collaboration among
constraints management stake holders – internal or
on the supply side external (finger pointing

Poor coordination of
demand and supply: lost
sales: Incorrect Inventories:
Loss/ lower profitability
Lack or no technology/ Limitation of the
systems to do the “what
processes to manage new
if” modeling and gaining product development,
agreement
innovation and /or
feasibility

Breakdown in Internal business processes

communication due to the Challenges does not facilitate delivery of
lack of quality and right – product/price/ qty/
availability of data qlty, at the right time, to the
right customer

Leadership Lack of Lack of integration

Lack of right
support in getting coordination with the financial
metrics to drive
agreement on of multisite/ budgeting process
value or to
S&OP plans cultural teams
determine same
 Business or Operations
annual plan strategy

Sales and Operation Plan

Constraint
Forecasting Sales Operations Management
Plan Plan

Resource Planning (services) Resource Planning (manufacturing)

• Workforce schedule • Master production schedule
• Material and facility resources • Material requirements planning

Scheduling Scheduling
• Employee schedule • Employee & equipment schedules
• Facility schedules • Production order schedules
• Customer schedules • Purchase order schedules
 Review done as part Align all stakeholders towards
of an Integrated meeting customer demand/
Business profitability & ensure delivery
Management Process of the company’s strategic
agenda
Formalizes the
generation and
adoption of a company
demand plan through
the demand review

Clearly identifies the

product domain in
which the company
competes through
Reasons
Product Management Provides a transparent
view of the company’s
response from
demand through to
Delivers one clear plan
Ensures that the Supply & the supply review
that answers all the
Demand are reconciled &
customer demand
evaluated against financial
questions that the
targets in the
organization faces
management Review
Planning Cycle Planning Output

Sales
Annually Business Profit ROI
Plan

Monthly S&OP Product Group

Product Models
Weekly Master Scheduling & Options

Components
Daily Material & Service Planning
& workload
• Review Revenue/  What has changed since last month? • Orders booked
Profit Performance
 Are we on plan financially?
• Review new product  How are we performing to performance • Sales & shipment
development
metrics?
• Review • Backlogs
 What new risk do we need to consider?
manufacturing
performance  What decision do we need to made now?
• Finished goods
• Review Inventory  What decision need to be made in the near
Inventory
levels future?
• Production
• Review External  How are product families performing?
Factors  Are we on track with product • Performance
measures by
• Review Future plans development? product Group
 Do we have any critical constraints?
 Is there any need to revise long term plans?
 Current plan for each product group
 Current finished goods inventory
 Sales forecasts
 Purchase Orders received
 Materials available
 Manufacturing plans and capacity
 Distribution capacity
 Shipping capacity
 Performance measures
 Customer Service
 Forecast error reduction…………..20-25%
 Inventory reduction…………………..5-10%
 Inventory turn increase……………..5-10%
 Service Level Increase………………..5-10%
 Top line revenue growth……………2-5%
 SKU rationalization……………………10-20%
 Forecast Accuracy (%)
 Production Plan Adherence (%)
 Inventory – Days of Supply (DOS)
 Inventory Turns
 Financial forecast Accuracy
Benefits for Solution
Sales Team Demand forecasting and
management. Analysis of historical
data, applies multiple models, and
adds promotions and other causal
factors to come out with proper
demand forecast numbers.
Benefits
Increased forecast accuracy
Increased customer service
Right product mix planning in
distribution centers.
Better Customer Predictabilit
Understanding the promotional,
seasonality and other events
impacts
Management of Targets across
all geography, product structure
and sales hierarchy level
Benefits for Solution Benefits

Production Production Planning and Quick generation of robust and

Team Optimization
Arrive at the Demand driven
Production Plan that is
synchronized with Distribution Plan.
optimized rough cut production
plan considering all capacity
constraints, changeovers,
campaigns, seasonal pre builds
etc.

Increased capacity utilization

Increased productivity by better

resource planning and utilization

Optimized product-location mix

decisions to service effective
distribution

Quickly review and adjust master

plans to resolve any exceptions
Benefits for Solution
Supply Chain Optimized Distribution Plan
Team While balancing Demand-Supply
dynamics arrive at distribution and
dispatch plan that optimizes the
logistics costs and various service
level constraint.
Benefits
Most optimal distribution plan
Lower logistics service costs
Maintaining service levels and
dispatch priorities
Increased OTIF(on time in full)
and decreased Inventory
Improved overall fleet capacity
and overall asset utilization
Optimized product-location mix
dispatch decisions to service
effective distribution
Decreased costs of premium
freights, cross depot movements,
obsolesces, handling etc
Benefits for Solution
Management Exception Management
Provide end to end supply chain
performance visibility and levers to
control the plans by exceptions
Benefits
Enablement of Human
Independent Planning System
that provides the complete
visibility on company
performance against customer
demands with graphical and
enriched presentation
Smart workflow that spots the un-
tolerable exceptions within
existing plans and provides easy
and user-friendly resolution that
balances the conflicts and lead to
consensus plans
Provides KPI Measurements and
analysis views on various supply
chain performance aspects like
OTIF, Production Compliance,
Service Costs, Inventory Days,
Asset Utilization, PCR Accuracy
etc.
 Old Model: Push New Model: Pull
(Linear Supply Chain) (Integrated Networks)

• Supply-Centric  Demand-Driven
• Internally Focused  Global
Automation
• Vertically Integrated  Virtual Supply Chains
Information
• Physical Asset Based  Decision Based
• Mass Momentum  Lean Practices
 Supply

Demand Supply Pre-S&OP Executive

Planning Planning Meeting Meeting

• Access last period • Access SC Capabilities • Identify gaps • Review

Demand
• Incorporate sales against Forecast • Gap conflict resolution recommendations &
and customer inputs • Develop feasible supply • Recommendations and make decisions
• Build new baseline Plan Agenda for executive • Resolve remaining
demand plan • Develop P&L meeting issues
projections • Review KPI’s
• compare projections • Review PLM plans
against targets • Issue consensus plan

End of Month Week 1 Week 2 Week 3 Week 4

 S&OP process- M0/M01
Mid month Only info given, discussion
review process only if needed
Area Position / Dept 1st – 8th 9th to 15th 16th to 23rd 24th to End
BU DP Analyze
Collate Discuss Discuss, forecast for
forecast with BUM if exceptions,
and send and send needed
BU SCM discuss with
to BU-M to MU DPs
BU-M if needed

National S&OP
BU Supply PoC I2 RCCP
Planning meeting run

Inputs to Discuss,
BU BU Marketing statistical if
Mrktng / (BMs, ABMs) forecast Clarify, if needed
BU - needed
BU Sales
OTSales

MU DP Check current
month sales vs
forecast, discuss with
Ums, revise for the
P3/P4

Generate Discuss with Send Discuss Send final

Send for
statistical MUMMs / latest forecast forecast to
MUGM’s
forecast MDMs, clarify foreca received all,
approval
with BU-M and st to from TDMs generate
BU-S, if needed TDMs with UMs Demand /
MU RCCP in i2
Supply
MU SCM review and MU
approval pre-
Plants / MRP S&OP
plan and
operations S&OP
MUMMs / MDMs Discuss
forecast Analyze
forecast
MUGM Approve
forecast

Discuss
UMs forecast
Discuss,
Units TDMs / BDMs
if Validate
needed forecast, give
inputs
Page 33
 No longer Victim mentality, use visibility as strategic
weapon.
 Integrated Supply Chain (ISC) cutting across traditional job
description, Data sharing within company and breaking of
silos.
 Centralized MIS, Collaborative S&OP process, one version of
truth.
 Incorporate inputs from all aspects of supply chain including
finance, sales, marketing, purchasing, forecasting and
supplier management.
 Harmonize incentives and avoid independent incentives.
 Can result in reduction of inventory/ obsolete inventory,
backlogs, expedited shipments and improved forecast
accuracy.
 More control on product life cycle.
 Process instrumentation