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Episode Info: You can call the Sales and Operations Planning Process as the backbone of supply chain execution. It is about getting everybody on the same page in regards to future market demand. It is about generating the “one number” which synchronizes all necessary activities to guarantee future shipments to the customers. It is a simple but powerful process – five steps are sufficient to align Sales, Marketing, Supply Chain, Production and even Finance. After successfully closing the process Marketing and Sales can setup a strategy how to penetrate the market without overcommitting, Supply Chain can start communicating to the suppliers and could prepare the shipping capacities and production is able to adjust production capacity to be able to process the supplies ordered by Supply Chain Management. Even Finance can develop plans how to finance a ramping scenario and can analyze if the agreed shipping volumes fit to the revenue numbers communicated to the shareholders. Planning review as THE synchronization point On a regular basis, normally on a monthly frequency the planning review meeting takes place. All big guys of the company get together and decide upon constraint volumes and required actions to secure capacity and supply. If this meeting is properly prepared it could be quite smooth but if demand and supply differs significantly, if Sales and Marketing want to go for risk orders to achieve revenue targets, if Supply Chain Management has issues to secure required material supply or if production is not able to cope with the flexibility requirements it could be a tough and lengthy meeting. But it is worthwhile! One number planning The meeting will be closed no sooner than all parties agree to one single constraint number; the one and single number which is reference to all adjacent activities. It is the number which decides upon success or failure of the entire company. It is the number which was decided by all key players in the company! So join the journey through the fascinating process of Sales and Operations Planning! Read this weeks article here. When you prefer reading over listening, please download the transcription. (Coming Soon)
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