Demand Management 

So far, we have described two similar SOP support systems. Both should utilize time series demand and supply data stored in a relational database. Both should provide customizable reports, graphs and even spreadsheet-style displays and editing. The main decision-support system should also provide MPS and Finite Capacity Planning functionality to allow quick analysis of alter­nate plans and tradeoff opportunities.

We have also alluded to several other important system features. The systems must support analysis at the aggregate, product group or family level of detail, but also must allow inquiry at the MPS level as needed. If possible, the system should support easy translation between Sales and Marketing product groups and families and those used by Manufacturing. The system should provide flexible period handling so that the same base data can be evaluated in any combination of weeks, months, quarters, or rolling calendars. The system must also shift easily from units to dollars (or other currencies) and provide output in color graphics as well as standard numerical format.

Finally, our SOP systems must not force us to overcomplicate or oversimplify the business as we see it. A company may wish to start the SOP process with a high degree of product aggregation and a small number of constraining resources. Over time, how­ever, the participants will want to continuously improve the SOP process, notching up the level of detail and accuracy as they go.

The Sales and Operations Planning process is now widely recog­nized as a valuable way for manufacturers to keep their Sales, Manufacturing and Finance teams working on the same mission. Certain benefits are derived simply by bringing the parties together to talk on a regular basis. However, in the face of growing competition and slimmer operating margins, we must now empower the participants to make the best possible decisions. That means bringing the right data and tools into the meeting itself.

The SOP meeting embodies two main processes: 1. Reviewing recent performance against plan.

          1. Reviewing recent performance against plan.

2. Evaluating alternate plans and choosing the new course of action.

To get better results out of these processes, the fixed format reports and spreadsheets commonly used today should be replaced by flexible interactive Demand Management and Finite Capacity-based MPS systems running on powerful notebook computers. By bringing the right data and tools into the SOP meeting, participants can answer more questions on the spot and make their evaluations based on real data. Gradually, as gut feel and lung power give way to data-based decision-making, the net result will be better production plans. The necessary software tools and supporting PC hardware are readily available in the marketplace today.

Lean Six Sigma Training   Thinking Out of the Box   
Balanced Scorecards  Strategic Tactical Planning  
Supply Chain Inventory Management  Total Quality Management Principles
Lean Manufacturing Implementation  Lean Manufacturing Principles