Improving business and operations planning
What’s the bottom line for
improving S&OP?
A fresh approach to S&OP can position your company to take advantage of an ever-shifting landscape.
By making supply chain operations a fundamental driver of broader business strategy, COOs can achieve the following performance improvements:
- Lower supply chain costs. Savings can come from improved capacity use and reduced downtime, optimized inventory and services levels, and as much as a 30% decrease in days of supply.
- Data standardization. This is one of the most critical challenges in implementing an effective S&OP process, and a more inclusive approach will resolve this issue effectively.
- Cross-functional collaboration. Better communication and cohesion across functions reduces redundancies and rework, aligns metrics and results in faster time-to-market.
- Improved responsiveness. Companies will be able to react more quickly to changes in customer demand.
- Better customer service. Companies can achieve up to a 10% increase in order fill rates and improved product availability, resulting in faster time-to-market and happier customers.
- Enhanced efficiency. Companies will spend less time firefighting and more time on forecasting accuracy, reducing volatility in the supply chain.
- Higher revenue. Higher product availability can increase sales.
- Employee satisfaction. Teams will have clearly defined roles and responsibilities, and they will be more accountable, with rewards tied to key metrics.
An integrated approach to S&OP planning depends on five key activities to achieve success:
- Executive support. Sales and marketing organizations often struggle with new processes, requirements and accountabilities. Senior management must visibly support and enforce expectations.
- Performance measurement dashboard. To support formal and measurable processes, companies need accountability and exception-based decision-making, as well as a clear and concise view of relevant, actionable targets and performance.
- The right balance between centralization and decentralization. Most activities related to integrated business and operations planning should be centralized. However, companies should consider tactical planning at the location or region/market level.
- High-quality team members. Project resources need to have the right skills for their area. They also need to be able to serve as change agents who can help build consensus and lead new processes.
- Mastering of master data. Decision-support tools rely on ERP or other transaction systems for data. Ignoring or underestimating poor data can result in project delays, lost value propositions and inaccurate results.
By taking a fresh approach and raising the level of traditional S&OP to a strategic and more inclusive integrated business and operations planning approach, life sciences companies can position themselves to take advantage of an ever-shifting and intensely competitive landscape.
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- Arvin Goldberg
Executive Director
Advisory Services
+1 703 747 1429
- Bradley Newman
Partner — Americas Advisory
Supply Chain & Operations
+1 312 879 4083
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