\u201cS&OP helps integrate a company's strategic and tactical analysis, making it a very useful tool for ensuring operational efficiency,\u201d highlights Guilherme Barbassa, director at Stratec.<\/p>\n
Figure 1: The 5 Steps of S&OP<\/p>\n
Learn the S&OP steps, below:<\/p>\n
1st step: Portfolio Management<\/h3>\n
At this time, the company holds the first formal meeting in the monthly S&OP process cycle, Portfolio Management, conducting a review of: its product portfolio, including the introduction of new products; improvements, repositioning, and discontinuation of existing products; products that are not selling as projected; and other new activities that may affect demand, supply, or financial results. As a result, the company obtains an updated and agreed-upon plan for the launch of new products & supporting initiatives, the resources necessary for their implementation, the list of related critical issues, the assumptions considered, the risks involved and the factors influencing them, the recommendations and decisions made by the team in the forum in question, and those that require escalation for decision by Senior Management.<\/p>\n
2nd step: Demand Management<\/h3>\n
At this stage, armed with the results obtained from Portfolio Management, sales history and statistical models, and managerial information: the customer's perspective provided by Sales & Trade Marketing; the consumer's perspective provided by Marketing; and the business perspective provided by Senior Management, the department responsible for demand forecasting prepares the proposal for the future demand forecast, without restrictions.
\nWith the proposed demand forecast, the premises considered in its development, and the gaps identified to deliver the results of the Business Plan \u2013 \u201cbudget\u201d and the Strategic Plan, the company holds the second formal meeting in the S&OP process cycle, Demand Management, where key areas working collaboratively reach a consensus and formalize the demand plan, i.e., what the company intends to sell and deliver in each period, which is published and communicated to the company.<\/p>\n
Step 3 - Operations Management<\/h3>\n
At this stage, based on the unrestricted demand plan, it is necessary to estimate whether the company will have the required resources to meet the projected demand, for example:<\/p>\n
- \n
- the purchase of supplies, raw materials, components, packaging materials, etc.;<\/li>\n
- The analysis of the availability of equipment, production lines, labor, and space for producing, storing, moving, transporting, and making products available.<\/li>\n<\/ul>\n
It is therefore time to check if it will be necessary to: buy or import any raw materials or packaging outside of normal delivery times; work overtime or hire additional labor to establish a new work shift; seek incremental capacity internally or through outsourcing, etc. \u201cThese things don't happen\novernight, which is why they need to be well-planned and with sufficient advance notice to minimize risks,\u201d warns Barreto.
\nIn addition, inventory levels are designed in accordance with the company's stock policies.
\nThe director of Crimson&Co warns that: \u201cAt this stage, restrictions may appear, such as: limited supplier capacity; unavailability of resources: materials, financial, human; etc. Therefore, the company must always develop several scenarios with alternative supply plans to meet its demand plan. However, always exploring the financial and operational impacts and associated risks, providing the recommended initiative, based on the company's objectives and facilitating its decision-making process.\u201d.<\/p>\n4th step: Reconciliation<\/h3>\n
The Reconciliation Meeting is held with the presence of the company's senior management and aims to resolve the imbalance between demand and supply plans, and between the risks and opportunities resulting from previous steps. This stage involves financial scenario planning when necessary, which must always be compared with the company's strategic objectives and global business goals. In summary, we can state that the results obtained in the previous three steps allow the senior group to:<\/p>\n
![\"Strategic](\"https:\/\/actiosoftware.com\/wp-content\/uploads\/2018\/11\/bot-solicite-pt.png\")
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