Real Time Sales and Operations Planning

Published by RoadMap Technologies on May 21, 2012May 21, 2012

Sales and operations planning (S&OP) is a continuous process in most companies.  In many cases, hundreds of executives and sales professionals collaborate on a business plan. It is then up to operations and manufacturing to deliver the goods on time.  The design of the S&OP business process is critical and typically requires many enabling technologies:

1) Competitive Intelligence

Poor competitive intelligence is typically the root cause of most forecasting shortfalls.  The business world just never seems to stay in place long enough to make complete sense.  In industries such as consumer electronics, markets remain in a constant state of  flux and often appear chaotic.  Although perfect information about competitors is impossible to acquire, a sales and operations planning system without any means to search, collect and share competitive intelligence among planners is similar to flying blind.

2) Real Time Mobile Alerts

Smartphones and tablet computers have largely eliminated the need for most business executives to carry a laptop around.  The upside to this trend is that they can be reached during any waking hour via these mobile devices, which roughly doubles the amount of time that they were previously available.  The downside is that critical alerts have to be sent to them in real time, rather than expecting them to log into the corporate system and pull the information themselves. To avoid information overload, this means that alerts have to be classified.  For example, if the forecast changes for a major new product or for one of the Top 10 products at your largest customer, that alert is probably worth sending to an executive’s iPhone at her son’s Little League game at 7PM on a Friday night.

Non critical alerts are still important, but can be left for sales and operations to process on a weekly or daily basis:

• Forecasts Tracking Above Recent Sales History
• Missing Prices
• Large Changes from Previous Forecast Versions
• New Products without Forecasts
• Discontinued Products with Forecasts

3) Forecasting Metrics with Industry Benchmarks

“Out last annual forecast was 97.5% accurate.  Is that good?”

Well, if your last annual forecast was made in October, after nine months of actual data, then forecast accuracy for the 4th quarter was probably only around 90%.  Now in the fast moving consumer goods industry (FMCG) or pharmaceuticals, 90% is an unacceptable level of accuracy. In consumer electronics, it might be acceptable, depending on where your product were in the product life cycle.

Forecasting metrics must be linked to the supply chain requirements and financial cost structure of the business. We have developed forecasting metrics that take into account each product’s lead time and gross margin, so that improved performance against that metric always shows up in the company’s bottom line.  In addition, in many industries such as pharmaceuticals we have enough information on forecast accuracy by industry peers to be ale to assess and classify a company’s the sales and operations process as one of Needs Improvement, Performance in Line with Peers, or Industry Leader.

Summary

RoadMap Global Planning Solution was designed by Brand and Product Managers at leading pharmaceutical, FMCG and electronics manufacturers.  It began as a way to automate and consolidate the best Excel spreadsheet formats in each department.   With each version, RoadMap incorporate the computing and communications technology that Brand and Product Managers use in everyday business to ensure that sales and operations process is accurate and that it runs smoothly.