page 1
page 2
page 3
page 4
page 5
page 6
page 7
page 8
page 9
page 10
page 11
page 12
page 13
page 14
page 15
page 16
page 17
page 18
page 19
page 20
page 21
page 22
page 23
page 24
page 25
page 26
page 27
page 28
page 29
page 30
page 31
page 32
page 33
page 34
page 35
page 36
page 37
page 38
page 39
page 40
page 41
page 42
page 43
page 44
page 45
page 46
page 47
page 48
page 49
page 50
page 51
page 52
page 53
page 54
page 55
page 56
page 57
page 58
page 59
page 60
page 61
page 62
page 63
page 64
page 65
page 66
page 67
page 68
page 69
page 70
page 71
page 72
page 73
page 74
page 75
page 76
page 77
page 78
page 79
page 80
page 81
page 82
page 83
page 84
page 85
page 86
page 87
page 88
page 89
page 90
page 91
page 92
page 93
page 94
page 95
page 96
page 97
page 98
page 99
page 100

8 Businessexcellence October 07 This series of articles has already addressed the first two steps of the S&OP process (see figure 1), the product development and the demand review meetings. The output of the product development meeting is the future direction of the product portfolio, and the output of the demand review meeting is a timely aggregate unconstrained demand plan for both existing and new products which then becomes the basis for the integrated set of planning numbers used throughout the sales and operations planning process. There are four constituent groups that participate in the supply review stage. The first is manufacturing Integrated business management is a means of managing all of the business resources via the sales and operations planning (S&OP) process. In part four of a six part series, John Schorr describes the supply review process which determines the supply capability to meet the demand Thesupplyreview and production, which answers the question, “does the company have enough capacity to produce the required supply plan?” Next is the purchasing activity, which determines, “do the company’s suppliers have enough capacity to support the plan?” If the company plans to expand at a 30 percent rate,

October 07 Businessexcellence 9 for example, and the supplier can only advance at a 15 percent rate, the company’s growth rate will be limited to only 15 percent. Logistics and distribution department representatives are also involved, who ask, “can we get enough trucks to move the product and do we have enough space to house the finished goods inventory?” The fourth constituent is the engineering and design group, which needs to know, “do we have enough support capacity to design the required changes to the product in an engineer-to-order business?” During the supply review there are three supply chain tensions that need to be recognized and managed. Specifically, the supply organization has to maximize customer service, minimize inventory, and minimize operating costs. For success, a company must manage these three tensions simultaneously. However, in many companies, balancing these three elements is very difficult. The math of supply planning is fairly easy; however, developing the numbers can be very difficult. As an example, in a make-to-stock company, the production plan equals the sales plan plus the ending finished goods inventory minus the beginning inventory: Production plan = sales plan Strategicmanagement