1、Master Planning of Resources,Session 5 The Sales and Operations Planning Process,5-2,Master Planning of Resources,Session 1: The Business Planning Process Session 2: Forecasting Demand Session 3: Demand Management and Customer Service Session 4: Distribution Planning Session 5: The Sales and Operati
2、ons Planning Process Session 6: The Master Scheduling Process Session 7: Managing the Master Scheduling Process Session 8: Measuring Performance and Validating the Plan,5-3,Sales and Operations Planning,Business planning,Sales and Operations planning,Master Scheduling,Resource planning,5-4,Session 5
3、 Objectives,Describe the sales and operations planning process and its relationship within master planning of resources Explain the role of volume and mix in the sales and operations planning process Describe the steps in the sales and operations planning process Distinguish between the terms sales
4、and operations planning and production plan Identify the participants and the decision-makers in the sales and operations planning process Describe the inputs and outputs of the sales and operations planning process Identify and describe production strategies used in sales and operations planning Id
5、entify and briefly describe the steps in the resource planning process,5-5,Sales and Operations Planning Relationships,Master Scheduling,Detailed Scheduling & Planning,Business Planning,Production Plan,Source: Adapted from Wallace, Tom F. Sales and Operations Planning, A How-To Guide, T.F. Wallace &
6、 Co. 1999.,Sales & Operations Planning,F O R E C A S T I N G& D E M A N D,MANAGEMENT,CAPA-CITY,M A N A G E M E N T,RESOURCE PLANNING,5-6,Organizations with Separate Plans,Financial Plan,Business Plan,Production Plan,Backlog Plan,Marketing Plan,Sales Plan,Human Resource Plan,Inventory Plan,Engineerin
7、g Plan,5-7,An Integrated Companywide Plan,Sales and Operations Planning,5-8,The Balancing Act,Demand,Supply,Demand Forecasts,Actual Orders,Production Orders,Purchase Orders,5-9,Source: Wallace, Tom F. Sales and Operations Planning, A How-To Guide, T.F. Wallace & Co. 1999.,Product Volume and Mix,Volu
8、me The big picture How much? Rates Product families Planned within sales and operations planning,Mix The details Which ones? Orders Individual products Planned within master scheduling,5-10,Source: Wallace, Tom F. Sales and Operations Planning, A How-To Guide, T.F. Wallace & Co. 1999.,Sales and Oper
9、ations Planning (S&OP),Is a business process Keeps demand and supply in balance Is performed at the aggregate level Focuses on product volume, not mix Occurs on a monthly cycle Displays information in product units and financial numbers,5-11,The Monthly S&OP Process,Run sales forecast reports,Demand
10、 planning,Supply planning,Pre S&OP meeting,Executive S&OP Meeting,1,2,3,4,5,Statistical forecasts Field sales worksheets,Management forecasts First pass spreadsheets,Capacity constraints Second pass spreadsheets,Recommendations and Agenda for exec. S&OP,Single companywide plan,5-12,1. Run Sales Fore
11、cast Reports,Gather last months data Gather information for sales and marketing for new forecast Share information with appropriate people,Source: Wallace, Tom F. Sales and Operations Planning, A How-To Guide, T.F. Wallace & Co. 1999.,5-13,2. Demand Planning Phase,Sales and marketing staff review St
12、ep 1 information Generate a new or updated existing forecast Forecast includes product families Forecast includes any product life-cycle changes for the time frame covered by planning horizon,Source: Wallace, Tom F. Sales and Operations Planning, A How-To Guide, T.F. Wallace & Co. 1999.,5-14,3. Supp
13、ly Planning Phase,Operations staff review Step 2 information Review current operations plans for possible change If changes, then operations plans should be revised Validate revised operations plans using resource planning,Source: Wallace, Tom F. Sales and Operations Planning, A How-To Guide, T.F. W
14、allace & Co. 1999.,5-15,Source: Wallace, Tom F. Sales and Operations Planning, A How-To Guide, T.F. Wallace & Co. 1999.,4. Pre-S&OP Meeting,Objectives Make decisions regarding balancing supply and demand Resolve problems and differencesone set of recommendations Identify areas where agreement cannot
15、 be reached and propose alternative plans Develop scenarios for alternative plans to solve problems,5-16,4. Pre-S&OP Meeting (cont.),Representatives include: Sales and marketing Product development Finance Operations Product manager Family-by-family review Check for resource constraints Review actua
16、l vs planned performance Review inventory/backlog plans,Source: Wallace, Tom F. Sales and Operations Planning, A How-To Guide, T.F. Wallace & Co. 1999.,5-17,4. Pre-S&OP Meeting (cont.),Output includes: Updated financial plan Recommended action for each product family New product introduction plans R
17、ecommendations for changes in resources Areas of disagreement with alternative plans and impact statements Recommended changes to demand and supply strategies Agenda for executive S&OP meeting,Source: Wallace, Tom F. Sales and Operations Planning, A How-To Guide, T.F. Wallace & Co. 1999.,5-18,5. Exe
18、cutive S&OP Meeting,Objectives: Make decisions on each product family, accept Pre-S&OP team recommendations or alternatives Authorize production or procurement changes Compare production plans to business plan and make required adjustments Make decisions where no agreement on Pre-S&OP team Review bu
19、siness key performance indicators where performance was less than planned,Source: Wallace, Tom F. Sales and Operations Planning, A How-To Guide, T.F. Wallace & Co. 1999.,5-19,5. Executive S&OP Meeting (cont.),Output: Meeting minutes Summary of decisions made Summarized action plan with due dates and
20、 responsibilities Authorized company game plan Complete production plan for each product family,Source: Wallace, Tom F. Sales and Operations Planning, A How-To Guide, T.F. Wallace & Co. 1999.,5-20,Benefits of S&OP,Sales and Operations Planning provides: More effective use of ERP systems Operational
21、plans consistent with the business plan A tool for managing a dynamic business on a regular basis Ability to establish targets and measure performance A formal process to set targets and measure progress toward improved performance Increased teamwork and collaborative skills,5-21,S&OP Considerations
22、,Product families Units of measure Planning horizon Data element responsibility Planning process Participation at meetings Information needed for meetings Meeting management Resource validation Performance measurement Approval process Who will approve the production plan,5-22,Who Brings What to the
23、Table?,Marketing,Product Development,Product Demand,Capital,MPS and Supplier Constraints,Business Plan,Workforce Availability,Source: Launchbury, Keith J. Principles of Planning Omeric, 1999.,Finance,Materials,Operations,Human Resources,Engineering,Management,Capacity,5-23,Product Families,Represent
24、 how the product or service is presented to the market Logical groupings based on similar sales and manufacturing requirements Should be meaningful in terms of volume of sales generated Ideally should be no more than 6-12 product families per business unit,Source: Wallace, Tom F. Sales and Operation
25、s Planning, A How-To Guide, T.F. Wallace & Co. 1999.,5-24,Product/Service Hierarchy,Stock Keeping Unit (SKU),Package Size,Model / Brand,Product Subfamily,Product Family,Business Unit,Total Company,Source: Wallace, Tom F. Sales and Operations Planning, A How-To Guide, T.F. Wallace & Co. 1999.,5-25,In
26、puts to S&OP,Input Responsibility Projected demand Marketing Market intelligence Marketing Actual sales Sales Capacity information Manufacturing Management targets Management Financial requirements Finance New product information R&D New process information Process engineering Workforce availability
27、 Human resources,5-26,S&OP Outputs,Output Sales plan Production plan Inventory plan Backlog plan Financial plan Product & process development plan Workforce plan,Responsibility Marketing and sales Manufacturing Materials management Customer service Finance Engineering Human resources,5-27,Level Sche
28、dule Strategy,5-28,Chase Strategy,Produce only what you sell Produce products or service just-in-time If there are no salesdo not produce,5-29,Chase Strategy,5-30,Combination/Hybrid Strategy,A balance between level and chase Could be a mixture of both approaches For example, a producer of ice cream
29、has two production levels, one shift per day during the slow season, two shifts per day during the busy season,5-31,Combination/Hybrid Strategy,5-32,Make-to-Stock and Make-to-Order,MTS Sales forecasts are entered for make-to-stock products Differences between supply and demand result in changes in i
30、nventory level MTO Customer orders are entered for make-to-order products Differences between supply and demand result in changes in backlog level,5-33,MTS S&OP Grid,5-34,MTS S&OP ExerciseSolution,Setting Inventory Target Levels,Management can set inventory targets by product family in the sales and
31、 operations planning process such as: Maximum inventory Minimum inventory Inventory turns Days of coverage,5-35,5-36,MTO S&OP Example,5-37,Source: Cox, James F. III, Ph.D. and John H. Blackstone Jr., APICS Dictionary, Ninth Edition (1998).,Backlog versus Backorder,Backlog is all customer orders rece
32、ived but not yet shipped Backorder is a past due customer order or commitment Backlog includes backorders Many companies confuse the two terms Backlog has a future delivery date A backorder must be replanned,5-38,Setting Backlog Target Levels,Management can set target backlog levels by product famil
33、y in the sales and operations planning process, such as: maximum backlog minimum backlog planned order times maximum customer waiting time,5-39,Anything that adds value to a product or service in its creation, production, or delivery,What Is a Resource?,5-40,Resource Planning,The process of establis
34、hing, measuring, and adjusting levels of long-range capacity Based on the production plan Addresses those resources that take long periods of time to acquire, or are costly or difficult to add Requires top management approval,5-41,The Resource Planning Process,Develop bills of resources,Decide on un
35、its of measure,Determine planned capacity,Calculate the load on each resource,1,2,3,4,5,Production Plan,6,Compare to planned capacity,Take action where necessary,5-42,Bill of Resources,Resource Planning Exercise,5-43,Resource Planning ExerciseSolution,5-44,5-45,Units of Measure,The unit of measure s
36、hould be defined in terms of common use of capacity. Some typical examples are Each Pair Cases Thousands Reels Gallons Feet Kilograms,5-46,Planned Changes in Resources,Acquisitions Facility startup/shutdown Hiring, layoffs, shift changes Adding/removing tooling and equipment maintenance Outsourcing/
37、subcontracting,Session 5 Review,5-47,Describe the sales and operations planning process and its relationship within master planning of resources Explain the role of volume and mix in the sales and operations planning process Describe the steps in the sales and operations planning process Distinguish
38、 between the terms sales and operations planning and production plan Identify the participants and the decision-makers in the sales and operations planning process Describe the inputs and outputs of the sales and operations planning process Identify and describe production strategies used in sales and operations planning Identify and briefly describe the steps in the resource planning process,
