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Sales and Operations planning in Polish manufacturing companies
Sales & Operations Planning
AUTOR: PhD Eng. Michał ADAMCZAK AUTOR: PhD Eng. Michal ADAMCZAK
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PLANING PROCESSES STRUCTURE Organization goals Strategic horizon Strategic plan Resources planning Sales and Operations Planningi SOP Tactical horizon
Financial plan
Sales plan
Production plan
Supply plan
Repair plan
Technical plan
Forecasts
Orders
Operational horizon
Planning and control of supply
Master Production Schedule
Rought resource planning
Material Resources Planning
Resource planning
Distribution
Shop floor control
Sales & Operations Planning AUTOR: PhD Eng. Michal ADAMCZAK
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SOP DEFINITION
SOP is „a process to develop tactical plans that provide management the ability to strategically direct its businesses to achive competitive advantage on a continuous basis by integrating customer focused marketing plans for a new and existing products with the management of supply chain. The process bring together all the plans for the bussiness (sales, marketing, development, manufacturing, sourcing, and financial) into one integrated set of plans. It is performed at least once a month and is reviewed by management at an aggregate (product family) level. The process must reconcile all supply, demand, and new product plans at both the detail and aggregate levels and tie to business plan. It is definitive statement of the company’s plans for the near to intermediate term, covering a horizon sufficient to plan for resources and to support the annual business planning process. Executed properly, the sales and operations planning process links the strategic plans for the business with its execution and reviews performance measurements for continuous improvement”.
Sales & Operations Planning AUTOR: PhD Eng. Michal ADAMCZAK
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SOP DEFINITION
Muzumdar & Fontanella define SOP as: „a set of business and technological processes allowing the company to match market demand to production and supply capacity in the most effective manner”
Sales & Operations Planning AUTOR: PhD Eng. Michal ADAMCZAK
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SOP role in supply chain
According to Affonso, Marcotte & Grabot (Affonso et al. 2008, p.139) a SOP plan is of huge significance for the coordination and integration of planning processes in companies, because it brings together many functional areas.
SOP in the Supply Chain Company 3
Purchase Sales
Company 2
Purchase Sales
Company 1
Sales & Operations Planning AUTOR: PhD Eng. Michal ADAMCZAK
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SOP AS AN INTEGRATED PLANNING
1. Sales Revenue Planning
New Product Planning Sales opportunity Planning Revenue, Margin and profitability Planning Alligment to Corporate Goals
5. Management Review
2. Demand Planning
KPI Measurement Working CapitalGross Margin Inventory Turns Plan vs. Actual Forecast error Root Cause Analysis
4. Supply/Demand Balancing
Product Mix Constraint management What-if Analysis Allocation of Demand to Supply Consensus
Demand Forecasting Demand Collaboration (sales, marketing, operations input) Demand Shaping (promotions, other events new product introduction) Consensus Forecasting
3. Supply planning
Capacity Plannig (Labour leveling, resource Planning) Inventory Optimization Material Planning Transportation
Sales & Operations Planning AUTOR: PhD Eng. Michal ADAMCZAK
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SOP AS AN INTEGRATED PLANNING
The objectives of SOP are as follows (Gray, 2007, p. 23): institutionalizes management decision-making and communication, especially in the areas related to customer demand and manufacturing volumes; balances demand and supply in a way that meets the needs of the customer; shock absorbers when supply and demand are not equal; integrates financial and operating plans; links strategic plans with detailed plans and schedules; regulates all detailed master schedules and sales plans; provides "long range vision" to other more short sighted processes, especially to resolve potential long-range capacity, material and financial issues.
Sales & Operations Planning AUTOR: PhD Eng. Michal ADAMCZAK
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SOP AS AN INTEGRATED PLANNING
Stahl (Stahl, 2010, pp.35-37) distinguishes five main stages of the creation of the plan SOP: Step 1 - data collection - is of particular importance for the creation of the plan and its quality. Often companies data are collected in a non-institutionalized for at their meeting the needs of SOP is difficult. The data should be organized in a way that the possibility of making on the basis of the decision which in turn requires them to current and complete; Step 2 - demand forecasting - creating a sales plan for the next months based on the collected historical data and information from customers; Step 3 - Planning material flow - taking into account production planning, procurement, inventory held, outsourcing and resources needed to implement movement;
Sales & Operations Planning AUTOR: PhD Eng. Michal ADAMCZAK
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SOP AS AN INTEGRATED PLANNING Step 4 - working meeting - at which managers tactical level from different departments of the company they work out solutions and recommendations for the management of the enterprise; major decisions relate to: determine the best option sales plan including production plans and supplies, repairs, transfer of part of the tasks in outsourcing, to build a financial plan for the company, establish a plan meetings with the management company; Stage 5 - a meeting of top management company - the culmination of the development plan SOP. At this stage involves the chief managers of each area (a male by SOP) and the management of the company. At the meeting, managers will learn the management of the current state of the company and present the solutions developed. The task of the board is to select the best in their opinion and approval of a plan for implementation.
Sales & Operations Planning AUTOR: PhD Eng. Michal ADAMCZAK
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SOP AS AN INTEGRATED PLANNING
In the process of creating a plan SOP opinion L. Lapide (Lapide, 2007, p.21) should be involved interdisciplinary team, which would include experts from the areas of: production planning and logistics - responsible for planning the production of the numbers of sales forecasts, balancing tasks of available resources and to provide information about faults or resource reserves; supply chain - to coordinate and synchronize all plans ranging from the supply of production materials, services, energy, and distribution of products to the final customer; marketing - decisive for the introduction of new products on the market, determining future prices, market research, customer needs, creating products to meet the needs of buyers; sales - creating sales plans, delegating tasks sales; finance - making all the plans in the form of monetary compilation of actual financial results planned. Sales & Operations Planning AUTOR: PhD Eng. Michal ADAMCZAK
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SOP - RESULTS OF SURVEY IN POLAND 100%
90%
80%
70%
60% MTS 50%
MTO ETO
40%
QR
30%
20%
10%
0% Plan finansowy
Financial plan
Plan zasobów
Resource plan
Plan sprzedaży Plan produkcji Sales plan
Sales plan
Plan Supply zaopatrzenia plan
Plan marketingu
Marketing plan
Plan badań i R&D rozwoju
plan
Plan inwestycji PlanRepair remontów Investmests plan plan
Inne
Others
Sales & Operations Planning AUTOR: PhD Eng. Michal ADAMCZAK
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SOP - RESULTS OF SURVEY IN POLAND 80%
70%
60%
50%
40%
MTS
30%
MTO
ETO
20%
QR 10%
0%
Plany są opracowywane Plan ustalonych developing według procedur
according to procedures
Plany uwzględniają Planeswynikające take into ograniczenia z innych planów account
constraint from others plans
Plany są do siebie Plans are dopasowane
corelated with each other
Plany są wspomagane przez
Planning niezależneproces programy komputerowe developed with IT solutions
Plany są wspomagane przez Uwzględniają partnerów Planning proces Planning take into oprogramowanie klasy ERP biznesowych łańcuchu dostaw
developed with ERP system
Żadne z powyższych
Others
account another business partners
Sales & Operations Planning AUTOR: PhD Eng. Michal ADAMCZAK
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SOP – CASE STUDY
Sales & Operations Planning AUTOR: PhD Eng. Michal ADAMCZAK
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SOP – CASE STUDY
400 350 300 Sales plan Plan sprzedaży
250
Production plan Plan produkcji
200
Resource plan Dostępne moce
150
Season stock Zapas sezonowy
100 50 0 1
2
3
4
5
6
7
8
9
10
11
12
Sales & Operations Planning AUTOR: PhD Eng. Michal ADAMCZAK
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SOP – CASE STUDY
400 350 300 250
Sales plan Plan sprzedaży
200 Production Sumaryczny planprodukcji plan Dostępne moce Resource nominalne plan
150 100 50 0 1
2
3
4
5
6
7
8
9
10
11
12
Sales & Operations Planning AUTOR: PhD Eng. Michal ADAMCZAK
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SOP – CASE STUDY
Sales & Operations Planning AUTOR: PhD Eng. Michal ADAMCZAK
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61-755 POZNAŃ UL. E. ESTKOWSKIEGO 6 Rektorat tel. 61 850 47 81 Dziekanat tel. 61 850 47 64 Księgowość tel. 61 850 47 79 Kadry tel. 61 850 47 71 fax 61 850 47 89
[email protected] www.wsl.com.pl
DZIĘKUJEMY Sales & Operations Planning ZA UWAGĘ AUTOR: PhD Eng. Michal ADAMCZAK
