One reason why the S&OP software category is doing well these days is that the companies that have the core components (like demand planning, supply chain planning [SCP], transportation management systems [TMS], etc.) are looking for the next level of automation, and an S&OP overlay or composite application provide this. Also from a business standpoint, there is a great appeal to the “balancing supply and demand for profitability” message, especially in times of recession (i.e., reduced demand and scarce cash). In other words, sharing a common plan (and being on the same page) means that the sales folks can no longer (with impunity) be selling without regard to the production plant’s ability to deliver, while the production counterparts can no longer ignore market demand in their production planning processes.
Even more, today there is a move away from S&OP being merely a collaborative SCP process designed to drive more accurate demand forecasts and align demand with production capabilities to ensure timely fulfillment of customer orders. Namely, as companies face increased global competition and supply chain challenges, along with rising transportation costs and volatile economic and market conditions, many industry-leading manufacturers–as well as consumer packaged goods (CPG) distributors and their retailing partners–have been working towards elevating their S&OP processes to an enterprise-wide global scale.
These trading partners are striving for this scale in order to enhance supply chain visibility, reduce costs, and achieve more integrated business planning and management. As a result, businesses of all types and sizes are now discovering how this next generation of S&OP approach and enabling tools can actually become mission-critical elements of an integrated business planning (IBP) strategy, as introduced in Part 1. Some of the primary business drivers for IBP include the following:
* significant organizational pressure to improve corporate performance
* the need for a more formal process and tool-sets to grow business
* drastic shifts in consumer buying patterns driven by the economic downturn
* large cost reduction initiatives including a desire to reduce inventory and working capital.
Even more, today there is a move away from S&OP being merely a collaborative SCP process designed to drive more accurate demand forecasts and align demand with production capabilities to ensure timely fulfillment of customer orders. Namely, as companies face increased global competition and supply chain challenges, along with rising transportation costs and volatile economic and market conditions, many industry-leading manufacturers–as well as consumer packaged goods (CPG) distributors and their retailing partners–have been working towards elevating their S&OP processes to an enterprise-wide global scale.
These trading partners are striving for this scale in order to enhance supply chain visibility, reduce costs, and achieve more integrated business planning and management. As a result, businesses of all types and sizes are now discovering how this next generation of S&OP approach and enabling tools can actually become mission-critical elements of an integrated business planning (IBP) strategy, as introduced in Part 1. Some of the primary business drivers for IBP include the following:
* significant organizational pressure to improve corporate performance
* the need for a more formal process and tool-sets to grow business
* drastic shifts in consumer buying patterns driven by the economic downturn
* large cost reduction initiatives including a desire to reduce inventory and working capital.
No comments:
Post a Comment