What is in this article?:
- Supply Chain Metrics: Improve Supply Chain Planning with S&OP
- External Demand Collaboration
Many organizations have adopted sales and operations planning (S&OP) as a way to promote visibility within the enterprise and to foster collaboration among business functions. In fact, according to data from APQCs Open Standards Benchmarking in supply chain planning, 82 percent of participating organizations have a formal S&OP program.
With so many organizations using S&OP, what does the average S&OP program look like? Can organizations take steps to improve their supply chain planning?
APQC asks organizations participating in its Open Standards Benchmarking to rate specific S&OP processes based on use. Using a five-point scale, organizations rate the processes lower if they have adopted them to no extent or to a little extent. Organizations rate processes higher if they have adopted them to a significant extent or a very great extent.
When asked to rate how often they use each of the S&OP processes, responding organizations gave the highest rating to "formal meetings with sales, marketing and supply chain operations," which had a score of 3.9 on a scale of 0.0 (used to no extent) to 5.0 (used to a very great extent). None of the processes have been adopted to a very great extent or a significant extent. This is surprising for the process of holding formal meetings with sales, marketing and supply chain operations. These meetings have been adopted more than any of the other processes, but, as they are essential to S&OP, should probably be adopted to a greater extent by organizations with S&OP programs.
The two processes adopted least by the responding organizations are "optimizing transportation management based on integrated demand and supply plans" and "external demand collaboration with customers." External demand collaboration incorporates the customers view of demand into an organizations planning process. Bringing a different perspective to the supply chain planning process can broaden an organizations view of a product market and allow organizations to better anticipate changes in demand.