SALES AND OPERATIONS PLANNING
The Client
A division of a major plc in the Building Products industry producing and distributing materials to both its manufacturing facilities and the general market and also distributing finished product.
The Challenge
The business regularly experienced shortages of materials in manufacturing, shortages of transport or transport in the wrong place as there was no visibility of future demand other than orders already placed in a market where orders are confirmed close to delivery date. Frequently, large orders would catch Operations and Distribution unawares. A strong Customer Service ethos would result in costly reactive actions.
The challenge for the business was to introduce a process to effectively plan its manufacturing, inventory and distribution activities for a suitable future time period to allow adjustments to the capacity, inventory and fleet to be made in a managed, cost effective manner.
The Solution
A monthly S&OP process was introduced which balances demand and supply looking up to 3 months ahead for the main product families. Large specific orders are planned well in advance of the start date with the plans being signed off by the executive team. There is now a greater awareness of what's coming at them and time to plan the "big" jobs. Communication and understanding between departments has significantly improved and now everyone is working to an agreed, single plan.
The Results
A 10% saving in the cost of order fulfilment has been identified and some delighted customers have seen the benefits of their orders being planned in this way. The next challenge is to include their suppliers and customers in the process so that the whole Supply Chain can benefit from working collaboratively.
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