Balances demand and supply
	Aligns volume and mix
	Integrates financial and operating plans

Volume refers to product families and aggregate resources; mix is SKUs and individual customer orders. If volume – rates of sales and production – is planned effectively, it’s much less difficult to deal with mix problems as they inevitably arise. On the other hand, if volume is not planned well, then mix issues become substantially more difficult to cope with. Smart companies plan their volumes first, and spend enough time and effort doing it well.

The major benefits of Sales & Operations Planning include:

	More timely and informed decision making, leading to reduced emergency and contingency costs on capital projects;
	Provision of capacity in line with business plans. This generally leads to a more stable master schedule which delivers higher customer service, lower inventory and better productivity;
	Risk reduction, especially where the supply of strategically important materials is limited;
	Simpler and more accurate budgeting, since the S&OP process provides a dynamic link between the business plan and the operational plan, allowing both to be kept in step with each other. The budget information then simply drops out of the S&OP.

Greater Savings, Service and Reactivity
Axios have many years experience in implementing sustainable Sales and Operations processes providing an invaluable “window into the future” for many blue chip clients.

 

Case Study 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.