Video Blog – S&OP solution helps with accurate forecasting to achieve business goals
A leading multinational beverage company embarked on a journey to develop a connected sales & operations planning solution on Anaplan. It aimed at enforcing process agility, improving forecast accuracy, and having better visibility of its brands across the S&OP cycle. Siddhant Parnaik of ITC Infotech explains how S&OP solution helps with accurate forecasting to achieve business goals
Sales and Operations Planning (S&OP) is the link between enterprise-wide business strategy and daily operations. It is also the underlying function that lowers lead times, determines customer satisfaction, impacts inventory costs, and plays a critical role in driving supply chain efficiency. In turn, it requires cross-functional communication and collaboration between sales, marketing, procurement, finance, and operations to accurately balance supply and demand.
A good S&OP approach provides decisions to calibrate production, meets short-term market demand and achieves financial objectives. Typically, say a CPG business, will sit down once a month or once a quarter to chalk out its sales and operations plan. A manual spreadsheet, even today, is the most used tool for the task. It should be evident to even novice planners that using a manual spreadsheet for this complex task is ladened with risks. S&OP has many moving parts and is riddled with ambiguities – only a sophisticated solution driven by technology can provide results that a business can use with confidence.
One of ITC Infotech’s customers, a leading global beverage manufacturer, understood the perils of using traditional and outdated S&OP tools. It was struggling to integrate data from large spreadsheets used by various teams involved in the S&OP process. Incorrect data, issues in extracting the latest data from core systems, the data in the wrong location in spreadsheets, were causing endless issues. The most significant issue was delay of up to three weeks in critical decisions related to production. In the absence of scenario-planning, executive decisions almost always missed the mark.
Most organizations that are using formal S&OP processes find that sales and operations rarely arrive at a consensus on demand. This leads to excess or obsolete inventory, lost sales and upset customers. The key cause of this is conflicting data.
The solution is to connect the functional teams and their systems on a single secure cloud-based platform capable of pulling live data into the S&OP process. For the beverage client, ITC Infotech customized a solution on Anaplan, enabling collaborative demand planning based on the latest sales inputs and facilitating demand allocation to plants. Using the solution, the team could easily balance demand and supply taking into consideration its capacity constraints. The platform is designed to recalculate output in real-time, and any change becomes available across stakeholders.
The new system enabled scenario planning for the client. Now, “what if” scenarios can be created, shared and compared, new products and suppliers can be added, assumptions can be made without tedious data collection and verification. Overall, it is easier to review plans and scenarios, build consensus and sign off on a plan. The final production plan is integrated with SAP for accurately managing the scheduling function.
The easy-to-use solution resulted in eliminating data silos for the beverage client. Sales forecast improved by 30 percent, and S&OP cycle time was reduced by 60 percent. In addition, the client improved customer service levels, fill-rates, and brewery capacity utilization.
These are gains that any business can access through a well-considered and customized implementation of a modern S&OP platform. Now, there are scores of businesses that continue to use spreadsheets. Organizations that choose a stable and reliable technological approach are bound to benefit from agile planning and the differentiator it creates. It is clear to see that as using technology for business functions grows, S&OP must become a priority area for investments.
Senior Associate Consultant, Digital Experience
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