Gates, triggers and uncertainty envelopes. One of the greatest areas of opportunity for companies maturing their sales and operations planning (S&OP) processes is in New Product Innovation. Why?
Demand management has always been at the top of supply chain professionals’ list of challenges. Of late, many companies have also indicated that having grappled with cost cutting a few years back, now they are more focused on growth. Predictably, 62% of the respondents sought growth through channels, 46% through more direct customers, and approximately 20% by creating new products.
Frequently, I get asked the question, “What is the value of S&OP?” When I get the question, I smile. For clients that I have worked with on this topic, the value speaks volumes, but to companies trying to get started, the value proposition is elusive. So, today, let me answer the question by telling a story.
Just before the holiday break, dropped the very interesting results of a Gartner survey on the challenges to sales and operations planning in Consumer Goods. The top challenge was surprisingly down-to-earth. It bodes well in that it reveals a maturing of S&OP in the industry and an opportunity to make even more progress.
Anyone who has worked with asset intensive process manufacturers knows how hard it is to change the thinking about machine capacity utilization. For years asset utilization has been the de facto measurement where running smaller lot sizes was not an option.
Amazon’s recent announcement that they will start Sunday delivery through a deal with the USPS is, from a supply chain point of view, another example of the cadence of business speeding up. What used to be monthly became weekly, what used to be weekly became daily, what used to be daily became hourly and it continues to trend towards instantaneous.