Two Shining Examples of S&OP

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Two Shining Examples of S&OP

By Alarice Padilla - 08/03/2009
August 3, 2009 -- While S&OP is widely recognized as a "must do" business process that delivers value, the reasons for implementation and expectations of benefits vary depending on an organization's business goals. Done right, companies can use S&OP to better align an organization with its business objectives; improve visibility of supply chain performance and execute sharper and more insightful decision making, which can have positive impact on revenues as well as reduce costs.

During a Web event on July 21, 2009, titled "Turning Challenges into Opportunities through S&OP Successfully," AMR Research Analyst Noha Tohamy talked about uptake of S&OP in the consumer goods industry. "[S&OP] is a critical process for all manufacturers and retailers, and because of the downed economy, this process has become even more critical over the past 12 to 18 months." She also explained the evolution of S&OP to integrated business planning, the challenges in establishing an effective S&OP process, success factors as well as staring points.

In addition, Alexandria Rumble, Global Product Marketing director for TXT e-solutions, was present to share S&OP case studies from a European consumer goods company Foodvest, and Chiesi Pharmaceuticals. Here is a brief glimpse into her revelations: 

--Foodvest is a $1.9 billion company that owns three of the largest continental brands in the seafood market. Foodvest's S&OP objective was to use supply chain as a competitive advantage, with goals to reduce logistics spend and support new routes to market, among others. Its strategy included responding faster to market needs, reduce and control working capital, develop processes and systems and build supply chain organization capabilities. Rumble detailed how Foodvest used technology to enable optimized processes.
 
--Chiesi Pharmaceutical was founded in 1935 and is still privately owned, primarily focused in Europe. Some of its key objectives were to improve business continuity, keeping a strong focus on product launches, changes and availability; design and implement a process that defines and shares priorities; and synchronize supply and demand, among others. In effect, Chiesi used a roll out and implementation approach to S&OP with benefits such as reduced risk of out of stocks; reduced inventory levels of 15 percent; better sales plan visibility hence better operational agility and responsiveness; increased forecast accuracy by 22 percent; and an improvement of the MAPE (mean absolute percentage error) by 30 percent.  

To learn more about these case studies and others, click here and listen to this web event in its entirety.