Page 356 - Orlicky's Material Requirements Planning

CHAPTER 20 Sales and Operations Planning 335

The early 1990s saw an additional complication, the advent of the single market in
Europe. This heralded the regional business concept where the business unit or cate-
gory, strategic marketing, finance, and supply chain were to be managed regionally.
Sales, tactical marketing, and financial management of the legal entity were to be man-
aged in the countries. This added complexity and ambiguity to the traditional S&OP
process. Multiple sales and marketing units interfacing with multiple sourcing units
raise questions. How many meetings do you have? Do you have a meeting in a sourc-
ing unit or in the market or both? Should you have meetings, or should you focus on
an integrated process?
We know some people wedded to the traditional S&OP concept who religiously
hold S&OP meetings at their European plants and ensure that sales and marketing attend
monthly meetings at all the plants that supply their products. Imagine a sales direc-
tor/manager who sells product supplied from five different plants in Europe! This poor
soul wastes five days a month of precious time with customers by being trapped in some
outdated S&OP concept. S&OP not only requires a reconciler—but a cross-functional
integrator also is mandatory.

S&OP, THE RECONCILER AND INTEGRATOR
With this background and with some early work on Europeanization with several multi-
national businesses, we developed a more robust model that is often called the five-step
process. Since then, the process has continued to evolve into a model that we use to frame
the key steps of S&OP (Figure 20-5).
The relevance and significance of the five steps and how they must be integrated
have been tested over the last decade. They have been adapted to meet the pressures of

FIGURE 20-5
3. Managing the
S&OP— Portfolio and
Ling/Coldrick New Activities
model.
1. Senior
4. Managing 2. Integrated Business
Demand Reconciliation Management
Review

5. Managing
Supply

Potential Issues Potential Issues Potential Issues
Multiple Supply Plants (INT/EXT) Consolidation What Level to Establish
Regional Marketing Multiple Business Units the Ownership of the
Regional Manufacturing Product Focus Teams Process?
Multichannel Multiple Sourcing or How to Handle
Multicountry Allocation Matrix Management