You do not need to be a quantitative expert to get substantial returns from advanced analytic S&OP software. On the contrary, best-in-class applications are designed to make data and algorithmic technology accessible to non-technical business users. The end goal is to help you make optimal decisions by letting the software do what it does best so that you and your teams can see clear choices.
There are several reasons to review the product portfolio on a regular basis. It brings roles and teams together on product performance, KPIs, and overall portfolio strategy. It improves cross-functional coordination and shared risk management. It helps optimize the product portfolio, either for cost savings, profit margins, total return, long-range market strategy, or all of the above.
For certain companies, such as those with very large SKU volumes or complex product mixes, the Portfolio Review should be a fundamental component of the monthly (or quarterly) S&OP process, just as important as the Demand Review and the Supply Review.
But it is not necessarily easy. In many organizations, different departments operate as silos, limiting collaboration on fundamental decisions about what to make and sell, and when, where, and how. These include decisions about the product pipeline, research and development resource allocation, new product introductions, phase outs, pricing changes, margin and profitability targets, life-cycle management, and overall portfolio strategy.
Nearly all popular ERP, BI, and performance management systems advertise S&OP and forecasting, but most fall woefully short of delivering on forecasting’s full business potential. Why do we care? Because forecasting, when based on advanced analytical methods, is arguably the single greatest contributor to operating efficiency, savings, and customer satisfaction—across all industries. So, it’s critical to define what forecasting is, and then begin to parse it from the fray of business intelligence capabilities that are so commonly marketed as forecasting.
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