How Advanced Analytics Improve S&OP Performance

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How do leading organizations bring new products to market in a cohesive, coordinated way? How do they know how much material to buy and when? How do they know when new promotions will run and how they will impact demand? They leverage an S&OP process that is empowered by advanced analytics-based software.

The core S&OP process is comprised of five high-level steps:

  1. Data gathering: Statistical forecast with sales overrides
  2. Demand forecast: Demand planning team creates their statistical forecast
  3. Supply plan: Constraint-based supply plans created
  4. Pre-S&OP meeting: Consensus recommendations for S&OP team
  5. Exec S&OP meeting: Final decisions made

The integral aspect here is the integration of sales, marketing, operations, and finance (possibly even IT) to agree on the forecast, supply plans, and financial outlook based on the final decisions. Each business unit has a contribution and an impact. Depending on how the numbers look, finance may have increased cash flow, which enables them to make different investment choices. The executive team may have pending expansion plans that are predicated on sales performance.

With complexities in the supply chain always on the rise, S&OP teams need a unified system that enables them to understand the probabilities of certain scenarios. Having a unified system gives S&OP real-time ramifications of a new account closing one month earlier than forecast, or if a key account is lost. They are also able to model what happens if a supplier is late. How does it impact their cashflow this month, or next month? This is where leveraging advanced analytics in a unified S&OP platform is key. This enables the S&OP team to answer these key questions and others confidently.

Working in silos, in unconnected and non-unified plans is an immature, under-performing approach to business; not just S&OP. S&OP teams are feeling the pressure to work in a more collaborative, unified way. Let a leading solution like Vanguard Predictive Planning help you achieve your goals.