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EXECUTIVE SUMMARY | Uncertainty and poor information reduce decision-making effectiveness, increase costs, and lower customer service. Yet, much of the information we need to make decisions is known by someone else in our firm or supply chain. This article shows that when two programs - Sales and Operations Planning (S&OP) and Collaborative Planning, Forecasting and Replenishment (CPFR) - are integrated, they provide the information we need for decision making. Key success factors and performance outcomes are also discussed.
Companies succeed when identify customer needs, develop customer-appropriate value and build world-class processes deliver to promise. Success emerges companies position the right product the right place at the right time, and the lowest cost possible. Managing materials flow effectively and is absolutely vital. Specifically, demand management supported accurate forecasting, excellent management, agile production, and responsive supply management a company's ability to efficiently high levels of customer value. implication is clear: Now, more than the various functions within a firm as well as the diverse companies within a chain must work in concert to create value customers demand. translating need and desire into coordinated action is far easier said done. Most companies still operate limited coordination and Internal functions are disconnected, in one another is limited, and operating groups usetheirownfo recasts managetheir operations. The time for business execution visibility is term so that day-to-day operations not connected to strategic goals. Looking upstream, suppliers have only a limited view of future demand Customers can provide information suppliers would otherwise have to Likewise, focusing downstream, retailer lacks category or market that could be provided by key Indeed, world-class suppliers work a variety of customers - typically multiple industries. As a result, they exposed to a number of market-sensing opportunities and may possess industry and macro-economic Each trading partner forecasts its independently and marches to its beat. Past supply chain outages both suppliers and buyers to build buffer stocks to avoid risk, and without a shared view of consumer purchases, the planning systems of both buyer and supplier tend to build inventories based upon historical shipment variability that is not related to consumer buying patterns. As a result, the buyer-seller relationship is often adversarial.
What is needed is a mechanism to orchestrate the value-added activities of the firm and...