Rock Ledge Resources > Industries - Manufacturing > Representative Project - Sales and Operations Planning

Implementation of Sales and Operations Planning Drives Increased Customer Satisfaction and Frees Up Significant Cash

Business Challenge

A $300 million global distributor suffered from inventory turns below four and global product availability of 92%, driving significant loss of revenue. The company has 100+ suppliers in thirteen different countries shipping over 6,000 SKU's to four regional distribution centers located in Europe, North America, South America and Asia. The lack of a formal demand planning process and the resulting lack of accountability left the COO with a very frustrating situation that was holding back further market penetration.

Solution

A principal of Rock Ledge Resources took on the task of determining and implementing a best practice solution that would optimize product availability and cash committed to inventory. The company had begun a Sales and Operations Planning process (S&OP), but implementation had failed as the process did not expand beyond the planning department. Quickly, S&OP was elevated to the COO level with the general managers of the four regions responsible for incorporating the process in their region. In addition, while demand planning remained in the regions, the planners were functionally accountable to corporate supply chain and the supply planning was centralized. S&OP meetings were held monthly in each region and at the corporate level. The regions were held responsible for demand forecasting and sales attainment. Marketing contributed on new products and promotions. Supplier resource management detailed supplier performance and potential supply issues. Corrective actions were agreed upon and assigned. The COO now had the visibility to issues and opportunities across the board and was able to hold the organization accountable for progress.

Results

Through detailed follow-up of actions assigned as part of the process, execution across the company improved and customer satisfaction rose dramatically. Product availability reached 98% and inventory turns more than doubled in an eight month period. By adopting a common planning process across the company, process improvements were quickly transferrable and variance reduction became an ongoing process.

Relationships: Russ Weybright | Operational Excellence | Manufacturing