The purpose of Sales and Operations Planning is to create a tactical business plan for the company over a rolling planning horizon, normally six to twelve months.
The decisions made during the S&OP process include: the level of operation, planned product mix, timing of unit outages, planned inventory levels, raw material requirements, and expected product shipments and revenue, i.e., how much of each product will be available for sale in each time period.
Sales and Operations Planning aligns the operating plan, sales plan, and financial plan, creating an integrated business plan agreed by all company stakeholders.
LOGIS Metals Solution is a group of industry-specific products for advanced planning and scheduling of metallurgical companies.
The purpose of Master Planning is to align demand, capacity and inventory with current business goals.
The Master Planning process always takes place in the context of current business problems. Production may be falling behind plan, creating a back schedule burden, or over achieving, providing an opportunity for increased sales. Booking may be falling short of allocations, threatening a furlough, or there may be market pressure to book above allocations. Inventories may be above target levels. Urgent maintenance may unexpectedly be required on a key work center. Usually, several of these issues are happening simultaneously. So the Planner’s role is to create a tactical plan for the company that both solves current problems and balances supply and demand in some near optimal way over the entire planning horizon, and to gain consensus on the plan from all stakeholders.
The Master Planning process is therefore designed to be iterative. It will normally take several iterations before Planners converge on a plan that will satisfactorily address all current problems and opportunities.
In addition, the Planner is inevitably asked to explain how and why actual performance differed from plan. Master Planning enables the Planner to generate multiple scenarios for the same planning horizon, compare the merits of different scenarios, and maintain a history of both final plans and supplemental scenarios.
The output of the Master Planning process is a detailed operating plan, usually in weekly increments, spanning a rolling six to twelve months, or longer. The Master Planning solution provides clear forward visibility into the operational implications of business decisions.
Sales Allocation Planning
The purpose of Allocation Planning is to distribute planned product shipments from Master Planning over the sales hierarchy, so that the sales plan aligns with the operating plan.
The goal of Allocation Planning is to configure an executable sales plan that is consistent with commercial priorities and is supported by the operating plan.
Planned product shipments from the Master Plan are the basis for Sales Allocation Planning, the second functional component of Sales and Operations Planning. Sales Allocation Planning applies commercial policies and priorities to distribute product volumes to Segments, Divisions and Customers based on the Sales Forecast. The Allocation Plan provides guidance to Sales divisions regarding how much of each product is available for sale in each time period, for each customer. It is the foundation for accurate order promising and improved delivery performance.
Allocation Planning provides flexibility for the Sales organization to prioritize demand, and assign responsibility for order capture.
In actual practice, the selected components are combined to create unique workflows for almost every Metals company, based on their business model, commercial environment, and plant layout. The template also includes a comprehensive Metals KPI structure that supports supply chain performance management.Contact LOGIS