Integrated Business Management (Aggregate Planning and Advanced S&OP)

Integrated Business Management (Aggregate Planning and Advanced S&OP)

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Bridging Supply & Demand
“It takes two to tango”

Have you ever watched a pair of good performers dancing the tango? In thinking about who leads the dance, most people would support the male partner does. Yet, the most critical question is who is the better dancer. One could assume the female must be the better dancer as she must mirror the man’s moves, backwards and in high heels! The key message is that it’s all about synchronization.
The integration between supply and demand is indeed like tango. When it works well, it is an image of beauty.
Demand is like men in leading the dance. Customers and sales drive supply-side activities. Demand management requires integrating demand and supply in real time. Demand management is not just about forecasting; it includes order promising and management, production scheduling and aligning demand with supply.
Supply, like the female counterpart in tango that must perform all the complicated steps — with the added challenge of performing them backwards and in high heels.
The Sales & Operations Planning (S&OP) objective focuses on creating a bridge for supply management (that includes Supply Chain, Operations, and Logistics), and demand management (that includes Marketing, Sales, and Customer Service).
This liaise helps to avoid stock-outs, excess inventory, poor profit margins, and low customer loyalty.