Supply Chain Optimization is Often the Missing Piece of S&OP
Many S&OP processes stop with the sales planning. When you extend your S&OP process to include optimization through a tool like LogicNet Plus XE, you can reap many benefits.
The picture to the left is shows some highlights from an S&OP case from a beer company. On a monthly basis, as part of the S&OP process, the operations of this beer company are modeled and optimized in LogicNet Plus XE. The details below the map provide information on how much beer, by product by month, is shipped to each of warehouses and how much product is produced in each month. The graph shows the inventory build up in the supply chain by warehouses.
Besides providing insight into the operational cost and capacity implications of a given sales plan, the results also show the impact on total revenue, operational gross profit, and total pre-build inventory.
These results can also provide insight into the sales plan. For example, it can determine the cost and feasibility of promotions, it can suggest additional demand shaping activities by looking at under-utilized capacity.
In this case, the firm analyzed different demand plans around the implications of a marketing program to grow demand in a region, the implications of a promotion for a specialty product, and the implications of a price increase.