Short Shelf Life S&OP Tools
Our client was a private label supplier of complex, chilled ready meals – which had only 1 or 2 days shelf life. This meant that
- the order to despatch cycle was measured in hours and therefore normal S&OP functions were based at and closely coupled to factories, and
- the multiple processes and complexity of the products meant that capacity pinch points were unpredictable from day to day and week to week.
In order to get an effective, cross functional S&OP process working, Sequoia built a graphical capacity model – driven by master recipe data from the SAP ERP system:
- Capacity was modelled by process, by day – so that the compound effects of in-week cycles and promotional plans could be visualised, live, within an S&OP meeting;
- Drill down capabilities facilitated detailed interrogation of which SKUs were pressurising which processes in any specific period;
- What if capabilities meant that forecasts, shift patterns and even installed processes could be modified – during a live discussion to finalise forward plans for both Sales and Operations. This modification was non-destructive so that the model could easily be reset to the original assumptions or saved as a specific scenario.
The model helped to transform relationships between Sales and Ops – from a history of somewhat adversarial meetings to a true, cross functional decision approach. This in turn stabilised the business and helped to protect it from unwittingly entering into agreements that were outside its delivery capability.
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Inventory Policy Modelling
A large, complicated, Direct Sales client has experienced consistent and challenging sales growth and ever increasing geographical and SKU complexity. Forecasting is distributed to markets and procurement is via a globally distributed supply base.
The net result is that inventory management priorities are extremely difficult to assess and communicate.
Sequoia were asked to build an inventory policy model, leverage several of our skills:
- Solid core code components that robustly evaluate the relationship between inventory and the business parameters that drive inventory holding;
- The ability to deal with large complex data sets;
- The knowledge to create interactive, graphical tools.
We built a Board / Exec level, graphical policy tool that could both be used to evaluate inventory improvement initiatives and communicate them around the business from the Exec and out to the markets.
- Has selectable scope – allowing analysis to be performed at a total company level, or with a selected subset of countries, brands and categories;
- Computes aggregated inventory driving parameters (e.g. Forecast Accuracy and Lead Time) across the selected data set;
- Provides a graphical display, with selectable parameterised axis for managers to display the information in a way which suits their purpose;
- Facilitates non destructive, what if of improvements in the driver parameters;
- Allows drill down to individual sku / location level to better understand the source of problems or improvements.
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