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Chapter 7 - SCM
Chapter 7 - SCM
Predictable variability
Managing supply
Managing demand
Sales and Operations Planning
Managing capacity:
o Time flexibility from workforce
o Use of seasonal workforce
o Use of subcontracting
o Use of dual facilities – specialized and flexible
o Designing product flexibility into production processes
Managing inventory:
o Using common components across multiple products
o Build inventory of high demand or predictable demand products
Benefits:
o Improved forecast accuracy
o Higher customer service with lower finished goods inventory levels
o More stable supply rates, resulting in higher productivity
o Faster and more controlled new product introduction
o Enhanced teamwork at both the executive and operating levels
o Better decisions with less effort and time
o Better alignment of operational, marketing, and financial plans
o Greater accountability for results
o A window into the future to see potential problems soon enough
Process:
Step 1: Generate quantitative sales forecast
Step 2: Marketing adjusts the forecast
Step 3: Operations checks forecast against existing capability
Step 4: Marketing, operations, and finance jointly review forecast and
resource issues
Step 5: Executives meet to finalize forecast and capacity decisions
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