Unplanned events: Rolling with the punches is the vital component in S&OP

Former boxing champion Mike Tyson once claimed, “Everyone has a plan until they get punched in the mouth.” In many respects, the same holds true for manufacturers. While a company may use sales & operations planning (S&OP) software to meet corporate objectives through better forecasting and planning, trouble comes in the form of an unexpected surge in demand—the figura...


Former boxing champion Mike Tyson once claimed, “Everyone has a plan until they get punched in the mouth.”

In many respects, the same holds true for manufacturers. While a company may use sales & operations planning (S&OP) software to meet corporate objectives through better forecasting and planning, trouble comes in the form of an unexpected surge in demand—the figurative punch in the mouth.

The reality is front-line decision makers are challenged daily to execute to plan despite unplanned events.

“There's a balancing act that's necessary to ensure supply meets demand, but to do so profitably, which is why manufacturers put so much stock in S&OP,” says Noha Tohamy, a director of supply chain for Boston-based AMR Research . “Executives can plan as much as they want, but at the end of the day, someone still must perform triage to ensure supply meets demand.”

What that requires is a combination of visibility and ongoing analysis to enable optimally matching supply and demand with overall S&OP objectives, Tohamy says. In other words, manufacturers must respond tactically as the situation warrants, she says.

Kinaxis , for example, offers a real-time solution used to match supply and demand,” Tohamy continues. “The solution's strength is the responsiveness it delivers as a result of a company being able to realize—in more-or-less real time—where it is in relation to plan.”

The Teradyne FLEX test architecture covers the widest range of technologies and test strategies, which is why Jim Wood, a company director, turned to the Kinaxis RapidResponse supply chain planning solution to enable Teradyne to take every order received while maintaining profitability.

Such functionality has become mission-critical at North Reading, Mass.-based Teradyne , a supplier of automatic electronics test equipment for the consumer electronics, automotive, computing, telecommunications, and aerospace & defense industries. According to Jim Wood, supply chain information systems director, Teradyne products are extremely complex, involve some customization, and production sites are scattered around the world.

“Product availability is a bigger selling point than functionality, so we accept customers' orders even if they come in at the last minute with expectations for rapid shipment,” Wood says. “We use Kinaxis' RapidResponse so we can give customers accurate delivery dates, meet those dates, and maintain profitability.”

When an order comes in, Teradyne staff members view current and scheduled production information, and determine the implications and cost savings of rescheduling jobs, or moving materials or production from one site to another, Wood says. The result is more profitable decision-making.

“We can't miss delivery schedules, but at the same time, we can't take an order on short notice and make its delivery at the cost of consequently missing other delivery dates,” Wood explains. “Kinaxis gives us the analytical capabilities we need to accept and meet new orders without sacrificing customer satisfaction on previously received orders.”

Randy Littleson, a Kinaxis VP, says Teradyne's success story centers on responsiveness and profitability, allowing the manufacturer to strategically outmaneuver competitors.

“If a company can quickly identify options and the impact of those options, it can reduce costs and simultaneously improve customer satisfaction, which ultimately leads to winning new business,” concludes Littleson.

No comments
The Top Plant program honors outstanding manufacturing facilities in North America. View the 2013 Top Plant.
The Product of the Year program recognizes products newly released in the manufacturing industries.
The Engineering Leaders Under 40 program identifies and gives recognition to young engineers who...
A cool solution: Collaboration, chemistry leads to foundry coat product development; See the 2015 Product of the Year Finalists
Raising the standard: What's new with NFPA 70E; A global view of manufacturing; Maintenance data; Fit bearings properly
Sister act: Building on their father's legacy, a new generation moves Bales Metal Surface Solutions forward; Meet the 2015 Engineering Leaders Under 40
Cyber security cost-efficient for industrial control systems; Extracting full value from operational data; Managing cyber security risks
Drilling for Big Data: Managing the flow of information; Big data drilldown series: Challenge and opportunity; OT to IT: Creating a circle of improvement; Industry loses best workers, again
Pipeline vulnerabilities? Securing hydrocarbon transit; Predictive analytics hit the mainstream; Dirty pipelines decrease flow, production—pig your line; Ensuring pipeline physical and cyber security
Upgrading secondary control systems; Keeping enclosures conditioned; Diagnostics increase equipment uptime; Mechatronics simplifies machine design
Designing positive-energy buildings; Ensuring power quality; Complying with NFPA 110; Minimizing arc flash hazards
Building high availability into industrial computers; Of key metrics and myth busting; The truth about five common VFD myths

Annual Salary Survey

After almost a decade of uncertainty, the confidence of plant floor managers is soaring. Even with a number of challenges and while implementing new technologies, there is a renewed sense of optimism among plant managers about their business and their future.

The respondents to the 2014 Plant Engineering Salary Survey come from throughout the U.S. and serve a variety of industries, but they are uniform in their optimism about manufacturing. This year’s survey found 79% consider manufacturing a secure career. That’s up from 75% in 2013 and significantly higher than the 63% figure when Plant Engineering first started asking that question a decade ago.

Read more: 2014 Salary Survey: Confidence rises amid the challenges

Maintenance and reliability tips and best practices from the maintenance and reliability coaches at Allied Reliability Group.
The One Voice for Manufacturing blog reports on federal public policy issues impacting the manufacturing sector. One Voice is a joint effort by the National Tooling and Machining...
The Society for Maintenance and Reliability Professionals an organization devoted...
Join this ongoing discussion of machine guarding topics, including solutions assessments, regulatory compliance, gap analysis...
IMS Research, recently acquired by IHS Inc., is a leading independent supplier of market research and consultancy to the global electronics industry.
Maintenance is not optional in manufacturing. It’s a profit center, driving productivity and uptime while reducing overall repair costs.
The Lachance on CMMS blog is about current maintenance topics. Blogger Paul Lachance is president and chief technology officer for Smartware Group.