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...

08/01/2008


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...
The true cost of lubrication: Three keys to consider when evaluating oils; Plant Engineering Lubrication Guide; 11 ways to protect bearing assets; Is lubrication part of your KPIs?
Contract maintenance: 5 ways to keep things humming while keeping an eye on costs; Pneumatic systems; Energy monitoring; The sixth 'S' is safety
Transport your data: Supply chain information critical to operational excellence; High-voltage faults; Portable cooling; Safety automation isn't automatic
Case Study Database

Case Study Database

Get more exposure for your case study by uploading it to the Plant Engineering case study database, where end-users can identify relevant solutions and explore what the experts are doing to effectively implement a variety of technology and productivity related projects.

These case studies provide examples of how knowledgeable solution providers have used technology, processes and people to create effective and successful implementations in real-world situations. Case studies can be completed by filling out a simple online form where you can outline the project title, abstract, and full story in 1500 words or less; upload photos, videos and a logo.

Click here to visit the Case Study Database and upload your case study.

Maintaining low data center PUE; Using eco mode in UPS systems; Commissioning electrical and power systems; Exploring dc power distribution alternatives
Synchronizing industrial Ethernet networks; Selecting protocol conversion gateways; Integrating HMIs with PLCs and PACs
Why manufacturers need to see energy in a different light: Current approaches to energy management yield quick savings, but leave plant managers searching for ways of improving on those early gains.

Annual Salary Survey

Participate in the 2013 Salary Survey

In a year when manufacturing continued to lead the economic rebound, it makes sense that plant manager bonuses rebounded. Plant Engineering’s annual Salary Survey shows both wages and bonuses rose in 2012 after a retreat the year before.

Average salary across all job titles for plant floor management rose 3.5% to $95,446, and bonus compensation jumped to $15,162, a 4.2% increase from the 2010 level and double the 2011 total, which showed a sharp drop in bonus.

2012 Salary Survey Analysis

2012 Salary Survey Results

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.