*By Carlos H. M. Aravechia

In the first part of the article“Why do companies still find it hard to execute the S&OP process and what to do to change it?”we talked about how to plan sales including some details that make the difference. The sequence of a good S&OP includes analyzing the feasibility and identifying possible constraints and actions necessary to overcome them, including investments, costs and impacts on the human capital of the organizations involved.

The planshould consider the resources that are most critiical or most likely to have capacity problems, whether internal or external. Often, due to technology limitations, it is not possible to perform simulations in a timely manner to complete the planning cycle, which usually has a monthly dynamic.

In this case, the concept of Rough Cut Capacity Planning (RCCP) prevails, elaborated based on the Master Production Schedule (MPS). Master Production Schedule Thus, groupings of products must be considered by using groups, families or channels that allow analysis and discussions with all participating areas. 

The possibility of translating or converting the group used by the commercial area to the family used in the analysis of productive resources, and vice versa, facilitates the process and helps in the creation of plans that are more connected to the reality of these areas. It is not uncommon, however, to find companies that err on the side of caution by excess or lack of details. 

From the definition of the operational scenarios, it is also possible to determine the scope of work of the employees, including the possible need for additional shifts, hiring and even defining plans to outsource part of the production. It is worth noting that even with an aligned planning, it may be necessary to reduce the demand used in the planning and prepare a restricted demand plan, which will not meet the initially desired volume entirely.

At the end of this stage, it is possible to assess each of the scenarios, with the participation of the financial area, with a projection of results that support the discussion at the Pre-S&OP meeting and decision-making at the S&OP executive meeting.

In the final stages, the effective participation of all areas involved in the process, which should align and resolve the existing conflicts, is essential. All with short, medium and long-term strategic objectives in mind, and thinking about the best result for the company.

The presence of the company's CEO and executives at this stage is essential, because, in addition to the preparation of the plan, there must be collective commitment, the guarantee that the plans are carried out and that there are conditions and resources for this.

To close the process, it is necessary to integrate S&OP with S&OE, feeding this process focused on the short term, with the plan to be unfolded and put into execution within the scope of the MRP. The communication of the plan must also cover all the areas involved so that hiring, and investments can take place.

Now that we've talked about the steps in the the process, the following topic to this article will focus on the importance of people in this context. Keep an eye out so you don't miss the next post..

*Carlos H.M Aravechia is a Production Engineer, Solutions Architect in SCM and operates in the Innovation area at Numen.