Sales And Operations Planning In The Era Of Demand Driven MRP

By Bill Leedale

Sales and Operations Planning (S&OP) is a united, integrated approach that makes it easier to recognize a mismatch between resource availability and demand, and quickly adjust. Interest in S&OP has been high in part because of a shift towards to-order manufacturing modes, which benefit from systems that help manage unpredictable, fluctuating demand. Rapid changes in demand and increased reliance on extended supply chains mean that sales, the manufacturing supply chain and other operational players must communicate efficiently in real time and make business course corrections in a smart way — that is exactly what S&OP meetings and processes accomplish.

Demand-driven materials requirements planning (DDMRP), meanwhile, is a discipline designed to create strategic buffers to help deal with unanticipated demand shocks. The ability to match supply to demand through S&OP and plan for demand shocks through DDMRP would appear to be compatible systems. But can you do both at once? And how can enterprise software facilitate a joint DDMRP-S&OP environment?