Sustainable competitive advantage with S&OP for companies of all sizes

Posted on June 30, 2011

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A big portion of this site is dedicated to helping manufacturers, distributors and even service companies obtain sustainable competitive advantage utilizing S&OP supply chain concepts and tools.

So on the risk of being redundant but overtly clear we will define what we mean by Supply Chain S&OP Strategies and Enablers.

A well designed S&OP strategy and enablers within a firms supply chain should and will greatly improve the firms ability to produce the right product in the right quantities and allow for feasible commitments to customers and then the execution and completion of that quoted order commitment.    The financial and customer service measurements are led by reducing working capital / inventory, improving cashflow (getting paid timely and without having to carry float), shorten leadtimes and or provide customer repeatable and predictable lead times for their orders and in many cases help close and sell the orders on the bubble.   For example making the sell and fulfilling the order of an important customer that needs 10 of item A by next Tuesday –  but there are only 6 in stock.    Another example might be a customer who does not need the product A  for 3 months but you can close the deal by giving a buy early discount vs. having customer spend next 2 month shopping price with your competitors then beating you up at the last minute on price.  This way you get the order, with proper S&OP coordination get great profitablity and sales effort to close the order is minimized all while your product resources build a solid backlog.

One of the most important message we wish to communicate is firms of small to medium size (in sales not profitability 🙂 can actually leverage the arbitrage of the S&OP enabled supply chain much faster, better and in great percentage terms then larger firms.

To help illustrate and hopefully create a living breathing case study for you the audience one of our new clients has agree to let us post the step by step approach, tools, messaging, questions as they deploy S&OP to enhance their growth, profitability and service levels to their customers.   This customer is typical of many of the success stories DCRA Inc. (www.DCRASolutions.com) has mentored in the past 9 years.     This manufacturer produces significant sales per employee, high profits, uses a good percentage of contract manufacturing and serves customers in both industrial and service retail.     A larger firm in “profit percentage” but small to medium in total sales ($20mm or so… exact figures to be released only with their permission)

So next will be the “needs / problem” statement from the company to us at DCRA inc. and our initial documents and tools to begin the diagnostic and design process.

In the meatime you can check our free knowledgebase at www.Texaslcc.org that follows the DCRA TOF (TM) Total Order Fulfillment methodology for tips, case studies, tools and diagnostics.

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