Introduction
You have demand for your product – strong demand in fact. So what's the problem?
You're out of stock … and you've lost that revenue.
Unfortunately, lost sales are just the beginning of a cascade of potentially ugly outcomes for your business: poor capacity utilization, higher costs across the supply chain, declining service levels, lower customer satisfaction and “unearned” opportunities for the introduction of competing products.
To nip these issues in the bud, best-in-class procurement organizations are embracing sales and operations planning (S&OP) to significantly reduce, if not entirely eliminate, the frequency and impact of these issues.
In a nutshell, the S&OP process helps organizations to decide how much of which SKUs to manufacture, which facilities to use to manufacture them and where to send these SKUs. These decisions are based on sales forecasts, inventory levels and capacity utilization, and target service levels.
GEP believes that — as partners in the supply chain and constituting the source of the materials — suppliers are absolutely fundamental to a sound S&OP process. This paper shares GEP's perspectives on the key approach to integrating suppliers in the S&OP process. We also illustrate the benefits of doing so through the work done for a leading biotechnology company.