Chapter Objectives
   Be able to:
   Distinguish among strategic planning, tactical planning, and 
    detailed planning and control. 
   Describe why sales and operations planning (S&OP) is 
    important to an organization and its supply chain partners.
   Generate multiple alternative sales and operations plans. 
   Describe the differences between top-down and bottom-up 
    S&OP and discuss the strengths and weaknesses of level, 
    chase, and mixed production strategies. 
   Discuss the organizational issues that arise when firms decide 
    to incorporate S&OP into their efforts. 
   Examine how S&OP can be used to coordinate activities up and 
    down the supply chain. 
   Apply optimization modeling techniques to the S&OP process.   
    Sales and Operations Planning
  Involves:
  • Strategic and tactical considerations
  • Top-down planning
  • Bottom-up planning
  • Optimization techniques
      Sales and Operations Planning 
               (S&OP)
     • Purpose:  Select capacity options over 
      the intermediate time horizon
     • Capacity options:
       –Workforces
       –Shifts
       –Overtime
       –Subcontracting
       –Inventories
       –etc.
               Time Horizon View . . .
    Short-Range Plan       S&OP        Long-Range Plan
    (days, weeks out)   (months out)      (years out)
     Capacity levels    Changes in        Changes in
       considered        adjustable          fixed
     “frozen” in the      capacity         capacity
       short-term         possible         possible
         S&OP continued 
  (2 - 18 months out)
  • Outside of time frame  strategic planning
  • Inside of time frame  tactical planning
  “Big Picture” approach to planning
  • Families or groups (aggregation) of:
    –Products
    –Resources
    –Technologies or skills
  • Provide “rough” estimates