Integrated sales and production planning

Harmonization of the selling process with production planning resulted in proposed annual savings of EUR 1.3 million

Identified possibilities for annual savings of up to EUR 1.30 million

Shorter stock turnover

Clear and realistic implementation plan defined

The OpEx team was commissioned by a large hygienic paper manufacturer to harmonize selling processes with production planning processes. Ineffective management of its product portfolio and insufficiently organized forecasting and planning processes resulted in:

low accuracy of sales forecasts

inaccurate production planning

many products with low stock turnover

many inactive stock-keeping units (“SKUs”) in the system portfolio

Thanks to an understanding between the parties and the expertise of our OpEx team, we suggested the approach, the methods, and objectives of the S&OP project (optimal planning process setup - sales & operations planning - “S&OP”) to harmonize processes within sales and production planning, improve planning accuracy, and make product portfolio management more effective.

Our approach

To understand the existing process, map the current status of processes related to sales and production planning, and identify improvement opportunities, the OpEx team conducted and presented the follow-ing studies and analyses:

  • demand variability study
  • forecast accuracy study
  • stock analysis
  • impactibility workshop (assessment of improvement possibilities)
  • matrix of roles and responsibilities for S&OP
  • S&OP meeting structure 
  • “brown paper” planning method 
  • high-level implementation plan

We prepared and submitted a proposal for harmonizing sales and production planning

In the first phase, we identified barriers in individual departments preventing the integration of sales and production planning. The emphasis was placed on understanding the current situation.

The goal was to set up an optimal planning process (Sales & Operations Planning - “S&OP”). We initially analysed the structure of demand, inventories, and the portfolio at the SKU level. Then, we assessed the accuracy of sales forecasts and planning, and identified inefficiencies. Understanding mutual connections in planning with the focus on system, procedural, and human elements, enabled us to prepare a detailed plan of activities which resulted in:

  • a reduction in slow-moving inventories 
  • an increase in the accuracy of sales estimates 
  • an increase in the stability of the production plan

In addition, the client greatly benefited from new management techniques and skills thanks to the close co-operation between PwC and its own staff.

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