By Jouanna El Bast and Daniela Cadena
In our previous blog, we took a closer look at why traditional sales and operations planning (S&OP) processes often fall short for discrete manufacturers with complex engineering requirements. These manufacturers face unique challenges, such as managing the dynamic nature of projects with highly customized components, navigating frequent design changes, managing fluctuating resource demands, and coordinating complex bills of materials (BOMs). These factors create a level of complexity that traditional S&OP systems, with their rigidity and limited flexibility, are ill-equipped to handle. As a result, organizations often experience mismatched schedules, ineffective capacity management, cash flow disruptions and delays that undermine project timelines and overall efficiency. In this blog, we’ll explore a more adaptive approach to S&OP that is specifically designed to address these real-world challenges. By rethinking traditional processes and integrating tools and strategies such as scenario planning, real-time collaboration and dynamic capacity management, manufacturers can transform S&OP into a robust framework that not only meets the demands of complex engineering projects but also drives operational excellence. Read on to discover how this approach can streamline workflows, increase project visibility and control, and ultimately improve profitability while ensuring smoother project execution across your organization.
How can companies improve this?
While S&OP has proven to be effective across multiple industries, discrete manufacturing presents a unique set of challenges that highlight its limitations. Addressing these complexities requires rethinking traditional S&OP processes and adopting targeted strategies tailored to the dynamic demands of discrete manufacturing. Here are four key strategies to consider:
- Scenario planning:
Scenario planning is a fundamental tool for managing uncertainty. By simulating project delays and assessing their financial impact, companies can proactively prepare for potential disruptions. This strategy enables manufacturers to anticipate delays in real time, adjust production schedules and quickly reallocate resources to minimize costs and maintain operations. Being prepared for the unexpected keeps companies agile and better equipped to meet challenges. - Optimize planning parameters:
Fine-tuning critical planning parameters is essential to aligning S&OP with the realities of discrete manufacturing. Refining variables such as lead times; inventory levels and capacity ensures that forecasts remain accurate and responsive to changing production demands. This continuous optimization minimizes excess inventory, increases production agility and enables companies to quickly adapt to changing market conditions. - Improved BOM forecasting:
Sophisticated forecasting configurations for BOM planning can transform production planning. Methods such as driver-based forecasting use historical data and customer trends to predict which configurations are likely to be in demand. This insight enables manufacturers to produce the right mix of components, reducing excess inventory, minimizing waste and improving overall efficiency. - Sales funnel forecasting:
Using real-time sales pipeline data to forecast demand bridges the gap between sales and production. Predicting demand based on current sales activity ensures that resources are allocated to meet expected demand, aligning production with market demand. This approach increases responsiveness, improves customer satisfaction and maximizes revenue potential by focusing resources where they’re needed most. Together, these strategies provide a comprehensive framework for modernizing S&OP in discrete manufacturing. By incorporating scenario planning, optimizing planning parameters, refining BOM forecasting and integrating sales funnel insights, companies can transform their S&OP processes to achieve greater accuracy, flexibility and profitability in an ever-changing landscape.
How can tools support this?
Advanced planning tools are essential for driving S&OP improvements, equipping companies with the technology to increase accuracy, efficiency, and responsiveness. In this blog, we highlight Anaplan and Jedox as examples of platforms that address the complex needs of discrete manufacturing.
With Anaplan, manufacturers can integrate every aspect of their supply chain into a single, dynamic platform. Its real-time data visibility enables companies to respond quickly to market fluctuations and make informed decisions. Similarly, Jedox provides robust solutions tailored for manufacturers looking to customize their S&OP processes to better meet their unique challenges. Both tools bring flexibility and actionable insight to the planning process, enabling more accurate and agile decision making.
Simulation and scenario planning tools
Simulation and scenario planning are among the most powerful features offered by these platforms. Anaplan, for example, allows companies to design and customize scenario planning to meet their
specific needs. Companies can simulate project delays, demand fluctuations, and rough-cut capacity planning (RCCP) and evaluate the financial and operational impact of each scenario. With this functionality, manufacturers can visualize how changes will affect cash flow and resource allocation – all within the same integrated tool.
Optimizing planning parameters
Both Anaplan and Jedox excel at helping manufacturers optimize planning parameters. These tools allow users to automatically adjust critical variables such as lead times, inventory levels, and production capacity based on real-time data. They also provide customizable alerts and KPIs to ensure that production remains agile and aligned with changing demand and resource availability. By reducing excess inventory and improving working capital utilization, these platforms drive operational efficiencies and cost savings.
Forecasting configurations with data-driven insights
When it comes to forecasting, Anaplan and Jedox use driver-based forecasting tools to predict which product configurations are most likely to be ordered by customers. These forecasts can incorporate data from external sources such as Dataiku, allowing companies to combine historical data with sales trends for more accurate predictions. This ensures that production schedules are closely aligned with customer demand, minimizing waste and maximizing production efficiency.
Sales funnel forecasting
Both Anaplan and Jedox integrate real-time sales funnel data into their planning models. This sales funnel forecasting capability ensures that production and inventory levels are aligned with projected demand from the sales pipeline, improving responsiveness to market needs.
By combining these advanced capabilities, Anaplan and Jedox provide manufacturers with a comprehensive toolkit for modernizing S&OP processes. These platforms enable dynamic, data-driven decision making that drives accuracy, flexibility, and profitability across the organization.
Experiences and the implementation process
Thales is a French multinational industrial group specializing in the design and manufacture of electrical systems for the aerospace, defence, transportation, and security industries was facing a sharp increase in demand that was outpacing its engineering and production capacity. This challenge was compounded by extended lead times for sourced parts, a siloed operational structure, and a lack of integrated tools linking engineering and production. These issues led to inefficiencies, fragmented efforts, and a lack of confidence in production planning data.
To overcome these hurdles and prepare for future growth, the company partnered with EyeOn to implement a solution that would address its operational complexities while balancing project and product requirements. EyeOn facilitated seamless integration across functions by conducting data validation, stakeholder workshops, and thorough platform testing to ensure visibility and scalability. The company adopted Anaplan as its unified platform, enabling all Dutch business units to work from a single, transparent plan. This transformation enabled the organization to make data-driven decisions, improve resource management, and facilitate scenario planning. The implementation also increased executive engagement, operational agility, and cross-functional collaboration.
Ready to transform your S&OP process and take control of your project timelines and cash flow? Download our interactive infographic to discover how a new approach to S&OP can help you overcome these challenges and drive sustainable growth.
