{"id":226,"date":"2009-08-03T13:22:53","date_gmt":"2009-08-03T20:22:53","guid":{"rendered":"https:\/\/demand-planning.com\/?p=226"},"modified":"2009-08-03T13:22:53","modified_gmt":"2009-08-03T20:22:53","slug":"one-number-planning-sop","status":"publish","type":"post","link":"https:\/\/demand-planning.com\/2009\/08\/03\/one-number-planning-sop\/","title":{"rendered":"\u201cOne Number Planning\u201d & S&OP"},"content":{"rendered":"
\"Scott

Scott Roy<\/p><\/div>\n

I was asked recently to clarify my previous objections to a \u201cOne Number\u201d planning world! In the late 90\u2019s and early 2000\u2019s there was a movement underfoot to drive the entire organization from a single operating number. In theory that would be a good thing as long as you have the right number. Too many times that one number was driven by finance and in actuality the budget. What ended up happening next was everyone else was left to reverse engineering the budget down to item level forecast or sales plans. In my experience the budget is what the company wants or wishes to happen, not necessarily what is going to happen<\/p>\n

When it comes to Sales and Operations Planning (S&OP)<\/a> you do need to have \u201cOne\u201d number that you are executing towards; production planning, purchasing, inventory management, plant operations.\u00a0\u00a0 In most companies that one number is not the budget but a demand plan or demand forecast. The demand plan should be a plan that represents the best indication of the future adjusted to the risk that the company wants to plan\/execute against. This risk should be made clear in the S&OP process and bought in by everyone. You use the S&OP meeting to develop plans to cover the uncertainties and risk in any plan by maybe deciding to enhance your inventory position or getting more capacity lined up.\u00a0You want a demand plan to be realistic and probable.<\/p>\n

In reality you will have multiple numbers and they will all have a role in the business. You will most likely have a revenue budget, sales targets, and other numbers that people have created.\u00a0 What you do now is plan to the demand plan and manage to the gap in those other numbers; call them out, make them visible but don\u2019t force all the numbers together for the sake of having One Number.<\/p>\n

The bottom line is S &OP has to execute against one number the demand plan\/forecast.\u00a0 You will have other numbers, but you manage to the gaps.\u00a0 Don\u2019t force a number for the sake of having one number.\u00a0 The demand plan should be the most realistic and probable out come of the future!<\/p>\n

Scott Roy
\nCollaboration Planning
\nWells Dairy Inc<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

I was asked recently to clarify my previous objections to a \u201cOne Number\u201d planning world! In the late 90\u2019s and early 2000\u2019s there was a movement underfoot to drive the entire organization from a single operating number. In theory that would be a good thing as long as you have the right number. Too many […]<\/p>\n","protected":false},"author":10,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[33],"tags":[34,35,83,37,74,38,84],"class_list":{"0":"post-226","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-forecasting-and-planning","7":"tag-demand-planning","8":"tag-forecasting","9":"tag-one-number","10":"tag-sop","11":"tag-sales-forecasting","12":"tag-supply-chain","13":"tag-wells-dairy"},"_links":{"self":[{"href":"https:\/\/demand-planning.com\/wp-json\/wp\/v2\/posts\/226"}],"collection":[{"href":"https:\/\/demand-planning.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/demand-planning.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/demand-planning.com\/wp-json\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/demand-planning.com\/wp-json\/wp\/v2\/comments?post=226"}],"version-history":[{"count":0,"href":"https:\/\/demand-planning.com\/wp-json\/wp\/v2\/posts\/226\/revisions"}],"wp:attachment":[{"href":"https:\/\/demand-planning.com\/wp-json\/wp\/v2\/media?parent=226"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/demand-planning.com\/wp-json\/wp\/v2\/categories?post=226"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/demand-planning.com\/wp-json\/wp\/v2\/tags?post=226"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}