INVENTORY PLANNING & OPTIMIZATION
Beyond S&OP: Mid-Tier Collaboration
Between Planning and
Product Development
Maturation of inventory management in organizations often follows a somewhat linear path
from the technical basics of planning to the organizational issues encountered in sales and
operations planning (S&OP). Coordination between product development and planning may
not be the last hurdle, but it has been a major stumbling block that many mid-sized firms are
increasingly overcoming.
—Ralph Cox, principal, Tompkins Associates
roduct development running late? Supply chain
plans being thrown into chaos? Supply shortages, last-minute airfreight shipments, missed
market launch dates, canceled orders, unhappy customers—
P
sound familiar?
facturing and transportation);
• Clear guidance on costs;
• Standardization and use of common components; and
• Extensive, effective communications.
The results speak for themselves: minimum inventory,
In all but the very best firms, these problems are extremely higher customer satisfaction, reduced costs, and last—but not
familiar to product development, purchasing, manufacturing, least—less risk (and stress!) for all.
marketing, sales, and senior management. Increasingly, however, mid-tier firms are making significant strides in addressing
The Outlook
some of the issues. The major elements in well-integrated Full awareness of the cost implications by all groups is the first
processes include:
step, and one that is increasingly being taken by smaller and
• A product development plan that involves others at an smaller firms. However, it is important to recognize that the solu-
early stage;
tion can be far from complete and still yield meaningful benefits.
• A meaningful “gate” system that includes items needed by The first, most elementary steps—such as standardizing part
other groups—bills of material, product specifications, numbers, key dimensions, or packing cases—often provide the
artwork, etc. (with reasonable time allowances for manu- greatest results for the least effort.
