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S&OP and Lean Work Best Together

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The following list combines the basic principles of lean thinking (see Lean Thinking, Womack and Jones, LEI) with the key concepts of effective resource planning.  

 

Define Value by Product - the only way to judge value is based on the customer's expectations.  

Identify the Value-Stream (Value-Stream Mapping) and Target Improvements - understand which activities add value, and which don't.  For those that don't, which can be eliminated?  minimized?  

Validate Demand Management Processes - verify that your systems for communicating with customers (order promising and order processing) and those used for anticipating customer needs (forecasting and distribution planning) are as effective as they can possibly be because they will be come the basis for takt time calculations, supplier projections, kanban loop and supermarket sizing, etc.  .  

Link the Supply Chain to Strategy (Sales and Operations Planning) - use S&OP to engage your sales and marketing, manufacturing and logistics, finance, engineering, and HR organizations in developing the best plan for the company.  

Create Continuous Flow Wherever Possible - eliminate the impediments to flow, reduce inventory and lead time to achieve maximum responsiveness.  

Use Detailed Planning Appropriately - use S&OP to provide distance vision, the MPS to provide a leveled schedule (heijunka), and material planning to project supplier schedules.  

Pull to the Customer Wherever Possible - base your execution systems on kanban pull concepts.  

Measure Performance Appropriately - develop KPIs that monitor performance to schedule (on time and in full to the customer, on time in pitch increments to the finishing schedule, on time against supplier deliveries, etc.), performance to key productivity measures (inventory productivity for example), and quality expectations.  

Pursue Perfection - don't stop.  

 

If you have specific questions about this article or want to discuss it with the author, call Chris Gray at 1 603 778-9211.

 

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