Next Generation of S&OP Schlegel
Next Generation of
S&OP: Scenario Planning with Predictive Analytics
& Digital Modeling
By Gregory L. Schlegel and Peter Murray
E X E C U T I V E S U M M A R Y | Although the Sales & Operations Planning process presently lies at the center of our business, businesses have yet to take full advantage of it. This article describes what is missing in our process; in particular, how to deal with uncertainty, complexity, and risk using scenario planning through probabilistic planning, predictive analytics, and “what if” simulation.
G R E G O RY L . S C H LE G E L | Mr. Schlegel is VP Business Development for SherTrack LLC, professor of supply chain at Lehigh University, and Past President of the APICS organization. He has served as a supply chain executive for several Fortune 100 companies, including IBM.
PE T E R M U R R AY | Mr. Murray is Global Supply Chain Development & Innovation Leader of E. I. du Pont de
Nemours and Company and has implemented demand management across DuPont’s 14 strategic business units. He is currently on the APICS board of directors.
T
hose who have been in the
areas convene to gain consensus. In
continues to be an opportunity for
operations/supply chain management
the best practice we integrate plans
improvement for many organizations,
arena for a good portion of their
from functions across the business and
especially for manufacturing-centered
professional careers know very well that
operationalize corporate or business
businesses.
the Sales & Operations Planning (S&OP)
strategy and policies for execution.
process lies at the center of our business
However, despite significant investment
because it is where disparate functional
over the last 30 years, the S&OP process
As a business planning process, S&OP is used to balance the supply of products with the demand in congruence with
20
Journal of Business Forecasting | Fall 2010
business strategies and the
S&OP: Scenario Planning with Predictive Analytics
& Digital Modeling
By Gregory L. Schlegel and Peter Murray
E X E C U T I V E S U M M A R Y | Although the Sales & Operations Planning process presently lies at the center of our business, businesses have yet to take full advantage of it. This article describes what is missing in our process; in particular, how to deal with uncertainty, complexity, and risk using scenario planning through probabilistic planning, predictive analytics, and “what if” simulation.
G R E G O RY L . S C H LE G E L | Mr. Schlegel is VP Business Development for SherTrack LLC, professor of supply chain at Lehigh University, and Past President of the APICS organization. He has served as a supply chain executive for several Fortune 100 companies, including IBM.
PE T E R M U R R AY | Mr. Murray is Global Supply Chain Development & Innovation Leader of E. I. du Pont de
Nemours and Company and has implemented demand management across DuPont’s 14 strategic business units. He is currently on the APICS board of directors.
T
hose who have been in the
areas convene to gain consensus. In
continues to be an opportunity for
operations/supply chain management
the best practice we integrate plans
improvement for many organizations,
arena for a good portion of their
from functions across the business and
especially for manufacturing-centered
professional careers know very well that
operationalize corporate or business
businesses.
the Sales & Operations Planning (S&OP)
strategy and policies for execution.
process lies at the center of our business
However, despite significant investment
because it is where disparate functional
over the last 30 years, the S&OP process
As a business planning process, S&OP is used to balance the supply of products with the demand in congruence with
20
Journal of Business Forecasting | Fall 2010
business strategies and the