Sales & Operations planning
Matching supply with demand in a simulation version
In this periodic (usually monthly) process, demand and supply are considered on an aggregate level. It starts with the creation of the requested (infinite) demand as perceived the market will absorb. Multiple demand scenario’s can be created for different market scenario’s. This requested demand is usually transferred to a simulation version where the supply plan is generated. In this way the required capacities and purchase volumes can be obtained without disturbing the ‘active’ planning. The supply teams (like production and purchasing but possibly also transportation) try to meet the requirements and where this is not possible, the Demand Supply Board needs to decide to either adjust the demand or arrange additional external supply or increase internal capacities.
From volumes to values and the link to operational planning
The result is agreement on the demand plan and the available production capacities and procurement volumes. The agreed demand expressed in volume like pieces or tons can be translated into turnover using the currency and price information from the ERP system. Finally, the agreed demand will be released to supply planning (active version).
