Strategic planning through the S&OP process
The functioning of an organization is initiated with the strategic planning process. There are two approaches to strategic planning – ‘top to bottom’ and ‘bottom to top’. This is followed by Sales and Operations Planning (S&OP), which helps connect strategic planning with manufacturing planning and execution.
The S&OP process yields multiple benefits like stable production rates, and higher customer service levels. It is succeeded by the detailed level production planning process, comprising Master Production Schedule (MPS) and Material Requirement Planning (MRP).
While MPS drives all detailed manufacturing activities to meet output objectives, MRP triggers the process of procurement of the items from suppliers and the manufacturing of the items produced internally.
MRP is followed by distribution and logistics, supported by the system Distribution Requirements Planning (DRP).
The process of manufacturing, however, is undergoing transformation due to forces like the Internet of Things (IoT) and Analytics. These technologies will overhaul the way organizations are used to managing different functions.