Sales & Operations Planning | Case History

CLIENT PROFILE

The company is one of the world’s largest designers, manufacturers and distributors of quality eyewear and sun wear and it specializes in premium fashion, lifestyle and performance brands.

The company employs more than 2,700 people worldwide in over 20 countries. Through an extensive global network of subsidiaries and distributors in more than 100 countries, the company makes its products accessible through a network of eye care professionals, optical stores and leading retailers.

CLIENT SITUATION

In an uncertain and volatile competitive environment, Top Management has needed to increase flexibility with respect to the changing market demand.

In particular, shared project goals are:

Decrease manufacturing Lead Time and stock levels
Improve service levels: quality and On-Time-Delivery

Reduce products cost by increasing Overall Equipment Efficiency of critical machines
Decrease new product Time-to-Market
Meet employee needs for improvement
Improve vendor performances
Implement a new organizational model in the new ERP (SAP) system

The main identified criticalities were related to the planning process:

The Budget/Forecast provided by the American headquarters was obsolete and lacking an organized review process
Not suitable Software Asset Management
Very long Lead Times on some supply chains and supplier reliability worsening quickly
MRP not implemented: release strategies for campaigns

Absence of a feasibility study on orders before release
Sales and Operations Planning not formalized with the American headquarters (capacity constraints, load variations, degrees of flexibility, …)
Non-integration of activities managed off-system
BOMs with excessive number of levels

OUR SUPPORT

The implementation of an integrated S&OP was one of the main activities carried out by Bonfiglioli Consulting to support the company in achieving its goal.

The S&OP foundation is to share and formalize the constraints on one hand of production processes; and on the other of the service levels expected by customers; finally, it establishes coordination rules between various Commercial, Planning, Production and Logistics departments.

The goal of the S&OP approach is to streamline production planning based on demand variability while ensuring production efficiency.

The implementation of an integrated S&OP has ensured feasibility, stability and reliability of Company medium-long term production plans:

Anticipating in MPS (Master Production Schedule) capacity requirements (Capacity Requirements Planning)
Scheduling resources in advance over a one-year rolling timeframe
Assigning the analysis and resolution of only the remaining critical issues to S&OP meetings

*Source: Knowledge Office Bonfiglioli Consulting

Thus, Sales & Operations Planning changed from being a PUSH to being a PULL model.

*Source: Knowledge Office Bonfiglioli Consulting

VALUE DELIVERED

With the support of Bonfiglioli Consulting, the company has successfully implemented a process to develop, update and share integrated cross–disciplinary Business Plans (Finance, Marketing, Sales, Product Development, Production, Procurement, Distribution – horizontal integration), sustainable along the entire value chain (Vendors, Production Plant, Distribution Centers and Customers – vertical integration) and in line with the company’s strategy.

In addition, the company was able to anticipate the analysis of production/procurement constraints by taking timely corrective action.

Lastly, a structured production data communication system based on objective data for production volumes per product family (material/production type) has been defined, introducing meetings for comparison and feedback on performance.

Goals achieved

– 57% Lead Time in manufacturing process

33% space recovered
-21% quality costs
-15% for new product development Time to Market: with OTD >75%
One “pilot” vendor -18% Lead Time in supplies, and OTD from 65% to 80%