Academic journal article The Journal of Business Forecasting

Implementing a Sales and Operations Planning Process at Sartomer Company: A Grass-Roots Approach

Academic journal article The Journal of Business Forecasting

Implementing a Sales and Operations Planning Process at Sartomer Company: A Grass-Roots Approach

Article excerpt

Contrary to common practice, the S&OP process at Sartomer was implemented successfully without much involvement of Executive-Level Management ... one of the strengths of this organization is the ability to form a team without a mandate from the top ... shows what should be reviewed before implementing an S&OP process.

The implementation of a Sales and Operations Planning process is typically performed using a topdown approach. After obtaining abuy-in or a mandate from the organization's Executive Management, the implementation team is charged with that mission, which was not the case at Sartomer. Here we used a grassroots approach in implementing the S&OP process. Team members were empowered to take such an initiative.

BACKGROUND

Sartomer Company is a global supplier of acrylate/methacrylate monomers, oligomers, hydroxyl-terminated polybutadiene resins (HTPB), functionalized polybutadiene resins, styrene maleic anhydride resins, and other specialty chemicals used in applications such as coatings, inks, adhesives, sealants, optics, composites, elastomers, and electronics. Sartomer products are an integral part of end uses such as hardwood flooring, rubber hoses, wire and cable coverings, printing plates, golf balls, compact disks, package coatings, furniture, printed circuit boards, and eyeglasses.

Sartomer Company, headquartered in Exton, Pennsylvania, has manufacturing plants all over the world. The Cray Valley Division of Sartomer, which manufactures UV/EB (ultraviolet/electron beam) products, is located in Paris, France. Its products are marketed through a direct sales force in the United States and through distributors in South America, Australia, and Asia.

This article describes how the owners of the demand management and production planning processes were able to implement the S&OP process at the "grass-roots" level, and started reaping its benefits. It also explains why the recent implementation of a core forecasting process was critical in the success of this process. The S&OP outputs, most especially output related to supply-demand, are now used efficiently and effectively throughout the organization for making decisions.

WHY S&OP PROCESS?

This interesting question came to my mind while writing this article. It all happened in 2003 when we finally realized that we had to take our supply chain processes out of dark ages. We had to have an effective and efficient process to ensure that the plan of Sales and Marketing Group is synchronized with that of the Supply Chain and Operations Group, and that the plan, among other things, focuses on overall strategic goals. For some time, both groups had been exchanging their thoughts about the S&OP process: but I must confess, most of the thoughts at that time seemed to be more concentrated on why this process would fail rather than on what we could do to make it work.

The turning point was when we started thinking why we needed it and what we would like to achieve with it. We came up with a wish list:

* To eliminate all stock-outs for make-to-order and make-to-stock items for key accounts.

* To have a minimum service level of 99.9%.

* To keep inventory levels within agreed-upon limits.

* To find a better way to manage shortages of critical raw materials because of surging global demand.

* To manage customer demand variations without sacrificing the customer service levels.

* To reduce the threat of increasing competitive activity by leveraging our services as we are not the low-cost provider.

* To have a process that adds value to our customers.

S&OP PROCESS IN HISTORICAL PERSPECTIVE

The S&OP process that we have today did not happen overnight. Its seeds were sown as far back as in 2003. To achieve the success we have now, we implemented many core fundamental supply chain processes between 2003 and now by using various outside sources including APICS, Supply Chain Council, CSCMP, and IBF. …

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