S and OP – A Bridge Over Troubled Water

During the current financial climate, characterized by a drop in demand and increased uncertainty, companies must cut costs to survive and emerge stronger. One of the key areas that can be improved is the planning and coordination between sales and operations divisions. The risks and costs involved in making wrong decisions are higher than ever, and better planning is required.

The S&OP (Sales and Operation Planning) process is defined as a collection of organizational processes whose goal is to achieve maximum profits for the organization through coordination between sales and operations divisions.

The S&OP Process Creates Balancing Between Demand & Supply

In a 2006 survey conducted by international research company Aberdeen (The Sales and Operations Planning Benchmark Report, Aberdeen Group) of 200 companies in a variety of fields around the world, 70 percent of them said they were improving their S&OP processes,. The survey found a correlation between implementation of S&OP practices and the organization’s business and operational performance.

The most prominent characteristic of leading companies (best in their class) is the transition from “tactical” practices, which usually suffice with meetings to coordinate sales and operations, to “holistic” practices, which look at the organization’s bigger picture and work according to a bigger picture of demands. This bigger picture is especially important today, when organizations are becoming more global and the span of control is becoming wider.

The holistic approach refers to a person or a company as a “whole”; it requires a broader look at all internal and external factors (emotional, physical, social, economical, environmental, etc.) The basis for success in an S&OP process is built on four foundations:

1. Management commitment: The key success factor is the commitment of senior management to the process. Many companies have failed because they did not receive management’s support and acknowledgment for the importance of the process. A primary tool for achieving commitment and ensuring the success of the process is appointing someone to supervise the process – a senior manager who receives direct responsibility and authority for implementing the S&OP process. This person is usually from the supply chain, but this is not a requirement.

2. Creating a uniform and agreed database (one number). Without agreement on numbers, there can be no orderly discussion of meeting demands.

Rani Sagiv, Nestle Israel’s vice president for overseeing its supply chain, which manages 2,500 products for thousands of customers, calls the process Consensus Demand Planning. “Agreeing on basic numbers is the key to an effective process,” he says. “Before creating such a process in collaboration with global Nestle, we wasted a lot of time and energy agreeing on the right numbers.”

But achieving agreement on the numbers is not enough: To deal with changes in demand, optimistic and pessimistic scenarios must be anticipated. For each of those scenarios, a collection of responses should be prepared, including backup plans that shorten the response time. These scenarios also include addressing the product’s life cycle. This process allows a more holistic vision of the change in the KPIs (Key Performance Indicators) and their effect on the entire supply chain. In many cases, there is the tendency to waste a great deal of time gathering information, when most of the information is not critical to the decision-making process. The company should focus only on information that can be used to make decisions (turning information into knowledge). The 80:20 rule is especially important when analyzing demands.

The use of designated information systems should be implemented. There are a number of such systems on the market, the leading ones being Oracle’s Demantra and SAP’s APO. This type of system interfaces with the existing ERP system and provides a bigger picture of all functions and saves the use of Excel tables that usually create a cumbersome and non-standardized process.

There are also designated systems for optimizing links in the supply chain. For instance, there are systems that perform optimization of raw material and product inventory based on the required service level (such as ToolsGroup DPM). These systems are based on statistical analysis of historical data combined with forecast data; they enable a quicker and more precise decision-making process, eventually leading to reduced inventories throughout the entire supply chain. The Dixon Company, a seller of computer equipment (over 64,000 SKUs), implemented this type of system and achieved a significant reduction in inventory while maintaining the required service level.

“In two weeks we were able to reduce stock breaks in stores by 50% and by 35% in the central warehouse,” said Alejandro Esposito, a Dixon Group systems manager.).

3. KPIs: As with every process, KPIs are the key tool; they allow us to examine performance and measure success over time. The key customary KPIs are:

a. Demand Planning Accuracy (DPA). This measures the level of forecast accuracy. The calculation is based on measuring the absolute percentage of deviation weighted on the product level between forecasts and actual sales. Measurement of absolute deviation determines that a situation of sales beyond forecast is also undesirable over time. Companies implementing high levels of S&OP processes usually reach an accuracy percentage of 85% over time. “The very fact that the sales division is measured by parameters that affect the entire supply chain created a balance in management meetings. Suddenly, everyone realized it was not only the operations division that was affecting the flexibility and stability of the chain,” said a supply chain deputy manager for a Romanian consumer goods company.

b. Master Scheduling Accuracy (MSA). This measures the correspondence between the manufacturing plans and actual manufacturing. The calculation is based on measuring the percentage of absolute deviation weighted on the product level between the manufacturing amount planned and the actual amount manufactured. This parameter is an indicator of the extent of changes to the manufacturing plan throughout the week and month.

c. Out of Stock. This measures the percentage of products that were (at a certain point in time or on a periodic average) under the predefined level. During the S&OP process, minimum required levels of inventory should be determined by weighting historic data, storage and logistic constraints, and the required level of service for the customer and product.

d. Order Fill Rate. This is the percentage of orders supplied in full and on time. This is a strict parameter that assumes that any order that was not completely filled, even if supplied on time (or vice versa), compromises the level of service.

For each parameter, a quantitative goal should be defined at the beginning of the process. The goal will usually be based on the baseline plus a certain percentage of improvement and updated as needed. The calculation method should create maximum transparency between the various functions.

“The actual measurement, even before making any changes to the process, led to an improvement of 10% to 15%,” said the supply chain deputy manager for a Romanian consumer goods company.

4. Management Routine: The S&OP process must be based on a series of forums and meetings at regular intervals and with predefined agendas. Creating designated processes increases the commitment to the process. Predefining the agenda allows for short and purposeful meetings. Endless discussions that go on into the night do not contribute to the employees’ motivation to implement the process. S&OP meetings with a predefined agenda can be very short and purposeful, which increases the efficiency of the decision-making process.

“Our management routine enables better control of the process implementation,” says Rani Sagiv, “and is an efficient tool for communicating the improvement in the business results achieved throughout the process.”

The S&OP process is a collection of reality-driven processes, without which companies would have a hard time growing over time while maintaining their operational flexibility for changes in the business environment. In these times of uncertainty, we cannot suffice with the correlation between supply and demand and with using the tools that we have used so far.

Implementing S&OP processes can build the necessary infrastructure for the company to exit the crisis quickly and create a significant competitive advantage with minimum exploitation of resources. Proper implementation of the method and adhering to a number of simple principles can sometimes constitute the difference between survival and failure, which is crucially important today.

Climb the Safe Way with PASMA Training

Advent of urbanization marked the beginning of high structures like mobile towers and bridging units. Working at such heights is as dangerous as exciting it sounds. Prefabricated Access Suppliers’ and Manufacturers’ Association (PASMA) brings to this industry training courses which equip and update individuals working in these areas. As a budding professional in this arena, you get to train and learn under subject matter experts who give you a larger perspective apart from the course curriculum. Read on to know more about PASMA training and its different aspects.

How Does PASMA Equip You?

One of the primary subjects of learning from this course is the best practices to be followed at heights. This is vital to guarantee your safety as a technician and boosts your comfort level on high towers which improves your productivity manifolds. Regulations regarding working at heights and discerning unsafe situations are a part of this training. Apart from this they also impart tips on safety equipments and right storage practices.

Teaching fall protection principles and equipping you for potential risks are among the important modules of these courses. Risks or hazards may come along due to a number of reasons like high speed irregular winds or falling objects. Presence of mind and knowing what to do next are two factors which are essential to save your life and protect you against crippling injuries. This is what PASMA does for you. It trains you to be productive and safe however high you are standing.

Benefits of PASMA Training

PASMA is a pre-requisite for most of the jobs in this arena. With this certificate along with IPAF training you get a free pass to apply and begin work with reputed companies in this segment. It proves your competency and potential to serve a firm in the best manner. Apart from this, with PASMA you are now knowledgeable to test the safety equipment used and understand the different requirements of your on-site profile. At this point you are ready to work as an operator or supervisor who is equipped to work the safe way.

Steady career progression is another key benefit that this training provides you. Once done with the training, there will be nothing that inhibits you or your firm from promoting you to more responsible roles. In-depth understanding of the subject makes you a perfect fit to be an employee in command. From operator to supervisor and then to manager, you will be able to glide through these phases hassle free.

Scope for Specialization Courses

PASMA brings to you a range of courses suited for different requirements like low-level access and towers. The courses contain theory and practical lessons which makes the learning more literal and close to real work. Most of these courses are completed in a day, which makes it convenient and easy to be planned for working individuals as well. You can choose to take the specialist training depending on your area of work.

The world is full of limitless opportunities; make the best use of them with the right set of trainings and qualifications. Stay updated with PASMA training and be sure to stay safe on higher planes.

What To Consider When Choosing Between a Compact Digital Camera or a Bridge Camera

Over recent years there has been an explosion in the range of digital cameras. Although there has been a move away from ‘traditional’ type of compact cameras and Digital Single Lens Reflex (Digital SLR) with the industry appearing to focusing a lot of development ‘compact system cameras’ (bridge camera). This has made it even harder to decide which digital camera is the best for the average consumer.

The principle behind most compact system cameras is the same as that of a Digital SLR, with the benefits of relatively large sensors and interchangeable lenses, but coupled with the portable nature of the advanced compact cameras. These cameras are designed to deliver a high standard of functionality and image quality in a relatively small and inexpensive camera body.

This opens the market for manufactures, to first-time users demanding a reasonably priced way of attaining high-quality images, through to the enthusiast who may not wish to carry around a heavy Digital SLR body and collection of lenses for a day’s shooting or for whom the price of a pro Digital SLR would be prohibitive.

Although, for myself I would opt for the functionality and image quality of compact system cameras, are these really the best option for everyone?

Compact cameras

Compact cameras are designed for the less demanding and occasional users and are good for family and holiday snaps. Supplied with ‘smart’ and ‘intelligent’ technology, compact cameras are ideal for those happy to leave all the decision-making to the camera rather than themselves, but also allowing some degree of control when needed. Ironically these cameras can often be the most difficult to choose between due to the vast array of models from a huge number of manufacturers.

Pixels

Many of today’s digital cameras contain a larger sensors than in the past, incorporating between 8-16 million pixels (Mp). This comfortably meets and surpasses the requirements of most digital camera users today for taking family photographs and holiday snaps.

While a greater number of pixels can be beneficial in good light, this can also have a negative effect on image quality when you use camera’s light sensitivity or ISO settings to the maximum when photographing in low light conditions.

This doesn’t mean you should avoid digital cameras with the a high number of mega-pixels, but that your decision regarding the digital camera that would most suit your needs should take into account both quality of the image sensor, number of mega-pixels, ease of use and the quality of the lens. Lens quality and sensor quality are two guiding factors that should always be at the forefront of any decision when considering the type of digital camera, model and manufacturer, you wish to purchase.

If you do plan on buying a simple compact camera, and you’re likely to be using it in a range of lighting conditions, lookout for those which use a ‘backlit’ sensor, as these tend to capture images with less noise (noise is the colour distortion caused by low light conditions where your digital camera is trying to compensate, this grainy and spotted appearance may spoil what would otherwise be a nice photograph) and with a greater dynamic range. As the technology improves manufacturers are incorporating this feature in to a greater range of models. Nevertheless it is worth enquiring prior to purchasing your new camera.

What lens?

As previously mentioned the quality of the lens is of real significance of when considering which camera to purchase. It is advisable to find a camera that has a range of the lens, as this will determine how suitable it is for different subjects and situations. I would advise that when purchasing a new camera body you choose a short zoom lens with arrange between approximately 24 mm to 70 mm. Of course it is likely that as an initial purchase, the camera will come as a ‘lens kit’, where the camera body lens come boxed together.

Many manufacturers equip their digital cameras with an image stabilisation system. If possible look for cameras with either lens or sensor based image stabilisation, particularly if you’re looking to buy a camera with a relatively long zoom. This will help maintain a higher standard of image quality in lower light conditions.

Viewfinder

The many compact cameras have an optical viewfinder but not all do. These are linked to the optical zoom of the camera and operate in relation to the lens, and are useful for photographing in bright light when LCD screens become hard to view. Optical viewfinders are found on higher specification compacts such as Canon’s G 12 or Nikon’s P 7000.

Only Spend What You Can Afford

It is easy to be convinced by glossy brochures and slick sales patter to part with more money than you can reasonably afford when purchasing a digital camera. But if you have a little more money to spend; what camera should you be looking for and what are their benefits? A more expensive compact camera may provide a better quality sensor and a better quality lens, which together help improve the quality of the digital photographs you shoot. They may also offer manual control over exposure for when you are more technically proficient, and you may have the facility to shoot in raw, a shooting mode which will give you a more information recorded on to the digital image allowing greater flexibility when processing the image in programs such as Photoshop. Moreover, higher specification models are likely to have a superior LCD screen to those on cheaper cameras, which will not only provide greater clarity but will also be easier to view in bright and sunny conditions.

If you require a larger zoom range, you will defiantly want to consider a bridge camera. These combine expansive optical zooms with manual exposure options, which together provide control similar to a DIGITAL SLR.

Alongside higher quality LCD screens bridge cameras tend to incorporate electronic viewfinders with around 230,000 dots of resolution, although the performance of these varies wildly between models so it’s worth considering this before coming to a decision regarding any particular model. These viewfinders also have the added benefit of displaying much of the information found on the camera’s LCD screen, which allows you to view and change camera’s settings without the need to take the camera away from your eye.

While the results from a bridge camera generally are not as good as that of the quality of a Digital SLR, what you lose in quality you gain in portability and convenience in a small and inexpensive camera body. Various cameras now have articulated LCD screens and HD video recording, and as previously mentioned some even offer a raw shooting mode.

Compact and bridge camera summary

In summary, if you have about 300 – 400 to spend and you want something pocket-sized yet capable, look out for a model with a healthy range of manual control, an LCD screen with at least 460,000 dots and ideally a backlit sensor. But before you do that, consider whether you’d be better off with a compact system camera (bridge camera). This will give you greater flexibility and better general image quality.

Perhaps another consideration is the future of your photography, and what you wish to achieve as a photographer. If you are considering simply taking snapshots then a compact camera is perfect. However if you wish to begin to move towards being a photographer who is more technically proficient then the flexibility of a bridge camera would perhaps be more suitable for your requirements.