Agile and Efficient Sales and Operations Planning

The Customer 

The client is a global pharmaceutical company founded in Italy, specializing in the research, development, production, and distribution of innovative therapeutic solutions.

 The Challenge

The client faced a critical challenge in managing Sales and Operations Planning (S&OP) due to a misalignment between demand and production capacity. The initial system, based on an infinite capacity logic, failed to effectively manage production flows concerning actual production capabilities, leading to inefficiencies and delays.

Specifically, the production planning process was structured in such a way that the system collected market requirements and, without any capacity constraints, generated production or procurement proposals. This approach caused overloads during peak demand periods, requiring continuous manual interventions by the supply planning team to redistribute production loads and anticipate potential issues. The manual management of production redistribution across weeks and resource saturation was burdensome and not scalable. The company had to find quick solutions to avoid failing to meet market demand, such as anticipating production or maintaining additional stock.

 The solution & the benifts

To address this issue, the client decided to integrate the SAP Sales and Operations Planning module with its ERP system, aiming for better alignment between infinite (market) and finite (production) capacity.

The adoption of standard algorithms that automatically perform leveraging (level adjustments) enabled the optimization of production loads, generating feasible proposals that users can manually adjust only when necessary, such as when demand exceeds production capacity.

With the introduction of predictive "what-if" simulations, the implemented system allowed the exploration of alternative scenarios, such as outsourcing production, adjusting work shifts, or modulating demand. These simulations helped make more informed and timely strategic decisions. Additionally, the integration between supply planning, sales, and finance departments made the S&OP process more collaborative, ensuring a shared evaluation of decisions and scenarios during S&OP meetings.

The benefits of these optimizations are clear:

1. Improved operational efficiency, with reduced manual interventions and more precise production planning.
2. Increased agility in responding to demand fluctuations through simulations and automatic optimization.
3. Better alignment between business departments, enabling faster and more coordinated decision-making.
4. Enhanced risk anticipation and adaptability to market dynamics.