Home > Sales and Operations Planning (S&OP) Project Abstracts

S&OP Implementation for Importing Distributor (Horizon Hobby)

Horizon designs, manages the manufacturing, and distributes high-end radio-controlled planes, cars, locomotives and boats. Their sales increased dramatically during the 2020 pandemic while experiencing significant supply chain disruption. In addition, they plan to triple sales in the next 5 years.

  • Developed demand planning and production planning functions to prepare for S&OP
  • Implemented Lean Process Improvement in various office functions to ensure information flow to the S&OP process is streamlined
  • Implemented S&OP process on two pilot product families
  • With the knowledge Horizon Hobby learned from Supply Velocity, they were able to on-board all product families to the S&OP process, on their own

Results

  • Improved forecast accuracy
  • Increased visibility into supply chain disruptions and potential impact on inventory levels
  • Added new item process to S&OP, ensuring there is room in the distribution network and the company can deliver to customers on the launch date
  • Increased alignment between Operations and Finance on the plan and its risks

SI&OP Implementation for Capital Equipment Manufacturer (Terrasource)

Terrasource manufactures mining equipment and parts. A significant portion of their sales are for replacement and repair parts. They were losing sales because of not having the finished goods or raw materials to meet customer leadtime requirements.

  • Developed a model for classifying all finished goods inventory items based on multiple criteria to align sales, finance and operations on what should be stocked and appropriate service-levels
    Worked with Optimal Velocity to create a customized forecast model to predict demand for each SKU 9 months in the future
    Used forecast model plus what sales reps are quoting to finalize forecast
    Used forecast, forecast error and safety stock service level to calculate reorder points and reorder quantities
    Implemented Executive SI&OP to align inventory levels and supply planning with the forecast model and sales rep quote activity

Results

  • Every month, as part of the S&OP process, the company places “bets” to pre-buy inventory or supply chain capacity which resulted in a $1 million sale in the first quarter S&OP was in place
  • Finished goods inventory levels are in-line with target service level percentages