S&OP + Process Improvement – Horizon Hobby

PROBLEM / CHALLENGE

Horizon designs, manages the manufacturing, and distributes high-end radio-controlled planes, cars, trains 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.

IMPLEMENTATION DETAILS: SALES & OPERATION PLANNING

• 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
• Taught the Planning Team how to properly use their forecasting software, Logility, and integrate it in the S&OP process

DIFFICULTIES ENCOUNTERED

• During the assessment of the business, we determined that the current demand planning and supply planning processes were not clearly defined and effective enough to support a new S&OP process.
• As a result, we started the project with process improvement for these areas before developing the S&OP process.
• The sales team did not have any input into the forecast. After working to encourage their support, we focused on the analytical algorithmic forecast to support planning.
• The business continued to grow throughout the project and outgrow its current warehouse footprint. This resulted in changes to planning based on where products would be stored.

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