Operations and Supply Chain Management, 8th Edition

CHAPTER   14

Sales and Operations Planning

LEARNING OBJECTIVES

 AFTER READING THIS CHAPTER, YOU WILL BE ABLE TO:

• Appreciate the interface of marketing, finance, and operations in S&OP planning.
• Describe the monthly S&OP process and the importance of reconciling differences.
• Utilize various tools and techniques to adjust capacity and manage demand.
• Evaluate a demand scenario and select an appropriate S&OP strategy.
• Describe hierarchical planning and the process of determining available-to-promise.
• Determine overbooking, single orders, and fare class strategies for revenue management in services.

SALES AND OPERATIONS PLANNING AT VF CORPORATION

The hierarchical planning process at VF Corporation (producer of Lee and Wrangler jeans, and a variety of outdoor and sports-related apparel) begins with a 3- to 5-year long-range plan for building the capacity needed to support strategic growth objectives, followed by a 1- to 3-year mid-range plan for ensuring the availability of materials to meet demand, and a 12- to 18-month sales and operations plan (S&OP) for optimizing inventory and customer service levels. VF must balance the ongoing and seasonal needs of its customers for product availability (such as colorful jeans in the spring) with the costs of production and inventory.

The sales ...