January 28, 2019 –
Renewed interest in the untapped potential of a management tool is transforming the way companies approach day-to-day business. Although sales and operations planning (S&OP) has been around for decades, it's gaining fresh momentum at Tobyhanna Army Depot.
A cadre of management experts here are learning to look at supply and demand information differently. To communicate with higher headquarters and customers earlier in the planning process to identify requirements and have smarter conversations to meet the needs of the warfighter.
"The goal of sales and operations planning is to forecast out two years, which runs parallel with how we build our budget," said Caleigh Pedriani. "The more fidelity and confidence you have in your forecast, the easier it is to make better decisions."
Pioneers in the field describe S&OP as a senior management decision-making process that ensures the tactical plans in all business functions are aligned and support the business plan. In other words, S&OP is about piloting daily operations and monthly plans toward the company's long-term business goals. It's about getting everyone headed in the same direction - including manufacturers, suppliers, distribution partners and customers.
Benefits include greater visibility of the demand (work received or the requirements for the work) and supply (number of people and amount of equipment needed to do the work) across the enterprise, improved inventory management, increased accuracy in budget forecasting, and an improved product lifecycle management process.
"Our success is based on an effective sales and operations process that integrates the pre-planning, execution and sustainment of Army readiness among all stakeholders, to include higher headquarters, Tobyhanna and DLA Distribution-Tobyhanna," said Patrick Esposito, Production Management Directorate director. "There is no doubt our implementation of these processes opened the lines of communication with our headquarters, resulting in a collaborative planning effort that has prepared the depot for the significant increase in workload in fiscal 2019."
Implementation of a more formal S&OP process across the enterprise was directed by Army Materiel Command in 2018. Tobyhanna's Production Management Directorate, the lead component here, relies on input from everyone on the depot.
"Three of us are leading the effort, but it incorporates the entire depot," said Barry Wood, master scheduler. "I focus on the demand in the shops and then match the supply to meet the needs of the customer." Wood consults with supervisors and leaders about staffing issues or problem areas to help depot directorates determine how many people are needed to accomplish the mission this month, in three months, in six months and the next year.
Ed Gliniecki helps get work scheduled at Tobyhanna Army Depot. The lead management analyst gathers information from customers who have loaded data into the logistics modernization program database.
"When I do my demand review, I usually look ahead two years," Gliniecki said. "If we can study projects a number of times before plans are set, we can have a better, more reliable schedule."
Regularly scheduled meetings attended by personnel at all levels are crucial to the success of S&OP, according to Pedriani, Gliniecki and Wood. Each remarked on the importance of engaging people to play an active role in the process of scheduling work at the depot.
"This method starts the conversations earlier in the process," Pedriani said. "S&OP gives us the opportunity to meet with the customer prior to budget locks to review requirements and more accurately forecast when we can meet them."
Last year's job fairs were a prime example of S&OP in action. Data gathered by team members was instrumental in helping leadership determine hiring needs for future workload.
Officials have also noticed a change in the distribution of funds.
"The process can be used to forecast funding to receive it in a timely manner," said Pedriani. "We've been communicating our requirements since July and have surpassed in the first month what was forecasted for the first quarter. That's a win."
The S&OP is a different way to look at how Tobyhanna Army Depot has always done things. A process that coordinates different areas of the business to meet customer demand with the appropriate level of supply.