2-Sales and Operations Planning The Supply Chain Pillar

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Production Planning and Control

ISSN: 0953-7287 (Print) 1366-5871 (Online) Journal homepage: https://www.tandfonline.com/loi/tppc20

Sales and operations planning: the supply chain


pillar

R. Affonso , F. Marcotte & B. Grabot

To cite this article: R. Affonso , F. Marcotte & B. Grabot (2008) Sales and operations
planning: the supply chain pillar, Production Planning and Control, 19:2, 132-141, DOI:
10.1080/09537280801896144

To link to this article: https://doi.org/10.1080/09537280801896144

Published online: 22 Feb 2008.

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Production Planning & Control
Vol. 19, No. 2, March 2008, 132–141

Sales and operations planning: the supply chain pillar


R. Affonso*, F. Marcotte and B. Grabot
Production Engineering Laboratory, Engineer’s National School of Tarbes, 47, avenue d’Azereix,
F-65016 Tarbes Cedex, France
(Received 1 December 2005; final version received 9 March 2006)

In the present ever-changing environment, sales and operations planning (S&OP) is a key process for providing
visibility to the enterprise. Besides, it supports a transversal decision process, which co-ordinates different
functions either in the company or between companies, in a supply chain (SC) environment. In the literature,
S&OP models are mainly focusing on sales, production and inventory. This paper proposes a wider S&OP model
built with three levels (sales, operations and supply). It provides a better support for integration inside the
company, but also for integration of the company in the SC. Some simulation results are presented, describing
the S&OP propagation along a SC, and the related collaboration requirements to be satisfied between the
networked companies.
Keywords: sales and operations planning; supply chain; collaboration; planning optimisation

1. Introduction and integrates companies along the supply chain,


Many companies are now facing an unstable environ- taking into account the autonomy of each company.
ment resulting in a short visibility of the market.
Consumer constraints are more and more important
regarding smaller quantities, higher variability, deeper
customisation, higher quality, shorter delivery and 2. Literature review
product life cycle. In this context it is important for Supply chain consists of a network of organisations,
companies to be able to change fast while keeping involved through upstream and downstream linkages,
overall efficiency. Overall efficiency is the purpose in the different processes and activities that produce
of integration and co-ordination intra- and inter- value in the form of products and services in the
enterprise. Thus, the interest in the field of supply hands of ultimate consumers (Christopher 1992,
chain management (SCM) has long been increasing Mentzer et al. 2000).
among researchers, consultants and managers. A characteristic of SCM is a successful co-ordina-
In the last few years, many changes have taken tion and integration of all the activities associated
place in the way companies are co-ordinated, moving with moving goods from the raw stage through to the
from a supply chain paradigm, where each company end user. Activities include systems management,
operates independently in its own self-interest sourcing and procurement, production scheduling,
using only locally available information, to a fully order processing, inventory management, transporta-
co-ordinated decision-making approach, in which all tion, warehousing, and customer service (Romano
information and decisions are aligned to accomplish 2003). Indeed, that co-ordination and integration
the global system objectives (Sahin 2005). characterise SCM is a vision shared by many authors
Therefore, many information technology (IT) (see, for instance, Christopher 1992, Lee and Ng 1997,
techniques and methods may be used to improve the Stock et al. 1998).
relationship between companies in the SC and to Malone (1987) defines co-ordination as a pattern
provide better sharing information, integration and of decision making and communication among a set
collaboration through the SC, resulting in new of actors who perform tasks to achieve goals.
requirements for inter-organisational co-ordination. Integration aims at breaking boundaries between
In this paper a model is suggested that co-ordinates company functions and between companies in the SC.

*Corresponding author. Email: [email protected]

ISSN 0953–7287 print/ISSN 1366–5871 online


ß 2008 Taylor & Francis
DOI: 10.1080/09537280801896144
http://www.informaworld.com
Production Planning & Control 133

The understanding of co-ordination mechanisms integration intra- and inter-companies, while keeping
can help managers in the decision-making process to their decision autonomy among the SC.
select the most appropriated action from a set of Sales and operations planning is a major planning
alternative solutions. Integration mechanisms can process that has an important integration power,
help them to define to what extent such action/ connecting different functions of the company
interventions should pass through organisational (marketing, financial, production, etc.) with various
boundaries between functions and between companies points of view, objectives and constraints.
(Romano 2003). The S&OP process supports vertical integration, in
Several studies have been performed providing relating strategic and financial plans to operational
different ways to better co-ordinate and integrate plans. It also supports integration between companies
companies across the SC. Chung (2005) proposes in the SC, simply linking the company’s commercial
collaborative planning, forecasting and replenishment department with the customer purchase service,
(CPFR) to integrate companies, developing and and the company’s purchasing department with the
monitoring business plans and forecasting between commercial department of the suppliers (see Figure 1).
partners. CPFR is applied in a context where the So the S&OP process (see Genin 2000) remains an
customer takes the product directly from the inventory integration pillar in the SCM.
store. It aims at a more precision in sales forecasts For these reasons, we have been interested in
and inventory reduction, but other members of the SC analysing a supply chain co-ordination and integration
are not directly involved in the collaborative through the S&OP. Such a study also provides
relationship. elements to structure the overall collaboration process
Eng (2005) suggests mobile SCM to extend both in the SC.
intra- and inter-firm business systems by enabling SC So this paper suggests an S&OP model that takes
participants to carry out business activities such as into account the influence between various functions in
online transactions performance, sharing and exchange a company, and the relations between companies in
of up-to-date information, providing customer service a SC. In order to illustrate the behaviour of the S&OP
on demand, managing logistics, transportation and process along the SC, some simulations have been
inventory levels. performed to analyse the collaboration requirements,
ERP (Kelle 2005), Portals (Carlsson 2004) and depending on a SC typology.
Internet (Garcia-Dastugue 2003) are also used as tools The paper is organised as follows: we first present
to co-ordinate companies in the SC. They manage an S&OP model. Then, a SC structure and typology
flows of business information, process and transac- is described, aiming at testing the S&OP behaviour
tions. These proposals are used in a centralised across the chain. In a third part are presented some
management of the SC. These research works mainly simulation aspects. Finally, we discuss some prelimin-
bring solutions on how to support collaboration, but ary results and perspectives of work.
provide less support on how to structure collaboration
process.
On the other hand, interviews of SC managers
3. S&OP: model proposal
show that SC actors usually have a poor visibility on
the internal process of their partner. Therefore, the 3.1. Model overview
supply chain management is often reduced to a peer- In the literature, most of the S&OP models focus on
to-peer relationship. Besides, the economical and the relations between commercial requirements (sales
juridical boundaries between the companies enable forecasts) and production resources (mainly capacity
managers to keep the autonomy of decision among oriented), where the differences are managed through
the SC. inventory projections. For instance, Table 1 illustrates
Some authors (Thomas 2000, Genin 2000) consider how the inventory at the end of a period is calculated
that the sales and operations planning (S&OP) is on the base of the expected sales, production plan and
a relevant process to provide co-ordination and inventory at the previous period.

S&OP in the SC
Sales Purchase Sales Purchase Sales
Company 3 Company 2 Company 1

Figure 1. S&OP in the SC.


134 R. Affonso et al.

Table 1. Classical S&OP model (Vollman 1997). Adjusted capacity: Represents the capacity taken into
account for a period, after an adjustment decision
Sales and operations planning based on the available flexibility.
M Mþ1 Mþ2 ... Operations plan: Represents the expected production
for a period, based on the adjusted capacity.
Sales plan 140 135 150
Production plan 145 145 145 Inventory: Represents the inventory of the previous
Inventory 15 25 20 period plus the inventory variation.
Initial inventory 10
Monthly cost: Represents the inventory cost, plus the
production cost and capacity cost (average capacity
The S&OP horizon covers at least the overall lead costs plus adjustment costs).
time (supply and manufacturing). The figures are Total cost: Represents the cumulated cost along the
distributed monthly (monthly period) and the units S&OP horizon.
are product families.
In this classical S&OP model, the main adjustment
Supply level
parameters are inventory and capacity. However,
the manufacturing and supplying constraints are Material inventory: Represents the inventory available
wider and should be taken into account for an efficient for manufacturing (raw material and purchased parts).
co-ordination of the enterprise functions. Supply plan: Represents the quantity to be supplied,
Also, among a supply chain, the relations between based on the production plan and on the material
companies and the constraints regarding the overall inventory.
process should be taken into account. For that The relations between these levels can be described
purpose, we propose an S&OP model which specifi- as follows: the sales plan will be built from the
cally describes the relations between sales, operations forecasts, and will be the input for the operations
and supply. Then, considering that the supplying level. At the supply level, the supply plan will be built
requirements for one company become the sales from the operations plan. Furthermore, to calculate
requirements for the upstream company in the SC, the S&OP, the lead time between each level must
it becomes possible to analyse the relations between be taken into account. It means that the supply plan
the companies, together with the constraints will be shifted from the operations plan of the
propagation along the SC, at the level of the S&OP. production lead time (see Figure 2).
The proposed S&OP model, based on three levels, These relations between plans are easy to integrate
is described below. in the model, as long as the lead time between two
stages is a multiple of the period (month). In the case
Sales level of a one month lead time, the quantity to be supplied
will be directly shifted one month period from the
Forecasts: Represents the gross value of the sales operations plan.
forecasts, in terms of product family per period, However, if the lead time is not a multiple of the
provided by the sales department. period value, the relation between plans is more
Variation: Represents, per period, the possible varia- complicated. The quantity to be produced from the
tion of the forecast, which characterises the forecast operations plan will be split between two periods.
reliability. For example, the supply requirements for one period
Sales plan: Represents the sales forecasts finally will correspond to a mix of the production
considered for the S&OP process.

Operations level
Forecasted workload: Represents the work load,
induced from the sales plan for each period.
Available capacity: Represents the amount of capacity
available for a period.
Flexibility: Represents the amount of extra capacity
(extra hours, subcontracting) for a period (addition of
workers, subcontracting, new equipment, etc.). Figure 2. Shifting between the S&OP.
Production Planning & Control 135

requirements of two periods. Then, a more important 3.2. Horizons


production requirement may be artificially smoothed The S&OP is usually based on a horizon of 12 to
among two periods for the supply (see Figure 3). Such 18 months. This horizon should be at least as long as
a mechanism may hide some demand perturbations, the budget, and should represent the inertia of the
and we must keep in mind these limitations in our long term adjustment decisions, except for large
conclusions. investments. As mentioned before, the S&OP horizon
In our model, for such a situation, we have must cover the whole manufacturing process lead
considered four weeks in a month, and decomposed time: supply, production and delivery.
the quantity per week. Depending on the adjustment capabilities, we
The S&OP model for a company is illustrated in consider three different zones in the S&OP horizon,
Table 2. In this example, the lead times shift is based usually mentioned at the level of MPS (master plan
on a one-month lead time for production (supply schedule). These three zones are:
requirements shift of one month), no lead time for
delivery being considered. The operations plan for one (1) Fixed zone: Zone where the company has very
period is deduced from the sales plan of the same little flexibility to manage demand variations
period. superior to 5 or 10%. It corresponds to a short
In a distribution process, delivery lead time could term horizon.
be introduced between factory and warehouses. (2) Flexible zone: Zone where the company has
some adjustment possibilities regarding the
demand variations, as long as it does not
M M+1 M+2 overpass 25 to 35%.
(3) Free zone: Zone where the company has the
Operations Plan X highest flexibility. It corresponds to the long
X
term part of the horizon.
Supply Plan
1 month
In any case, it is possible to use buffers in order
to increase the flexibility of the company. At short
M M+1 M+2
term level, inventories of finished products allow for
Operations Plan X the provision of very short term flexibility regarding
demand variations, but such flexibility will be
Supply Plan X
1,5 month
decided at the level of the S&OP very early. To
define these zones in a SC, we propose a lead time-
Figure 3. The lead time influence in the plans. based rule.

Table 2. Example of lead time influence.

Sales and operations planning

Jan Feb March April Legend


Sale level
Forecasts 200 200 400 400 Sales volume per month
Variation (%) 0 0 0 0 Possible variation on the sales volume
Sales Plan 200 200 400 200 Final sales forecast
Operations level
Forecast workload 90 90 180 90 Workload induce from the final sales forecasts
Available capacity 120 120 120 120 Average available capacity
Flexibility 20 20 20 20 Available flexibility (hours, days, weeks)
Adjusted capacity 90 130 140 90 Adjusted capacity
Operations plan 200 289 311 200 Production plan based on adjusted capacity
Inventory 20 109 20 20 Inventory
Initial inventory 20
Supply level
Material inventory 0 0 0 0 Components inventory
Supply plan 289 311 200 200 Components quantity to be supplied
136 R. Affonso et al.

Considering a SC with various independent com-


panies, the enterprise at level N  1 is the supplier of
the company at level N (see Figure 4).
Fixed zone at level N ¼ sup (production lead time
level N)
Within this zone, it is quite impossible to do significant
changes without perturbing the engaged production.
Such a zone is related to the capable to promise
concept, which is usually handled at the master
production schedule level. This zone is normally not
a decision area at the level of the S&OP, the purpose of
being to make long term decisions. Figure 5. Lead time propagation.

Flexible zone level N ¼ sup (production lead time level


N  1) ¼ fixed zone of level N  1
The flexible zone level N starts from the fixed zone.
4
In this zone, the company can adjust its planning,
1
but must take into account the supplier constraints.
The longest lead time should be considered among
the suppliers of the enterprise N. Again, the flexibility 5 1
is also related to inventory strategies along the SC.
Free zone level N ¼ S&OP horizon  fixed zone  Figure 6. Bill of material and production process.
flexible zone
These zones can also be defined according to the sales
forecast reliability. Generally, in the fixed zone, sales Four companies are connected to produce a table,
forecasts are quite reliable, but in the free zone they represented by the aggregated bill of material of
Figure 6. The following structure has been chosen to
have a certain degree of uncertainty.
combine several constraints: one company (Wood
The S&OP decisions are normally made in the free Company) has two customers (Top Company and
zone or sometimes in the flexible zone. The fixed zone Leg Company), and the Table Assembly Company has
only belongs to the MPS decision horizon, which two suppliers. However, the flow path is simplified,
should also cover most of flexible zone. The rules considering that each company is only involved in
presented above are very important in the context this SC.
of the SC. Actually, the propagation of the S&OP At the S&OP level, the relations between enter-
process across the SC means that the free zone of prises across the supply chain can be described
a downstream company may correspond to the fixed as follows: the Assembly Company S&OP will be
of an upstream company. Therefore, depending on the elaborated from the table sales forecasts. The supply
companies lead times, upstream companies have to plan, issued from the Assembly Company S&OP
pay attention to the zone propagation (see Figure 5). process will be the basis (together with the sales
forecast) of the elaboration of the S&OP of Top
Company and Leg Company, and so on.
4. Supply chain feature
To analyse the behaviour of the S&OP model we have
used an example of SC structure; simple, yet able to 4.1. Lead time
illustrate the problems mentioned earlier. The lead times for each company of the SC were
established in weeks, so that we can analyse the case of
lead times which are not a multiple of the period value
(month).

4.2. SC cost structure


In order to assess SC performance, we will analyse the
Figure 4. SC structure. cost in the SC (labour cost, adjustment cost when
Production Planning & Control 137

capacity is modified, and inventory cost). The labour industry, computer manufacturer, and so on. Most of
costs are fixed for the nominal capacity. The nominal the product value is added at the last stage.
capacity is the average capacity established to balance The second structure illustrates a distribution
the SC regarding its market perspectives. The adjust- network with the main company at the first stage of
ment costs are dependant on the labour cost (capacity the SC.
cost), on the amount of adjustment and on the S&OP Considering these two types of costs structure
horizon zone (adjustments performed at short term are (see Figure 8), we analyse different cases of the
more expensive than early adjustments). The more S&OP propagation, related to a demand forecast
important the adjustment is, the more important the perturbation.
related over cost is.
Then, we have established different costs ranges
related to the labour adjustment percentage and to the 5. Simulation
different S&OP horizon zones (see Table 3). Thus, it is 5.1. Simulation scenario
possible to represent in the model the difficulty that After defining the S&OP model and the SC structure,
companies have to manage demand variations, we have performed some simple simulations to analyse
depending on the visibility they have and on the the model, and the benefits of adopting collaborative
amplitude of the variation. approaches in the SC.
At each level of the SC, the cost of each product A preliminary simulation has been realised to
(wood, leg, top and table) will be based on the labour adjust the model parameters. In this context, we have
costs, adjustment costs and on the raw material costs. verified that (as mentioned in Section 3) in the case
The table costs are based on assembly costs, adjust- where the lead times are not a multiple of the period
ment costs and on legs and top costs. The costs of the value, some demand forecast perturbations were
top of the table will be based on top production costs, shared between two different periods. This effect
adjustment costs and on wood costs, etc. In the hides some capacity problems in the S&OP calculation
simulations, the inventory costs are considered as process. This is why we have decided to consider a one-
15% of the stored product cost. Regarding the overall month lead time only for the production steps
costs structure, there are different types of situations in the SC.
(see Figure 7).
In the first situation, the labour costs are higher in
the last company of the supply chain. Thus, the final
product cost is mainly added in the last company of the
SC. This type of cost structure is denoted here as
downstream added value.
In the second situation, the labour costs are higher
in the first steps of the SC. This type of situation will be
called upstream added value.
The first structure corresponds to a classical SC
product transformation, where the last company is
often the leading one: car manufacturer, aircraft
Figure 7. Cost structure.

Table 3. Capacity adjustment costs related to horizon zones.


Added Value
Capacity cost adjustment related to each zone
Product Cost
Cumulated

30
Adjustment Fixed Flexible Free 20
10
Cap.550% þ30% þ30% þ30% 0
50%5Cap.560% þ10% þ10% þ10%
Wood Top/Leg Table
60%5Cap.580% þ10% þ10% 0
80%5Cap.595% þ10% 0 0 Companies
95%5Cap.5105% 0 0 0
105%5Cap.5120% þ40% 0 0
120%5Cap.5140% þ40% þ25% 0 Scenario 1 Scenario 2
Cap.4140% þ60% þ35% þ25%
Figure 8. Graphic of the added value.
138 R. Affonso et al.

In order to analyse constraints propagation among (see Figure 9), it is more interesting to optimise the
the SC, we have considered one month on the horizon, S&OP in the downstream of the SC (Table 4). In this
where the sales forecast is significantly higher than the case, the collaboration does not bring better solutions
average forecast along the S&OP horizon. It means for the global performance.
that, in our model, the sales forecasts are constant, If the impulse, still in the free zone at the level of
except for one month, where there is an increase of the the table, is closer to the flexible zone on the horizon,
forecast (50%), always in the free zone. We call this so that the impact appears in the fixed zone or even
forecast increase of impulse. in the flexible zone for the Wood Company (see
Based on these assumptions, two parameters were Figure 10), the capacity adjustment is more expensive
adjusted: the month where the forecast perturbation if it goes over 5%.
appears at the Table Company level, and the cost In this situation, the inventory costs (weak at the
of capacity adjustment. This last parameter allows beginning of the SC) lead the Wood Company to
testing different levels of flexibility in the SC. More smooth the workload. The limits are reached when the
flexible is the company, less expensive are the adjust- wood company has not enough horizon to smooth the
ment costs. workload.
Depending on the impulse month for the down-
stream company (Table Company), the impact of this
impulse may appear in the flexible or even in the fixed 6.2. Scenario 2
zone for the upstream company, which is the Wood
In this situation (see Figure 11), we expected a better
Company.
SC performance with collaboration, but the conclusion
To analyse the benefits of collaboration in the SC
depends on the month when the impulsion occurs
at the S&OP level, two kinds of decision among the
(see Table 5).
SC were tested.
If the forecasted perturbation is far enough on the
. In the first case, each company makes and horizon (see Figure 12), the adjustments for all
optimises its own S&OP and transmits the companies take place in a zone where the costs are
results to its supplier in the SC. Such a local
optimisation is somehow against the SC
philosophy.
Scenario 1 Cost Graphic
. In the second case, the aim is to optimise the
30
local costs (sum of all the costs for all
Cost (€)

the companies) by adjusting plans all long 20


the SC. 10

In addition, two types of supply chains were analysed: 0


Wood Top/Leg Table
downstream added value (cost structure 1) and
upstream added value (cost structure 2). Companies

Inventory Cost Labour Cost

6. Simulation results Figure 9. Scenario 1 cost graphic.


6.1. Scenario 1
With an impulsion far on the horizon, the simulation
results (see Table 4) illustrate that, for the first scenario

Table 4. Scenario 1 – simulation results.

Scenario 1

Sales forecast Cost without Cost with


variation month collaboration (E) collaboration (E)
April 559 694
May 352 636
Figure 10. Example of S&OP propagation in a SC (1).
Production Planning & Control 139

Scenario 2 Cost Graphic Table 6. Scenario 2 (few flexibility) – simulation results.


20
15 Scenario 2 – few flexibility
Cost (€)

10
5
Sales forecast Cost without Cost with
variation month collaboration (E) collaboration (E)
0
Wood Top/Leg Table April 6652 4722
May 4493 1720
Companies June 2246 622
Inventory Cost Labour Cost

Figure 11. Scenario 2 cost graphic. Obviously, in this case, collaboration appears much
more interesting.
Table 5. Scenario 2 – simulation results.

Scenario 2
7. Conclusion
S&OP is considered as a very important tool to
Sales forecast Cost without Cost with co-ordinate and integrate companies in the SC.
variation month collaboration (E) collaboration (E)
However, when all information and parameters
April 5660 4722 needed to implement this integration are taken into
May 1672 1720 account, it becomes a complex subject, with several
June 419 622
rules to be clarified.
The proposed model was built with three levels
(sales, operations and supply). The purpose was to
formalise the upstream relations (supply plans) and
the downstream relations (sales plans) for a company
in the SC, at the level of the S&OP.
The simulation results have several limits, the main
one being that the simulation was performed on a
specific example (even if we have tried to be as generic
as possible when defining the test case). Building the
performance indicators we only focussed on costs,
and a simple cost structure was used. Customer service
was not addressed, while it is an important purpose
of collaboration in the SC.
Figure 12. Example of S&OP propagation in a SC (2). For the input, only a local forecast increase was
considered as ‘constraint’. We did not analyse the
collaboration in the SC to release other constraints
such as over load, down load, missing parts, specific
less important (free zone). Then, they lead the Wood customer requests, etc.
Company to smooth its own production and increase In our simulation, the companies have no capacity
the inventory (the inventory costs are always cheaper limitation, but only extra costs for capacity adjust-
upstream). ments. Finally, the optimisation during the simulation
If the forecast impulse for the assembly company was made manually. In spite of these limitations, this
is still in the free zone, but closer on the horizon, the work allows us to make recommendations to support
smoothing for the Wood Company becomes much SC control at the level of the S&OP.
more expensive (impact for the Wood Company in Considering the S&OP process as the SC pillar is
the fixed zone, see Figure 10). Then, the collaboration relevant as long as the three main sectors of the
provides better opportunities. company are taken into account: sales, operations and
All these simulations were performed with the supply. Then, it is important to define the rules to
flexibility costs shown in Table 3. In Table 6 we manage the time-phased requirements.
present the results of a simulation with no free The identification of specific horizon zones, such
adjustment possible in the SC, in order to illustrate a as time fences (frozen, slushy, liquid) usually used for
poorly flexible SC (important adjustment costs). the MPS (Wollman 1997), is also very important.
140 R. Affonso et al.

In our simulation we used the lead-time as the Notes on contributors


key parameter. Regarding the behaviour of the SC, it Roberta Affonso is a PhD candidate
appears nevertheless that these time fences should be at the National Engineering School of
defined according to the capacity adjustment con- Tarbes (ENIT), France. She gradu-
ated in Industrial Engineering in
straints of the whole SC. 2002 at the Federal Center of
Two parameters are proposed to handle this: the Technological Education Celso
lead-time required to adjust capacity and the adjust- Suckow da Fonseca (RJ), Brazil. Her
ment capability, in terms of amplitude and cost. research focuses on Supply Chain
Such study must be done at the level of the SC, and decision process modelling and
company co-ordination in the supply chain through the
not at the company level. collaboration.
This work also illustrates the limits of the
aggregated plans, especially in considering quantity
per period, instead of quantity per date. When the François Marcotte, Consultant,
lead-times are not a multiple of the planning period CPIM (Certified in Production and
(month, but sometimes quarter, semester, etc.), such Inventory Management), has been a
part time Professor at ENIT since
aggregated plans are artificially smoothing punctual 2001. After 15 years of consultancy
variations along the different stages of the SC. in production management, logistics,
Regarding collaboration among the SC at the level and supply chain management,
of the S&OP, the simulations showed that for a he is now a partner of the Hommes
& Production network and
downstream SC configuration, it is not obviously
provides courses in several high schools. His main research
advantageous to adopt collaborative approaches at topics are supply chain decision process modelling and
the level of the S&OP, as long as the added value continuous improvement approaches.
process is significantly growing from the first stage of
the SC to the last stage. This is currently the case in
aircraft or car industry SC. It is not the same for the Bernard Grabot is Professor at the
upstream SC configuration, where we have possible National Engineering School of
Tarbes (ENIT), France, where his
gains when the SC companies do not have a lot of main courses are production manage-
flexibility. ment and information systems.
Nevertheless, in this context, if we state that His main research interests are plan-
decisions at the S&OP level should be made on the ning and scheduling, supply chain
management, competence manage-
long term horizon (far from the flexible and fixed ment and ERP systems. Pr. Grabot
zones), then collaboration at this level is not the is the Deputy Editor in Chief of the IFAC international
systematically winning solution. An analysis of the cost journal Engineering Applications of Artificial Intelligence, and
structure and level of flexibility of the supply chain a member of two IFAC technical committees, ‘Cognition and
will in that case be necessary. Again, the control of the Control’ and ‘Manufacturing Plant Control’.
three zones will be a key parameter.
Two main perspectives are now under study. First,
we are applying these rules in a company involved at
different stages of an aeronautic SC. We are analysing References
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industry with the key parameters to be used in the enterprise resource planning decade: lessons learned and
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Chung, W.W.C. and Leung, S.W.F., 2005. Collaborative
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