Sales and operations planning for lean manufacturers

Weekly heijunka schedules and kanban containers are the primary production planning and control mechanisms to meet this operational goal These short-term scheduling mechanisms are frozen for an extended period of time, establishing a stable production boundary for a smooth constant mix of product output to meet market demand without excess inventory and spare capacity Although thisjust-in-time production method can adapt to minor demand changes for product variety and volume on a short-term basis within the defined production output boundary it fails to adjust and accommodate market demand increases beyond these narrowly specified limits, One potential reason lean production systems cannot respond to variety and volume demand increases is that they lack a strategic long-term resource and aggregate production planning approach. lean systems are tactically oriented with a short-term process focus on operational flexibility with efficient production execution that performs well in stable, relatively predictable market environments. Manufacturing operations are ultimately responsible for executing S&OP, yet accounting, human resources, finance, sales and marketing, engineering and other stakeholders are essential to the planning process. [...]manufacturing organizations can subcontract with other firms for additional product volume, The standard market changing levers to limit demand to match supply are to permit product stock-outs and back orders when orders are placed but cannot be satisfied on time; implementing discount pricing, advertising and sales promotions will raise demand to meet output S&OP brings challenges to lean production systems when basing market demand forecasting on dynamic business conditions. S&OP is an external strategic level, future-focused process aimed at obtaining expensive resources to match supply and demand over the long term; lean systems are tactically oriented internal processes that concentrate on meeting short-term demand. Because lean systems are designed to execute pull production based on actual short-term demand, they fail to predict and respond to significant product volume and variety increases, resulting in inadequate capacity to meet demand.