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The possibility of combining the processes S&OP and CPFR in the framework of the full cycle of integrated planning in the supply chain

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MAGAZINE №5 (64) October 2014

AUTHOR ERMOLINA M.V.

CATEGORY Modern concepts and technologies in logistics and supply chain management Planning the supply chain Logistics integration and coordination

ABSTRACT

One of the major supply chain management problems is uncertainty that impacts both demand and supply sides of the chain. Current integrated planning practices offer their tools to decrease this uncertainty from the enterprise as well as from the whole supply chain view. That is why examination of possible integration of two such practices – namely, sales and operations planning (S&OP) and collaborative planning, forecasting and replenishment (CPFR) – into a single end-to-end planning and execution cycle may be of some practical interest. To do so major characteristics of both processes are compared and possible junction points are determined. For example, a sure strength of CPFR is in the well addressed cycles of collaborative operational planning and execution, alongside with strategic planning outline; while S&OP provides an efficient tactical planning tool. S&OP develops internal enterprise planning cycle, while CPFR allows to include there additional information about future possibilities and constraints. After defining junction points different approached to the implementation of the proposed end-to-end process are discussed: from the strategic level to execution and from execution to strategy. In the end it is proposed to choose the latter evolutional variant as it allows for step by step improving of the process from simplicity to complexity.

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