Solving Common S&OP Scenarios using Microsoft Dynamics AX 2012

Editor's Note: This is the first in a four-part article explaining how Microsoft Dynamics AX 2012 solves common S&OP scenarios in manufacturing businesses. Dr. Hamilton will also be covering these topics as part of his speech (UBAX007) at Convergence 2014 in Atlanta on Friday, March 7 at 9am.

One of the cornerstones for effective supply chain management in a manufacturing business consists of effective sales and operations planning (S&OP) game plans. The process typically starts with the definition of all demands for the firm's salable items and results in S&OP game plans that drive supply chain activities to meet those demands. In addition, an effective S&OP game plan requires realistic sales order delivery promises, where the delivery promises align with the game plans that everybody is working to.

The nature of an S&OP game plan depends on several factors, such as the need to anticipate demand for an item, the item's primary source of supply, and the need for linkage between a sales order and the item's supply order. When demand needs to be anticipated, for example, min/max quantities or demand forecasts often provide a key element of S&OP game plans for stocked end-items or stocked components. The item's primary source of supply may reflect production orders in traditional manufacturing or kanban orders in lean manufacturing, as well as purchase orders and transfer orders. The need for linkage typically applies to make-to-order and buy-to-order scenarios since it provides visibility of the sales order demand to the supply order. This linkage supports additional functionality for actual cost items. A given company typically has several major ...