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Strategic Sourcing in Travel Management
Building a Sales & Operations Planning (S&OP) program grounds-up helped improve visibility into end-to-end process – from customer forecast to supply planning and execution.
Overview
A global chemicals distribution company with a very large global customer and supply base was lacking strategic procurement due to lack of visibility into reasonably accurate forecast on one side and corresponding balanced supply management on the other.
Challenges
- Large and fragmented global supply chain.
- Lack of forecasting tool and an integrated supply planning.
- Reactive and tactical procurement and supply management.
Solutions
A simple S&OP tool in excel spreadsheet was developed using historical supply and demand data to forecast rolling 12 months and adjust corresponding supply chain including price management. Monthly forecast was provided based on simple monthly averages of 3 years historical data. This was found to be adequate to provide a reasonable line of sight, with flexibility to adjust through a monthly/quarterly discussion among the stakeholders.
Various work streams included –
- Identify key supply products based on spend impact and regular consumption.
- Develop a detailed excel map of forecast, current sales orders, current & transit inventory, safety stock levels, purchase orders on hand etc.
- Total Cost of Ownership (TCO) was added to the mix for decision making.
- Data output was used to review monthly forecast and supply plans.
Results
A high level of visibility into the sales forecast and corresponding procurement and supply planning process was immensely helpful.
Key outcome of this exercise included –
- Increased visibility into forecast and supply planning process.
- Intelligent and strategic approach towards suppliers.
- Informed procurement decisions around pricing and supply timing.
An effective S&OP forms a strong bridge between the company strategy and it’s operational execution
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