Episode04Readings - Balanced S&OP: Sunsweet Growers story...

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Balanced S&OP: Sunsweet Growers’ story In most supply chains, the key constraint lies either on the supply side or the demand side. But for dried-fruit producer Sunsweet Growers, both supply and demand are determined by factors beyond the company’s control. To operate more effectively in this doubly constrained environment, Sunsweet updated its old sales and operations planning (S&OP) program with new tools and processes. The new S&OP program helps not only to balance supply and demand but also to sustain that balance. By Harold Upton and Harpal Singh -- Supply Chain Management Review, 3/1/2007 The supply chain today is becoming increasingly complex. Outsourcing and contract manufacturing are increasing, while at the same time, more and more companies are striving to achieve higher levels of customer service. Because of these new challenges, more large and small companies are recognizing that a successful sales and operations planning (S&OP) program can be the key to managing an effective supply chain. In simple terms, S&OP can be viewed as a process to bring together the business organization on a regular basis to make effective decisions on how to reconcile conflicts and develop a profitable game plan. S&OP has been a supply chain discipline for more than a decade. In the past, however, not many companies had the tools or knowledge to implement it effectively. After 2000, however, companies became better educated and realized that the S&OP process is not entirely an information technology implementation program. The following case study from Sunsweet Growers, a California-based dried fruit producer, shows the results of implementing a successful S&OP program. The key to Sunsweet’s S&OP program was bringing together its organization around one set of data to develop a profitable plan. A Look at the Challenges Sunsweet Growers has many of the same supply chain management challenges as other manufacturing environments. (For more on Sunsweet Growers, see sidebar.) Yet these challenges are compounded by a number of variables that can affect production, including weather and crop yield. Unlike most industries where production can be controlled, the dried fruit industry has little control over how much inventory it produces. As a cooperative, Sunsweet’s access to raw materials is limited by its network of growers, and the planning process must take this into account. When there is a bumper crop, Sunsweet has to manage the sales throughout the year to utilize the crop. Conversely, when there is limited supply, Sunsweet has to fairly meet the demand. In the past, members of Sunsweet’s grower cooperative had typically produced an overabundance of plums used for making prunes. To address the oversupply situation, farmers began cutting down some of the plum trees in 2003. With fewer trees to harvest, California experienced two unusually cold and wet growing seasons, causing crop yields to fall to only 24 percent of a normal harvest in 2004 and 50 percent in 2005. Sunsweet,
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This note was uploaded on 05/19/2011 for the course BUSINESS M 350 taught by Professor Johnston during the Spring '11 term at Missouri State University-Springfield.

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Episode04Readings - Balanced S&OP: Sunsweet Growers story...

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