S and OP – A Bridge Over Troubled Water

During the current financial climate, characterized by a drop in demand and increased uncertainty, companies must cut costs to survive and emerge stronger. One of the key areas that can be improved is the planning and coordination between sales and operations divisions. The risks and costs involved in making wrong decisions are higher than ever, and better planning is required.

The S&OP (Sales and Operation Planning) process is defined as a collection of organizational processes whose goal is to achieve maximum profits for the organization through coordination between sales and operations divisions.

The S&OP Process Creates Balancing Between Demand & Supply

In a 2006 survey conducted by international research company Aberdeen (The Sales and Operations Planning Benchmark Report, Aberdeen Group) of 200 companies in a variety of fields around the world, 70 percent of them said they were improving their S&OP processes,. The survey found a correlation between implementation of S&OP practices and the organization’s business and operational performance.

The most prominent characteristic of leading companies (best in their class) is the transition from “tactical” practices, which usually suffice with meetings to coordinate sales and operations, to “holistic” practices, which look at the organization’s bigger picture and work according to a bigger picture of demands. This bigger picture is especially important today, when organizations are becoming more global and the span of control is becoming wider.

The holistic approach refers to a person or a company as a “whole”; it requires a broader look at all internal and external factors (emotional, physical, social, economical, environmental, etc.) The basis for success in an S&OP process is built on four foundations:

1. Management commitment: The key success factor is the commitment of senior management to the process. Many companies have failed because they did not receive management’s support and acknowledgment for the importance of the process. A primary tool for achieving commitment and ensuring the success of the process is appointing someone to supervise the process – a senior manager who receives direct responsibility and authority for implementing the S&OP process. This person is usually from the supply chain, but this is not a requirement.

2. Creating a uniform and agreed database (one number). Without agreement on numbers, there can be no orderly discussion of meeting demands.

Rani Sagiv, Nestle Israel’s vice president for overseeing its supply chain, which manages 2,500 products for thousands of customers, calls the process Consensus Demand Planning. “Agreeing on basic numbers is the key to an effective process,” he says. “Before creating such a process in collaboration with global Nestle, we wasted a lot of time and energy agreeing on the right numbers.”

But achieving agreement on the numbers is not enough: To deal with changes in demand, optimistic and pessimistic scenarios must be anticipated. For each of those scenarios, a collection of responses should be prepared, including backup plans that shorten the response time. These scenarios also include addressing the product’s life cycle. This process allows a more holistic vision of the change in the KPIs (Key Performance Indicators) and their effect on the entire supply chain. In many cases, there is the tendency to waste a great deal of time gathering information, when most of the information is not critical to the decision-making process. The company should focus only on information that can be used to make decisions (turning information into knowledge). The 80:20 rule is especially important when analyzing demands.

The use of designated information systems should be implemented. There are a number of such systems on the market, the leading ones being Oracle’s Demantra and SAP’s APO. This type of system interfaces with the existing ERP system and provides a bigger picture of all functions and saves the use of Excel tables that usually create a cumbersome and non-standardized process.

There are also designated systems for optimizing links in the supply chain. For instance, there are systems that perform optimization of raw material and product inventory based on the required service level (such as ToolsGroup DPM). These systems are based on statistical analysis of historical data combined with forecast data; they enable a quicker and more precise decision-making process, eventually leading to reduced inventories throughout the entire supply chain. The Dixon Company, a seller of computer equipment (over 64,000 SKUs), implemented this type of system and achieved a significant reduction in inventory while maintaining the required service level.

“In two weeks we were able to reduce stock breaks in stores by 50% and by 35% in the central warehouse,” said Alejandro Esposito, a Dixon Group systems manager.).

3. KPIs: As with every process, KPIs are the key tool; they allow us to examine performance and measure success over time. The key customary KPIs are:

a. Demand Planning Accuracy (DPA). This measures the level of forecast accuracy. The calculation is based on measuring the absolute percentage of deviation weighted on the product level between forecasts and actual sales. Measurement of absolute deviation determines that a situation of sales beyond forecast is also undesirable over time. Companies implementing high levels of S&OP processes usually reach an accuracy percentage of 85% over time. “The very fact that the sales division is measured by parameters that affect the entire supply chain created a balance in management meetings. Suddenly, everyone realized it was not only the operations division that was affecting the flexibility and stability of the chain,” said a supply chain deputy manager for a Romanian consumer goods company.

b. Master Scheduling Accuracy (MSA). This measures the correspondence between the manufacturing plans and actual manufacturing. The calculation is based on measuring the percentage of absolute deviation weighted on the product level between the manufacturing amount planned and the actual amount manufactured. This parameter is an indicator of the extent of changes to the manufacturing plan throughout the week and month.

c. Out of Stock. This measures the percentage of products that were (at a certain point in time or on a periodic average) under the predefined level. During the S&OP process, minimum required levels of inventory should be determined by weighting historic data, storage and logistic constraints, and the required level of service for the customer and product.

d. Order Fill Rate. This is the percentage of orders supplied in full and on time. This is a strict parameter that assumes that any order that was not completely filled, even if supplied on time (or vice versa), compromises the level of service.

For each parameter, a quantitative goal should be defined at the beginning of the process. The goal will usually be based on the baseline plus a certain percentage of improvement and updated as needed. The calculation method should create maximum transparency between the various functions.

“The actual measurement, even before making any changes to the process, led to an improvement of 10% to 15%,” said the supply chain deputy manager for a Romanian consumer goods company.

4. Management Routine: The S&OP process must be based on a series of forums and meetings at regular intervals and with predefined agendas. Creating designated processes increases the commitment to the process. Predefining the agenda allows for short and purposeful meetings. Endless discussions that go on into the night do not contribute to the employees’ motivation to implement the process. S&OP meetings with a predefined agenda can be very short and purposeful, which increases the efficiency of the decision-making process.

“Our management routine enables better control of the process implementation,” says Rani Sagiv, “and is an efficient tool for communicating the improvement in the business results achieved throughout the process.”

The S&OP process is a collection of reality-driven processes, without which companies would have a hard time growing over time while maintaining their operational flexibility for changes in the business environment. In these times of uncertainty, we cannot suffice with the correlation between supply and demand and with using the tools that we have used so far.

Implementing S&OP processes can build the necessary infrastructure for the company to exit the crisis quickly and create a significant competitive advantage with minimum exploitation of resources. Proper implementation of the method and adhering to a number of simple principles can sometimes constitute the difference between survival and failure, which is crucially important today.

Buying Your First Steel String Acoustic Guitar – Materials Guide

This article discusses some of the finer points in buying your first steel string acoustic guitar, such as the materials and hardware. Using this information will help you to make the right choice. An earlier article discusses the basics of buying your first steel string acoustic guitar. Just to recap: Buy the best quality guitar you can afford. Get one with a solid Cedar top. I recommend getting something of slightly lighter weight construction and suitable for light strings. Choose a size/style of guitar suited to your physique and seated posture. I also covered a few things you don’t need: a cutaway, electronics or mother of pearl or abalone trimmings. Take an experienced guitarist with similar tastes to you along whenever you try out any guitars you’re interested in. And finally, when you’re ready to buy, I recommend you make sure you get a case and stand to protect your instrument from mishaps. Let’s look at the materials and hardware used for steel string acoustic guitars.

You should get one with a solid top – this means the soundboard of the guitar is made from solid timber rather than laminated. The soundboard contributes significantly to the characteristic sound of the instrument, and using solid timber is preferred for better quality sounds. Cedar is my first choice, it has a great tone suited to a variety of styles. Spruce is another popular wood with a somewhat brighter sound than Cedar. The drawback of Spruce for beginners is that it suits a more physical playing style and requires picking the strings harder which is something that comes with the confidence you’ll develop over time, but may not suit you at the beginner stage. Guitars with soundboards made from other woods such as Koa or Mahogany are available but less commonplace – you’ll just have to try them to see if you like their sound.

The back and sides will ideally also be solid but it’s OK to choose a laminate here because the difference won’t affect the sound as much as it will in the case of the soundboard. It should save you some money if they’re laminated. Popular woods are Mahogany or Rosewood and sometimes Cherry, Koa or Walnut, and any of these are fine so if you like one over the others because of the sound or look then go for it.

For the neck either Mahogany or Maple are great choices. Mahogany is a popular neck wood that will contribute to a great sound especially with some mid range character. Be aware that it can be split or damaged more easily than some other woods. Maple is known for a brighter sound and is more durable although you may find it more difficult to find acoustic instruments that use it for the neck wood. The Fretboard (and bridge) will ideally be Rosewood – please don’t use endangered species such as Ebony, Honduras Mahogany and Brazilian Rosewood (unlikely on a lower priced instrument anyway, but just so you know).

Quality tuning machines (aka machine heads) will help you tune the guitar more easily and keep it in tune better. They should feel smooth and precise in use and use durable higher quality materials. Sealed construction is also a plus. Reputable brands include Gotoh, Grover, Schaller and Sperzel. These companies produce aftermarket tuning machines as well as providing original equipment to many guitar manufacturers and luthiers.

The nut and bridge saddle will often be plastic on less expensive instruments. Graphtek make a synthetic material called Tusq which is well respected and used by many manufacturers and luthiers on their instruments. Bone is also a great alternative to the cheaper plastic materials used for these parts. You can get a better nut and bridge saddle fitted later if your instrument doesn’t come with them stock.

It will also help to choose a guitar suited to using lighter gauge strings. Gauges 0.010 to 0.050 should be the heaviest you use as a beginner, and there are some sets with even lighter low strings made by most string companies including D’Addario, Cleartone, DR, and Thomastik Infeld. Any guitar body style smaller than a dreadnought should be fine, and a dreadnought should be OK too especially if you’re a bigger or more physical person. Lighter gauge strings will make it easier to play when the instrument is set up correctly for them, and you will find this a big help in learning to play guitar.

Information On Drill Bits For Concrete

Drilling concrete can often be difficult. Concrete is one of today’s most in-demand manufactured materials used in building roads, pavements, pipes, house foundations, architectural structures, parking structures, buildings, walls, fences, bridges, floors and fences. It is also among the toughest manufactured products, which mean you need the right tools and equipment when drilling in concrete.

For those who work in the construction industry and masonry, drill bits for concrete are very important tools they should own. With concrete bits, workers can do their work faster compared to using an ordinary steel drill bit. Concrete bits are identical to regular metal and wood boring bits. They also come with twisting cutting edges and steel shafts except the cutting edges of the bit are bevelled for the concrete shredding to move out of the hole. In addition, the steel shaft is tempered for even more hardness.

You can find various types of drill bits for various drilling projects. However, be wary of substandard gears. Although more affordable, these tools are not made with good quality materials. Moreover, they do not create a smooth look to the drilled hole that the more expensive bits can do. Likewise, low priced concrete drill bits can remove chunks of concrete from the surface causing a ragged appearance. This implies additional work since you need to patch the holes later. True, drilling in concrete is often hard- unless you use the right type of drill and top quality bits.

Majority of the concrete drill bits available today include a carbide tip that can go through the concrete easier than regular bits. You can also find concrete drill bit with small diamonds embedded on its tip. Diamonds are hard by nature and can bore into concrete faster without dulling. Additionally, it leaves a smoother finish and bores holes more accurately.

You can find tools and other specialty bits that can make drilling concrete less challenging. For instance, a hammer drill works with the concrete drill to make a smoother hole. It operates with a pulsating system that powers the bit into the cement, at the same time turning the drill bit. Another item you need to include in your tool kit is the rebar bit or rebar cutter. This is needed for boring holes into exterior walls and you can never tell if you will drill into some rebar.

Tips on Drilling Concrete

Aside from being a hard material, concrete also creates concrete dust, which can cause health complications. Furthermore, the debris left in the hole can pose additional challenges. When drilling concrete, it is advisable to wear a mask to avoid inhaling concrete dust and to protect your eyes from them. Likewise, long-sleeved shirts are encouraged to protect your skin against concrete dust.

You might also be required to use a helmet depending on the where you work. To avoid concrete droppings from falling into your feet, wear steel-toed shoes or boots. Work gloves will also protect your hands and lessen the vibration effects of the rotary hammer drill.