Your Eye on the Ball!
to a smoothly-functioning SOP process, Maxfli now has the right product
in the right quantity at the right time.
by Michael Bane
When Gary Roulston
looks out his window and sees rain, he's no longer quite so worried.
As Vice President
of Operations for South Carolina's Maxfli Golf Division, Roulston knows
that weather can create havoc with the market for golf balls, one of Maxfli's
primary products. "Even in a recessionary period, when golf club sales
might suffer, golf ball sales are still good, " he says. "But when the
weather goes bad, so do golf ball sales."
In such a volatile
market, with demand fluctuating, resources can take a beating. Inventory
can pile up, backorders can increase and quality of service to the customer
might have once been the case at Maxfli, it is no longer. Thanks to a smoothly-functioning
Sales and Operations Planning (SOP) process, Maxfli now has the right product
in the right quantity at the right time, regardless of the whims of Mother
Nature or the marketplace.
"It used to
be the information we received in Manufacturing wasn't necessarily tied
to our actual sales projections," he says. "It wasn't a unified effort.
Sometimes a best-case effort, sometimes a worst-case effort, and there
wasn't any clue to which case we had."
The first indication
that something was wrong was increased inventory. "It just developed,"
Roulston wryly says. At the same time, customer backorders kept increasing.
"We were making product," he adds. "We just weren't making the product
the customer wanted to buy."
for Maxfli came when a group of managers participated in an R. D. Garwood
seminar on the SOP process. This group of managers used the "patented"
Garwood SOP Starter Kit and its five-step process to change the relationship
and communications between manufacturing and sales. Basically, the SOP
process provides a way to balance demand and capacity.
It's a way
of making sure everyone is singing from the same hymnal. Typically, we
see that Manufacturing's plans are not necessarily connected to Sales &
Marketing's projections, or Sales & Marketing's projections are not necessarily
connected to manufacturing plans. The results are backorders, increased
inventory and an adversarial relationship between Manufacturing and Sales
forecasts weren't developed in a team-type atmosphere," says Roulston.
"They were more or less just done, and the information filtered down. You
could never really tell which forecast was the current forecast. It was
very loose and very informal."
The R. D. Garwood
SOP process is based on the idea that sales and operations planning can
be a competitive weapon. The process itself is a series of preplanned sessions
that promote teamwork, involvement and communications among executive and
middle management. The result of these sessions is a single company game
plan for running the business.
is comprised of five steps:
historical data, creating a "snapshot" of where the company has been and
its current status.
all the future planned demands, with the objective of creating a preliminary
the demand plan to the production capabilities.
a Partnership Meeting among the managers in all departments affected by
the plan, with the objective to create a realistic list of alternatives
for executive management.
a set of plans, the company game plan.
the process is the series of planning conferences that bring together,
sometimes for the first time, people from all the departments in the company.
The result of these conferences is that the plan has a cross-departmental
"buy-in." The executors of the plan are the people who created it.
The first meeting
is the Demand Meeting, where we review historical data on our past performance,
determine what our future customer needs are going to be and create the
new 12-month forecast. The second meeting focuses on production planning,
comparing the demand forecast to manufacturing capabilities. The third
meeting, the Partnership Meeting, brings together all the departments to
evaluate the new plan and eventually arrive at a consensus plan to be presented
to executive management at the final SOP meeting.
"When we started,
the sales side didn't want to go along with it," Roulston says, "because
they felt it was going to tie them down or quantify them. Now they think
it's the greatest thing ever invented."
"A huge reduction in backorders," says Roulston. "I don't know if I want
to give you the figures, because they were so bad. But there's been an
enormous reduction in backorders from last year to this year. Now, hopefully,
we're making the things that are going to be sold, and in the right quantities."
The SOP process
is one of those basic things many companies overlook. No company, though,
who's looking for real quality can overlook the SOP process and succeed!