Featured Presenter:
Blake Johnson, Consulting Professor, Stanford University
Demand forecasts are critical input to your business plan, yet forecast error is unavoidable. Supply chain agility can overcome this error with capacity and inventory, but comes at a cost. The solution? Proactively plan for a range of demand and supply within your sales and operations plan.
In this webinar, Stanford Consulting Professor Blake Johnson will share how to implement his “Range-based S&OP” best-practice to answer the following questions:
- How forecastable is demand over the planning horizon?
- What is the right type and amount of supply chain flexibility?
- What level of supply chain flexibility optimizes P&L and customer delivery performance?
Attendees at this session will learn how to:
- Achieve predictable financial and operational results in an uncertain world
- Balance supply chain flexibility vs. financial impact
- Deliver the best possible operating and financial performance
10. Source: Venu Nagali, HP, presented at Real-options conference June 2007
Manage risks using structured
contracts with suppliers
Flexible quantity
contract
Demand forecast (units)
Time
Fixed quantity
contract
0
100
200
300
400
Uncommitted
Hi scenario
Base scenario
Lo Scenario
1. Quantity Terms:
• Fixed Quantity
• Flexible Quantity
• Percent of HP
Demand
2. Pricing Terms:
• Market-based with
specified discounts
• Fixed price
• Price caps and floors
Structured Contract Terms
A combination of objectives from Assurance of Supply, Cost Savings & Cost
Predictability can be enabled by mixing & matching quantity and pricing terms