Prioritizing Improvement Projects Across a Multi-Echelon Chain
A medical-devices manufacturer has a five-year transformation roadmap with 14 candidate initiatives. Budget allows roughly four in the next 18 months. Current pain points: (a) forecast accuracy at the item level is 58% MAPE-driven bias, causing expedites; (b) supplier on-time delivery is 82%; (c) the S&OP meeting is a numbers-review with no scenario or consensus step; (d) two plants and a contract manufacturer have no shared capacity visibility; (e) master data for units of measure is inconsistent across ERP instances. Leadership wants to start with a new planning tool because 'the tool will fix forecasting.' A prior tool rollout two years ago stalled because planners kept their spreadsheets.
1. Recommend which initiatives to fund first and justify the sequencing.
Read the worked answer
Sequence by dependency and root cause, not by visibility. The proposal to lead with a planning tool repeats the failed rollout, because the stall was adoption and data, not software.
Recommended first wave:
- Master data / UoM harmonization (e). Prerequisite for any forecast, capacity, or tooling work; cheap relative to the others and unblocks everything.
- S&OP process redesign (c). Add demand review, supply review, reconciliation, and scenario/consensus. This creates the decision forum that makes forecast and capacity work actionable, and it addresses the adoption failure by changing behavior before technology.
- Forecast bias/accuracy program (a). Attack bias first (it is systematic and correctable) with a defined baseline and ownership; tooling follows the process, not the reverse.
- Supplier performance management (b). OTD at 82% is a structural constraint; joint scorecards and root-cause work reduce expedites at the source.
Defer capacity visibility (d) until data and S&OP cadence exist, since shared capacity views are only useful once there is a consensus plan to feed them. The tool investment rides in wave two, scoped to the redesigned process.
2. How should the team decide whether the S&OP redesign is succeeding before financial results move?
Read the worked answer
Use leading process and behavior indicators with a short review cadence, because financial lag makes it useless as a steering signal.
Candidates: forecast bias (signed error) trend; percentage of demand plan overridden with documented rationale; number of scenarios evaluated per cycle; adherence to the S&OP calendar (inputs on time); percentage of demand/supply gaps resolved in the consensus meeting vs. escalated; expedite count and expedite cost; planner adoption of the standard process (spreadsheet shadow-planning rate).
Set baselines before launch and review monthly, with a quarterly checkpoint against the lagging financial metrics (inventory, expedite spend, service). The rule: if behavior indicators do not move in two cycles, the design is not working regardless of what the P&L shows yet.