Many supply chain planning organizations use a single demand plan, which does not account for changes in the business environment. This limits sales and operations planning (S&OP) from accounting for uncertainty in demand as well as building an adequate response plan based for changing scenarios.
To account for uncertainty in the business environment and build agility in decision making, supply chain planning (SCP) leaders should perform scenario planning. Use this step-by-step approach to build scenario planning capabilities in the S&OP process:
- Develop scenarios for S&OP based on the key driving factors.
- Assess the business impact associated with prioritized scenarios.
- Define indicators to monitor changes to inform S&OP decisions.
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