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The article discusses the development of a new tool by a team of consultants in the solar materials and semiconductor industry to standardize and automate the sales and operations planning process (S&OP) in the supply chain. It discusses the challenges facing production planners based on the voice of the customer (VOC) survey including the manual effort involved in daily planning, revision and rework of daily plans due to market conditions, and multiple hand-offs of data sets among planners.

Over the years, individual firms and professional researchers have compiled many "Best Practices" for distributors. These practices have been time tested and the best approach is now known for almost every imaginable distributor activity. Meanwhile, the pressure to perfect distribution operations has never been higher with customers continually demanding higher performance at lower cost. While each best practice has been analyzed in isolation and projections of its impact on the Profit & Loss (P&L) statement and balance sheet have been made, very few have successfully considered the impact of implementing improved practices (across various distributor functions) on the firm's Return On Investment (ROI) and net profit. The objective of this consortium is to determine exactly how profitable a distributor could become by implementing best practices across all functional areas. The analysis will facilitate distributors and manufacturers optimize their operations potential and help financial firms assess the potential profitability of mergers and acquisitions. To address this need, a research consortium (Optimizing Distributor Profitability) was conducted in 2007 by the Supply Chain Systems Laboratory at Texas A&M University. The consortium was sponsored by 11 distributors from 6 different channels. [ABSTRACT FROM AUTHOR]

The paper first takes a look at the current practices that distributors follow in order to optimize the profit and loss statement (P&L) and hence Return on Investment (ROI). The results are based on survey/interviews conducted by the authors with distribution companies across multiple distribution channels. The paper addresses the objectives that distributors typically set as far as the financial goals are concerned. The Supply Chain Systems Laboratory at Texas A&M University conducts distribution research by partnering with distributors across the globe. One of the topics that the lab is currently working on is 'Optimizing Distributor Profitability'. A consortium of companies in North America was formed by the laboratory to address the common distributor practices and determine techniques to optimize profitability. The paper addresses the survey that was conducted to determine the current practices in the distribution community and also determine the research direction of the optimizing distributor profitability consortium based on the participants' business requirements and online surveys. This paper addresses the respondents' results with respect to 7 major categories: Financials, Inventory Management, Pricing Optimization, Lean Distribution, Facilities/Network Optimization, Sales Force and Human Resources. [ABSTRACT FROM AUTHOR]

The paper gives an introduction to lean principles and provides a roadmap for implementation in any distribution environment. A summary of the lean tools widely used and a lean tool selection matrix is also provided. The roadmap is then applied to a distribution facility to make the processes more efficient. In this paper, a 10-step lean problem solving approach is introduced and applied in detail to a distribution warehouse operation. Initial process study revealed several problem areas. Two of the most glaring problems a) High Customer Wait Time and b) Pending Days Sales Outstanding (DSO) were chosen for analysis. The 10 step method is then applied by first Value Stream Mapping (VSM) the current process to understand Customer Value Add (CVA), Business Value Add (BVA) and Non Value Add (NVA) activities. A future state Value Stream Map is proposed with the objective of eliminating Non Value Add activities and minimizing Business Value Add activities for overall lead time reduction. Potential improvement opportunities are identified and weighted based on their impact on the organization's Key Performance Indicators (KPIs). Standard Operating Procedures (SOPs) in the form of future VSMs are created and new employee productivity measures are introduced to ensure process control and employee accountability. The loop is then completed by selecting the next major process and applying the general framework to establish a culture of ongoing improvements. [ABSTRACT FROM AUTHOR]