What are the key learnings to shape S&OP to specifically drive inventory reduction?
The key learning is that S&OP is the best way to coordinate a company-wide inventory reduction program. Rather than having individuals make tactical adjustments such as lot size reductions, safety stock reductions, frequency of manufacture, etc., S&OP can monitor the net effect of all activities and ensure that all the functions know what’s going on. In this way, cross-functional input can help identify where inventory can be cut with no impact on customer service, and where lower inventories will present the greatest risk of customer service or cost problems. S&OP does not provide any new or different ways to cut inventory, just a process to coordinate the use of each different way.
