S&OP Engineering III: The End of Excel (Linear Programming for Supply Planning)
“We always want 4 weeks of coverage.” This phrase, repeated like a mantra in every S&OP meeting on the planet, is financially toxic. Why? Because it’s a fixed rule applied to a dynamic system. If your demand in January is 200 units and in July is 20, you’re forcing yourself to maintain 800 and 80 units respectively “just in case.” January falls short. July immobilizes capital for no reason. The alternative isn’t more sophisticated intuition. It’s mathematics. ...