Sales and Operations at Vestel Electronics

The aim of offering customer happiness

The aim of offering customer happiness to its product users by ensuring reliability and quality has stretched Vestel Electronics to its breaking point. Vestel Electronics is a large television manufacturer with its headquarters in Turkey. The business, which will be referred to as Vestel throughout the brief, is one of the biggest manufacturers in the world, generating 15 million products yearly. Apart from other devices like digital set-top boxes, television is its primary product line (Taşkn et al. 325–340). In a make-to-order setting, Vestel produces goods that are appropriate for its brand as well as other customized goods under the original equipment manufacturer (OEM) and original design manufacturer (ODM) labels. Together with the rapid technological evolution, Vestel operates under a large product portfolio that will change over time, making it difficult to manage. This will then turn to the attention of building a decision support system based on a mathematical programming that seeks to integrate with the company’s sales and operating planning (S&OP) (Taşkın et al. 325-340).

S&OP is a tactical-level integrated business approach

S&OP is a tactical-level integrated business approach that aims at balancing the demand and supply of products as it also synchronizes with other functions in the organization. As such, it makes it critical for efficient management of resources and supply of products, all to achieve customer satisfaction. The S&OP has a developed a working method of offering subsidiary companies the mandate to generate sales forecasts, by considering and monitoring various factors such as technological preferences of customers. Also, the S&OP process manages the demand and supply of displays and other critical materials with long lead times (Taşkın et al. 325-340).

As Vestel promotes flexibility over product demand

As Vestel promotes flexibility over product demand (that adds up to tens of thousands of products), high-level products are defined to provide a basis for the S&OP process, named as planning materials (PM). PMs are representative virtual products that capture basic product attributes and have a simplified BOM that consists of components that have long procurement lead times.Before implementation of the mathematical programming, planners used spreadsheets to execute the S&OP process manually. The manual exercise was cumbersome and lead to certain inaccuracies as a result of a large amount of data (Taşkın et al. 325-340). A decision support system (DSS) that relies on mathematical programming was built to deal with the situation. The process involved a three phase study. Phase I involved formulating the planning problem in the S&OP process as an optimization model. Phase II involved developing a DSS based on the optimization model. Phase III involved expanding the usage of the DSS within Vestel to enable stakeholders of the S&OP process to benefit from the system directly (Taşkın et al. 325-340).

Since the DSS became operational in August 2011

Since the DSS became operational in August 2011, it has provided Vestel with numerous benefits, both tangible and intangible. Some of the tangible gains include a decrease in planning time, increase efficiency in the S&OP process. Intangible gains are such as reduction in MRP nervousness, providing a basis for further studies among others.Despite the large demand-supply flow of the company, Vestel has a unique location. It is geographically close to its major suppliers, found in Europe. Either way, it encounters a challenge of material procurement as inputs are sort from the far eastern countries, namely Japan and China. However, The DSS has enabled the development of systems for related processes to improve Vestel’s competitiveness (Taşkın et al. 325-340).

Works Cited

Taşkın, Z. Caner et al. "Mathematical Programming-Based Sales And Operations Planning At Vestel Electronics". Interfaces 45.4 (2015): 325-340. Web. 24 Feb. 2017.