Suntu Motors: Planning for excellence (A)

This two-part case series makes a deep-dive into the Sales and Operational Planning (S&OP) process of Chinese carmaker Suntu Motors. They could not have wished for a better market response when it launched its first car in the fast-growing midsize SUV market. It predicted selling 240,000 cars in the first year; but, three months after opening its order books, it had to raise its forecast by almost 40% to 330,000 cars. It was now up to the already overstretched supply chain, production and purchasing teams to increase supply at short notice. This was not an easy task considering that Suntu was dependent on the cooperation of 150 external suppliers, while its main production facility in Chongqing was already running at 95% of total capacity. CASE A sets the stage, providing details of Suntu’s ineffective planning process that is keeping the supply chain teams running behind the facts; much like a dog chasing its own tail. The extra costs, delivery delays and impact on other models to meet demand for its new SUV would be substantial, but the company had no choice; this model was its top priority. It would make Suntu a serious contender in the premium car market and confirm that it was on the right track to achieve its strategic five-year plan: “Compete to Win.”