Sales and Operations Planning
Increase your efficiency and profitability through sales and operations planning
No matter what the nature of your business, you will try to run it in such a way that provides you with the best possible return. A crucial part of this is to find a balance between supply and demand. You don’t want to create wastage through over-producing. Neither do you want to lose customers due to not being able to supply in their demand. Sales and operations planning (S&OP) involves a set of decision-making processes aimed at balancing demand and supply, while incorporating financial and operational planning and linking high level strategic plans with day-to-day operations.
S&OP is a monthly planning activity. It is an integrated business management process that facilitates alignment and focus between the various operations in your company. A thorough monthly S&OP plan should include an updated sales plan, production plan, inventory plan, customer lead time (backlog) plan, new product development plan, strategic initiative plan and resulting financial plan. A clear indication of proper S&OP is that it automatically enables effective supply chain management.
The main function of the S&OP process is to review customer demand regularly and match this with the supply resources to ensure a balance. Labour, equipment, facilities, material and finances required to accomplish the required production all need to be considered and managed. At the same time the general business objectives of profitability, productivity and competitive customer lead times must be met as required by the overall business plan.
This process faces many challenges. This includes a lack in verification of forecasts against other input sources, the inability to connect the extended supply chain information to demand inputs and a limited ability to simulate different plan alternatives and compare to key business objectives. The quantity and diversity of demand inputs, variations between various input sources and hindered collaboration between collection and sharing mediums also poses certain difficulties.
Enterprise Optimizer® from Business Modelling Associates can address these problems. Improve your position in the marketplace with this powerful tool that can manage customer profitability, identify the best product mix and make strategic decisions on pricing, sales promotions and incentives. Visit businessmodelling.com to learn more on how to make sales and operations planning work for you.
