What is Sales and Operational Planning?
Although S&OP should be defined for each organisation, certain characteristics apply:
- S&OP is a collaborative cross functional process that engages all functions to produce an integrated set of plans that all are committed to support.
- Its purpose is to balance demand & supply in the supply chain.
- It is performed periodically – monthly or weekly.
- It aligns operational plans to high level business & strategic plans.
- It can be implemented at a market, regional or global level.
- At its core is a single set of numbers for the business.
- It uses standardised processes, calendars of events & meetings & Key Performance Indicators.
The Purpose of S&OP
The purpose of S&OP is to achieve the optimal balance between supply and demand. A streamlined planning process will result through increased communication and teamwork between departments within your organisation. This collaborative approach will align the sales and operational processes and ensure that the demands of the marketplace are met.
The Benefits of S&OP
- Strategic – a key enabler of growth.
- P&L impact – sales uplift (e.g. from improved customer service, reduced stock outs); reduced supply chain costs & waste.
- Balance sheet impact – reduced working capital.
- People – increased accountability (as decision making is taken at the correct level of the organisation), improved communication.
S&OP & Where it Fits
