SALES AND OPERATIONAL PLANNING (S&OP)
Sales and Operational Planning (S&OP) describes the coordinated relationship between sales and manufacturing operations to reduce inventory, time, and total costs. Sales and Operational Planning (S&OP) relies heavily on the accuracy of demand planning and the integration of production scheduling with supplier flexibility.
Sales and Operational Planning: Where to Begin
S&OP is a fundamental process linking in-process capacity and inventories to demand dynamics. Key individuals from procurement, production, finance and sales must be involved in the discussion to ensure enterprise wide visibility. Once organized, the team should work together to build a step-by-step approach for execution with expected goals and outcomes clearly established. Scenario analysis is an important step to synchronize demand and production planning. This will also allow the team to see how the entire operational process and plan fits together. Once the plan is created, it is important for the team to manage the demand process, not the data. All upstream process follow demand. Lastly, focus on key factors will allow the team to fulfill achievable metrics. Determining these factors is essential for success.
