Sales and operations planning, also known as S&OP, is a key business activity for production heavy firms. It integrates sales & marketing strategies with supply chain considerations, allowing for a more unified mission across multiple departments of the business.
So how can your firm improve your sales and operations planning? This is a short guide on how to do so.
Why Focus on S&OP?
S&OP is, as stated before, a highly important activity that allows businesses to consider both the supply and demand side.
Sales and operations planning helps executives make better-informed decisions based on multiple information sources across different departments of the business. Most people are only concerned about their own jobs, but executives need to understand every portion of the business. When it comes to supply chain management, S&OP is how executives get the information and make the decisions they need to excel.
Steps of the S&OP Processes, Summarized
- Product Review: Analyze the market viability of currently sold products and example current pipelines in order to make decisions about product planning.
- Demand Review: Forecast demand to see future product needs for the business. Use historical data and future modelling in order to figure out what the demand is likely to look like.
- Supply Review: Aim to connect with the demand plan while also reducing overall costs of administrations such as inventory and customer service.
- Finance Review: Analyze the current month’s S&OP cycle for financial performance considerations. Integrate with the finance department in order to get an accurate picture.
- Preparation: Get the leaders of the departments together to identify the gaps and disconnections and craft strategic approaches to fixing them.
- Execution: Take the plans created in the previous 5 steps, sync them all together, and start assessing various possible scenarios. Then, hit the ground running!
How to Choose S&OP Software
Sales and operations planning software is a type of ERP solution that focuses primarily on connecting the supply side with the demand side.
Every business that takes S&OP seriously needs to use software specifically built for it. However, not all software is good for all businesses.
To choose S&OP software, first consider your requirements. You need software that can integrate all aspects of your supply chain and your sales & marketing efforts in order to create the necessary forecasts for your finance department.
Second, choose a software that is easy to deploy. This will lower overall strain on your IT staff.
Third, it must be able to evolve with the business. Nothing is more annoying than having to redeploy because of a change in the supply chain!
Lastly, it needs to be readily usable by a regular user without too much assistance from support!
Sales and operations planning (S&OP) is a key aspect of supply chain management that integrates activities across the entire business. S&OP is a multi step process that aims to execution by all departments. Choosing S&OP software properly can be a big boon to the firm.