Sales & Operations Planning is indispensable in organizations with a large flow of goods. Yet many companies are struggling with it. Understanding what S&OP is all about, why it is important, and what pitfalls your business needs to avoid is crucial in leading successful company!Topics in this article
According to Tom Wallace, one of the leading people behind the important initial development of S&OP, “Sales & Operation Planning (S&OP) is a set of decision-making processes to balance demand and supply, to integrate financial planning and operational planning, and to provide a forum for establishing and linking high level strategic plans with day-to-day operations” (Wallace, nd).
The highlights of an S&OP process are as follows:
The sales and operations planning process contains the following steps:
S&OP is important for many businesses, but why?
Nowadays, S&OP has made it into the top-level agenda of most leading firms around the planet, even though many companies still struggle to get it right. On the one hand this might be surprising since the process steps are really not that complicated. The complexity is that you try to align several departments, who are not used to speak each other’s language.
While implementing S&OP, you should be aware of the following pitfalls:
A high-performing value chain needs the collaboration of team members from across the organization. Tearing down silos and creating the right cross-functional mindset, however, can be a serious challenge. So, what do you need in order to achieve success? Ideally, you’d like your team to experiment with different scenarios wherein they learn to overcome various obstacles.
The Cool Connection is an innovative web-based business simulation game. It engages participants in making strategic decisions in the management of a manufacturing company of personal care products. Working in teams of four, participants will represent the functional roles of sales, purchasing, supply chain management and finance. They will be confronted with various real-life, real-time dilemmas.