The business world is complex, and growing more so every day, but you can rely on sales and operations planning (S&OP) for help.
For example, with S&OP, you can plan across time horizons more clearly. Most companies have fragmented planning capabilities. Chances are your longer term strategic (financial) and tactical planning processes are not integrated with your shorter term demand, inventory, replenishment and manufacturing planning efforts. These planning efforts are often run by different groups, use different assumptions and data, and rely on different systems! Strategic plans are tough to incorporate into an aggregate S&OP plan, and both plans often do not reflect the latest supply chain network and operational data. The disconnects and misalignments can lead to missed opportunities, higher costs and increased operational risks.
ASCM (formerly APICS) defines S&OP as the “function of setting the overall level of manufacturing output (production plan) and other activities to best satisfy the current planned levels of sales (sales plan and/or forecasts), while meeting general business objectives of profitability, productivity, competitive customer lead times, etc., as expressed in the overall business plan.”
It can help face these challenges and more:
- long material lead times
- volatile component price fluctuations
- safety regulations and quality mandates
- complex manufacturing constraints
- increasing customer expectations
- demand uncertainty complicated by seasonality -high promotional activity
- product perishability
- frequent new product introductions (NPIs) and new distribution channels.
Download and read our short eBook, Smooth Sailing with S&OP, to gain some fresh perspectives.