S&OP, which is also known as sales and operations planning, is an important aspect of integrated business planning. Integrated business planning can help make your organization more streamlined and efficient, and sales and operations planning is an important part of that. The importance of sales and operations planning often causes businesses to emphasize this practice. However, it can be difficult to properly implement sales and operations planning. This article lays out four helpful tips that can assist your organization in the implementation of sales and operations planning. Read on to learn more.
The Basics of S&OP
Sales and operations planning is the aspect of integrated business planning that incorporates finance, sales, and operations. The plans created through sales and operations planning are often released every month. Some businesses instead release plans every year. However, most experts feel that this causes a business to be less flexible when it has to respond to an unexpected issue. These plans focus on five main aspects of the business:
- Forecasting demand
- Supply management
- New initiative assessment
- Reconciling the plans for inventory, capacity, production, and sales forecast
- Senior management review
It will be easier for your organization to successfully complete all these aspects if you concentrate on key info, evaluate external influences, take executive ownership of sales and operations planning, and ensure that all of your efforts are synergized.
Concentrate on Key Info
Sales and operations planning can generate a great deal of information. It can be difficult for your business to respond to all of it. Instead, you should focus on forecasts that predict fluctuations of more than 20%.
Evaluate the Effects of External Influences
Your business should look at any and all external influences to sales and operations efficiency first. You should only examine internal factors after responding to external influences. This is because problems with sales and operations efficiency caused by external factors can usually be fixed quickly.
Take Executive Ownership of Your Sales & Operations Planning
Executives need to be heavily involved in the details of sales and operations planning. This may require an adjustment from your organization’s current C-Level executives, as many of them will not have been so involved in the details of these plans. It is especially important that the business’s CEO be involved in sales and operations planning. Many experts recommend that the CEO personally oversee sales and operations planning.
Ensure That All Key Processes Work Together
Many businesses make the mistake of discarding their stand-alone processes when they adopt sales and operations planning methodology. This requires your business to rebuild its operations from the ground up. This could cost your business in the short term, as it will take time to rebuild your operations. If one of your business’s key processes is deeply flawed, it may be a good idea to tear it down and start from scratch. However, you should not discard processes that are working well. Instead, your organization should focus on integrating all of the key processes.
I am Jones Smith and I am here to share my experience and expertise in writing. I’ve been writing articles for different publications for more than 6 years. I have a varied range of interests and that’s why I love blogging about different topics. In my opinion, blogging is a lot like acting, and I consider writing blog posts as an acting job. I am an entrepreneur by heart and there is nothing big or small when it comes to starting a business.