4. Sales & Operation Planning (S&OP)

Sales & Operation Planning (S&OP) tool is, first of all the process that considers all operations in one complex organisation. This is Management business tool which ensures that all organisation’s aspects are aligned, focused and adequately resourced to deliver expected results.

S&OP cycle is forward looking into 5 steps where every single step is a base for the next step all the way to the management final stage where the key decisions are made. High level of discipline and dedicated resources are necessary to have for full and successful implementation.

The S&OP process is central to developing good foresight, typically starting with a demand forecast that uses inputs from sales and key customers. This forecast should be aligned with the existing production and distribution capacity. Constrains are then going to the further discussion and executive team sign off process. As an output of this process, we should have identified the key areas that are under the risk or underperforming, and set the corrective actions. This process can generate more profit and better utilise our capacity and infrastructure.

If done right, all these activities occur in a series of meetings with different and specific input where each session has its own output. Still, the remaining challenge is to constantly balance your demand vs. supply chain costs and service level. 

Doing the S&OP right can provide Company the competitive advantage.