Sales & Operations Planning is a business planning process that aims to perfectly align supply and demand. The process is characterized by the following elements:
- Both the demand (sales) and supply (production, transport and purchasing) side work with 1 plan.
- The process consists of a (usually monthly) cycle of meetings, where each meeting adds to the insights in the future to balance the supply and demand.
- Sales and Operations participate, under the leadership of Supply Chain and all participants have clear roles and responsibilities
- The horizon is 1-12 month, where the hot spot is 2-3 months.
What are the benefits?
The benefits of S&OP mainly come from the alignment of sales and operations, that create opportunities for aligned optimization of efforts and reduction of waste due to misalignment. Examples are:
- Reduction out of stocks
- Optimization of stock levels
- Reduction of non-sellable stock and/or waste
- Optimization of promo-planning
- Optimization of production planning (batch-size/frequency)
- Optimization service levels
What else do you notice?
Besides these hard and tangible results, organizations will notice changes in the way the organization operates:
- Improved alignment improves the cooperation between Sales and Operation
- The operation will be steered proactively, which creates stability in the operation.
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