Ensure goods are consistently available at the right time and place – for higher sales, have in place the following: customer needs by segment, target customers, customer buying behavior, price sensitivity and demand elasticity, decision-making unit and process, sales cycle and lead generation, account coverage and plans, advertising and sales promotion, sales force effectiveness and management and operations excellence. Also, have a manager responsible for coordinating the monthly and quarterly sales and operations planning cycle, facilitate weekly, monthly, and quarterly planning activities, and ensuring consistency, standardization, collaboration, and organizational alignment towards your organization enterprise strategy.
With a unified sales operations and workforce planning, the entire production team from receivables to production to shipping will have to be ready to meet the challenge, and do so just in time, a formal sales and operations planning (S&OP) process is a decision making and communication process that balances supply and demand while integrating all business operational components with customer-focused business plans that links high level strategic plans to day-to-day operations, additionally, sales and operations planning translates your business strategy into operational directives for desired customer service levels, estimated market potential and forecasted future demand.
To arrive at an optimal balance of demand and supply, and profit, Sales and Operations Planning incorporates financial goals and probabilistic scenario modeling techniques, tools, skills and capabilities upfront in one unified plan that drives more profitability. Planning your supply chain is a delicate process of trying to balance demand and supply, potentially across the globe, in a way that provides your company with the right combination of cost control, lead times and service levels, furthermore, the keys to effective integrated business planning is considering your entire business strategy as well as planned and expected demand, updating the plan as shifts occur, executing on that plan, and keeping all affected informed as often as needed.
Effective sales and operations planning (S&OP) enhances the decision-making quality in a business by providing visibility and allowing for agility in portfolio, demand, supply and logistics management, improve forecast accuracy, bias, service level, stock-out rate, and reduce obsolete and slow moving inventory.
Under a quick response system, lead times are shortened sufficiently to allow a greater portion of production to be scheduled in response to initial demand, identify optimal service levels for all products and manage the trade-offs between inventory levels for all products and customer service levels and understand the financial impact to business.
To achieve accurate and realistic demand forecasts, gain insights from market analytics, achieve high service levels while optimizing your inventory mix, and develop supply strategies to support on-time-in-full launches of new products, traditional supply chain design tends to be reactive and lacks the ability to sense, flex, and adapt, exposing your organization to demand volatility, therefore, from a strategic perspective, organizations have to take into account the available capacity in their network, the required flexibility to react to demand signals or supply chain risks and the alignment between organizational organizations, in order to be able to plan their supply chain effectively.
Optimize your demand plan through exception management reporting and What If scenarios since often a lack of transparency across the supply chain is the culprit.
Lead the market and underpin your business strategy through continuous focus, alignment and synchronization across all functions of the business, for example, industrial manufacturers with large product portfolios or aftermarket part mixes face unique supply chain planning challenges from forecasting demand for slow moving items to managing complex distribution networks to planning new product introductions.
Want to check how your Sales and Operations Planning Processes are performing? You don’t know what you don’t know. Find out with our Sales and Operations Planning Self Assessment Toolkit: