Sales and operations planning, also called aggregate planning due to its multi level planning and implementing processes. It is a process where executives continuously inspect factors affecting sales, finance, marketing and operations. By this, projections for future demand and supply can be devised, which provides greater visibility into a company’s business operations. S&OP is a decision making process that ensures uniformity of the business plan at all levels of operations –internal and external. After studying the patterns of resource allocation in a company, it makes sure that a single business plan is being followed in all areas of business.
During the process, any discrepancy in levels of production and supply is identified, and later removed which optimizes the process, and yields better results for the company’s commercial growth.
Usually, companies operate their planning processes in a departmental order, which often compromises uniformity and integrity. This lack of consistency results in a dispersed planning data, not aligned with other aspects of planning. The first step to sales and operations planning reduces any such possibility by consolidating your planning data across the enterprise, and ensures that your strategies are aligned with other processes as well.
One of the key processes of sales and operations planning involved integration of financial aspects across the organization. All the stakeholders come together, and sit to discuss the interdependency they have over each other and how it can be improved through better cooperation. They jointly plan out future supply of resources to the company, and how they can achieve optimal financial equity for the business.
Executives from all key departments review future business strategy, and implementation of those strategies in a top-down order so that a single operational plan is followed at all levels. They are proactive in their approach to tackle any future problem that may likely occur, and prove to be an obstacle in conducting regular sales and supply operations.
Companies that use S&OP are able to provide you with a number of significant business improvements such as greater accuracy in budget forecasting, better inventory management, timely awareness of demand and supply across the enterprise, and an effective product lifecycle process –cost-friendly and steady.