InventoryControl melalui Sales and Operation Plan (S&OP) - Pintu masuk meningkatkan daya saing - 2 Days Course Pendahuluan: · Situasi persaingan yang ketat dan sistem bisnis yang semakin kompleks menuntut perusahaan untuk meningkatkan koordinasi fungsi-fungsi internalnya. · Seringkali,
Inventory Control melalui Sales and Operation Plan S&OP - Pintu masuk meningkatkan daya saing – 2 Days Course Pendahuluan Situasi persaingan yang ketat dan sistem bisnis yang semakin kompleks menuntut perusahaan untuk meningkatkan koordinasi fungsi-fungsi internalnya. Seringkali, fungsi-fungsi internal perusahaan justru berjalan masing-masing, bahkan saling bertentangan. Misalnya ü Bagian sales berupaya mengejar target penjualan dengan mengejar order customer. Namun, pada kenyataannya, pemenuhan order justru bermasalah. ü Bagian production berusaha mengejar penggunaan kapasitas tingkat utilisasi. Namun, sebagian jenis hasil produksi overstock, sedangkan sebagian lainnya justru out-of-stock. Padahal, production plan telah berulang kali direvisi untuk menyesuaikan permintaan sales. ü Bagian logistik juga mengalami masalah dalam penyediaan raw material. Peramalan kebutuhan raw material jenis, jumlah, dan waktu ternyata meleset karena perubahan production plan. Pengadaan material harus disesuaikan dengan perubahan permintaan produksi, padahal prosesnya terkendala banyak hal, seperti lead time, dsb. Banyak masalah lainnya yang terjadi karena tidak selarasnya fungsi-fungsi internal perusahaan tersebut. Masalah di atas menjadi semakin kompleks dengan meningkatnya persaingan, variasi produk yang tinggi, dan product life cycle yang pendek, yang berdampak terhadap ketidakseimbangan demand dan kapasitas. Untuk menyeimbangkan demand dan kapasitas tersebut, perusahaan harus membuat Sales and Operation Plan S&OP. S&OP merupakan pintu masuk menuju master production schedule yang akan membuat produk sesuai prioritas kebutuhan customer. Dengan melakukan 5 langkah S&OP, perusahaan dapat memenuhi customer order tepat waktu dan dengan cost yang minimal. Peserta akan diajak untuk bagaimana merencanakan implementasi S&OP di perusahaannya. Pelatihan ini sangat penting bagi Director Sales & Marketing Manager Manufacturing Manager Production Planner Material Manager Supply chain manager Master Scheduler Demand planner Supply planner Metode Pelatihan Pelatihan ini menggunakan metode interaktif. Peserta dikenalkan kepada konsep, diberikan contoh aplikasinya, berlatih menggunakan konsep, serta mendiskusikan prosedan hasil latihan. Materi Hari ke 1 Ringkasan Materi Master planning of resource model Apakah sales & operation planning Apa manfaatnya bagi seluruh fungsi internal Kenapa perlu melibatkan pimpinan puncak Apa hubungan S&OP dan ERP software Bagaimana S&OP mendukung supply chain management Input yang perlu bagi S&OP demand planning sales forecasting, resource planning supply input, bagaimana menyeimbangkan demand & supply Hari ke 2 Ringkasan Materi 5 langkah Sales and Operation Plan Product families, data requirement Demand planning process untuk make to stock dan make to order Supply planning process bagaimana menyesuaikan supply dengan demand untuk memenuhi inventory/backlog make to order, mengembangkan alternative skenario untuk masalah resource yang dibutuhkan Resource planning menghitung kapasitas S&OP untuk multi site & multi business Latihan beberapa kasus S&OP dengan beberapa scenario Menyiapkan policy untuk S&OP Live pilot implementasi S&OP di tempat anda Efektif Peserta 20 orang. Biaya Pelatihan TBA Workshop Leader NQA Lead Tutor Hubungi NQA Training Division +6221 426 0778 trainingLangkahpertama yang kamu ambil dalam perencanaan sebuah proyek adalah menentukan konsep dan inisiasi terhadap suatu proyek. Pada fase ini sangat penting untuk kamu menemukan konsep yang jelas dan realistis terhadap proyek yang akan kamu lakukan.Sales and Operations Planning S&OP Process, Challenges, and Expert Tips Sales and operations planning S&OP is a popular process that aligns a company’s diverse functions while balancing supply and demand. S&OP gives executives a comprehensive overview of the business so they can grasp where it stands in all its complexity. This allows them to continuously match high-level strategy with day-to-day operational tactics in all departments. Simply put, a company can run into trouble if it sells far more than it produces, or if it produces far more than it sells. The goal of sales and operations planning is to keep everything in balance. With sales and operations planning, executives can manage the entire supply chain, optimize resources, and maximize profits. The high-level strategy in the annual business plan is integrated and aligned with the sales plan, production plan, marketing plan, new product development NPD plan, inventory/backlog plan, financial plan, and more. The sales and operations process alerts executives to timely adjustments they should make in any area. Here’s how the American Production and Inventory Control Society APICS defines S&OP “The function of setting the overall level of manufacturing output production plan and other activities to best satisfy the current planned levels of sales sales plan and/or forecasts, while meeting general business objectives of profitability, productivity, competitive customer lead times, etc., as expressed in the overall business plan.” In this article, you will learn about the sales and operations planning process and best practices, including steps for success and a discussion of common challenges. You’ll hear experts give their insights and tips, and they’ll provide their thoughts on the future of S&OP. In this article Benefits of Sales and Operations Planning Approaches to the Sales and Operations Planning Process Step-by-Step Practices for the Sales and Operation Process Sales and Operations Planning Tips from the Pros How to Know if Your Sales and Operation Plan Is Successful Understanding Sales and Operations Planning Terms Common Challenges in Sales and Operations Planning What Does the Future Look Like for Sales and Operations Planning? Effectively Manage Sales Operations Planning with Smartsheet Benefits of Sales and Operations Planning Sales and operations planning, sometimes called aggregate planning, started in the 1980s as a way to manage problems caused by overproduction or underproduction, including wasted resources, poor customer service, and the hit on a company’s bottom line. Before the 1980s, companies tended to rely on more siloed approaches, focusing planning efforts on the product level. Today, major companies such as Coca-Cola, Procter and Gamble, Eli Lilly, and Dow Chemical use sales and operations planning. At its best, S&OP offers distinct benefits that old-school business plans can’t achieve Better data and collaboration between departments allow for frequent adjustments in the supply chain, which better balances supply and demand. Companies can better optimize resources, which reduces waste and increases efficiency. In turn, this newfound efficiency enables companies to maximize their profitability continuously. Improved inventory and backlog management allows for more timely customer service. As companies stagnate, S&OP can fuel a resurgence by finding ways to adjust to changing internal or external conditions. Unbiased, more actionable data can lead to better Key Performance Indicators KPIs for each department, tying in directly with the company’s KPIs. As data flows more seamlessly between departments, it is more timely and accurate - this allows the company to operate off one set of numbers rather than siloed, disputable data. You may hear people in the field refer to “one set of numbers to run the business.” Keep deals moving forward with sales pipeline management in Smartsheet Smartsheet is a cloud-based platform that allows sales teams to effectively manage pipelines by creating one location to track and manage efforts, surface open and at-risk opportunities, and provide real-time visibility to improve forecasting. See Smartsheet in action. Watch a free demo Approaches to the Sales and Operations Planning Process While approaches vary among industries and companies, they typically focus on a monthly S&OP planning process with a long-term planning horizon ranging from 18 to 36 months. The annual overall business plan ties in with all other company plans, which are regularly reviewed for alignment. Consistent, structured meetings that require participant preparation, are held. These are often weekly meetings to prepare for the monthly S&OP executive meeting, where the big decisions are made; therefore, it’s essential to have the right people present. During the meeting, attendees review tactical plans in every area to ensure alignment with the company’s business plan. These typically include the sales, production, human resource, engineering, marketing, new product development NPD, inventory/backlog, strategic initiatives, and financial plans. The meeting participants represent the various departments and are empowered to make decisions then and there, as is necessary for the process to work. Companies may use top-down planning or bottom-up planning. In top-down planning, a single sales forecast drives the process managers create tactical plans and divide resources based on that. Bottom-up planning is used when the manufacturing schedule isn’t stable instead of operating from the top with a sales forecast, they work from the bottom by analyzing what is needed to produce various products or product families. Once that work is complete, companies solidify production plans, which can be level, chased, or mixed. In level, production remains constant, usually to increase cost-efficiency and keep the cost of holding inventory low. In chased, production always chases demand. It’s used when the cost of gearing up is relatively low and/or when the inventory storage cost is high. In mixed production, a custom plan takes the best advantage of the various factors in different situations. Step-by-Step Practices for the Sales and Operation Process A company might follow one of a few slight variations of the step-by-step S&OP process. The accompanying graphic shows a monthly five-step process data gathering, demand plan, supply plan, pre-S&OP, and finally the executive S&OP meeting, where decisions are made. Sales and Operations Planning Tips from the Pros He has been implementing S&OP best practices for more than 20 years in Asia and the previously with retailers such as Levi Strauss and Ermenegildo Zegna, and retail consultancy Kurt Salmon Associates. He advises focusing on people, process, and practice People “Ensure that the implementation is heavily cross-functional and that different functions are bringing different perspectives to the table. Ensure that people are engaged in the process by clarifying roles and accountabilities, fostering an environment for open discussions, and helping people understand that their most important role is in making sure that you smoothly hand off your finished product to the next person in the process.” Process “Clearly define the end-to-end process steps, and delineate who is Responsible, Accountable, Consulted, Informed RACI. Finally, develop a calendar so that activities are done timely, and make sure someone is facilitating that calendar.” Practice “Make sure people understand that a well-executed S&OP process does not happen overnight, that it takes practice, and that it is OK to make mistakes along the way. Instilling a culture of continuous improvement is key.” “First, make sure a diverse group of people across the organization are able to participate in the process. S&OP is not just about balancing supply with demand, it is about aligning the organization. And without including people from across the organization, it’s easy to end up with a great plan that never gets executed. Second, if alignment is a key component of S&OP, there has to be something to align to, and this should be the high-level strategy for the organization. Effective S&OP isn’t a stand-alone effort, it really is the bridge between the strategy of the organization and operational execution. When strategy and S&OP are disconnected, you end up executing perfectly on all the wrong things. Third, as part of the plan, try to assume and predict where it will fail and build mitigation plans. This way, when challenges to the plan surface, the organization isn’t caught off guard. Rather, they anticipated them and already know what to do about them.” “Never lose sight that the goal is to increase profitable revenues. Too many companies morph this planning process into a new department, a new set of procedures, bureaucratic stuff that strangles selling. Cross-selling between business units is hard for lots of reasons. Everyone who isn’t in the field thinks it’s easy. There are lots of legitimate barriers. Do not expect a guy in Unit A to sell products made by Unit B. That is never going to happen. Incentives must be such that the guy in Unit A is encouraged to get his customer to buy something from Unit B. This incentive can be a finder’s fee, a referral fee, or something else. And Unit B has to teach Unit A, not how to sell, but how to recognize opportunities for Unit B and vice-versa. Have low expectations. Even though it is the Holy Grail for many multi-product, multi-division companies, success is elusive. One good objective … is to design a product forecasting system that overlays Units A and B. Forecasting is tough, but doable. A good forecasting model helps balance inventory, directs supply chain managers, and impacts sales compensation. A good management technique is to establish a three-month task force to get it done, and include salespeople on the task force. If it goes past three months, it is doomed.” Make sure different departments are speaking the same local language. Take the time to be clear. Many times, they’re using terms differently. “I don’t think sales and operations necessarily understand each other. … It boils down to communication.” To do a good sales forecast, account for changing circumstances. Historical data needs to be placed in the context of what’s happening now. At a smaller company, a top seller’s personal problem, such as a divorce, could even have a large impact. “Base your forecast off of real events.” Here’s a quick look at more sales and operational planning tips and best practices Be aware that the biggest factors affecting a business are often external, so create S&OP initiatives to deal with them. External factors include the actions of your customers, partners, and competitors, among other things. Leaders need to step in to get beyond department conflicts that can otherwise drag down the whole company. Use technology, including S&OP dashboards and spreadsheets, to communicate key company information. Integrate supply data with demand data. Too often, various spreadsheets and systems don’t “talk” to each other effectively, which results in siloed data. Don't get lost in data. Focus on what really matters with KPIs, both within teams and company-wide. Use S&OP to deal with an unconstrained demand for products. Too often, companies don’t temper their sales goals with a realistic view of what they can supply, especially in the short term. S&OP helps balance supply and demand. Use a phased, incremental approach to developing S&OP. Remember, it doesn’t happen overnight. How to Know if Your Sales and Operation Plan Is Successful Here’s how you know when you’re succeeding, says Dalai “At a simplistic level, people are not blaming each other; rather, they are admitting mistakes, praising good efforts, and lending help to other people on the team when needed. When most of the conversation is about what the other person or function did wrong, it is a good indication that S&OP is not working well. More technically, there are KPI’s related to how well the sales and operation plan is working; for example, in retail, KPIs would be High stock fill rates or low stock-out rates Good inventory turns and high sell-throughs Timely execution of inventory flows from the factory to distribution center to the shop.” As Dalai notes, different industries and companies will have their own KPIs to measure S&OP success. As the Choice Group’s Brost explains, “To know if your plan is succeeding requires answering two questions. First, did we execute the plan we had in place? And second, did we achieve the results we hoped for? The first question has to be answered first because it is your leading indicator. You can never know if the plan was successful until you know if you actually executed the plan. Once you know if you executed the plan, then you can ask if it delivered the desired results; these desired results should have been defined as part of the plan. For example, what ROI can we identify from our investment of resources in various parts of the plan?, and what ROI do we require to justify those investments?” Understanding Sales and Operations Planning Terms Terminology can get confusing, as different people often have differing interpretations. Here are answers to frequently asked questions regarding S&OP-related topics and organizations. How does a sales plan differ from a sales operations plan? A sales plan typically sets sales goals and describes tactics to achieve them. A sales operations plan may refer to either a sales operations department plan, or to the entire concept of sales and operations planning S&OP. What is aggregate planning? This term is sometimes used interchangeably with sales and operations planning S&OP. More specifically, it may refer to production planning that gives executives a view into necessary resources and their costs. What is integrated business planning? This is similar to sales and operations planning in that it involves planning throughout the supply chain. Some may use the term interchangeably with S&OP, while others say it’s an extension of S&OP or a more mature version of it. What is an operational plan? A detailed plan that specifies how a team or department will contribute to the company’s goals. What does AOP mean? The annual operations plan AOP lays out the company’s targets for sales and supply. What is Enterprise Resource Planning? Enterprise resource planning ERP is the system or process by which a company usually a manufacturer integrates its various departments. ERP software tries to incorporate key pieces of information from the departments or teams. What is the Institute for Supply Management? It is a nonprofit, educational organization for people employed in the supply management profession. What is the Supply Chain Council? In 2014, the Supply Chain Council merged into the American Production and Inventory Control Society, or APICS. The council is now known as the APICS Supply Chain Council. What is the SCOR planning model? The Supply Chain Operations Reference SCOR model is endorsed by the Supply Chain Council. It’s a cross-industry, standard diagnostic tool for supply chain management. What is SOP vs. S&OP? SOP is completely different. It stands for standard operating procedure, and is a set way of performing tasks in a given organization. Common Challenges in Sales and Operations Planning Challenges in sales and operations planning are common. A 2013-14 survey by Supply Chain Insights found that only 43 percent of companies say their S&OP process is effective. Here’s what the experts say about the most common difficulties in sales and operations planning today Suresh Dalai “It [the challenge] is in the quality of the collaboration among functional team members. Each member has to know their role, be accountable, and make sure that each member communicates well so that the next person in the process understands what the person before him/her has done. And when mistakes occur, team members need to be able to come together and openly discuss what/who came up short and learn from it. In fact, a process does not have to be great. The people - and how well they work together - can make it great.” Kyle Brost “The reality of S&OP is that it’s a process heavily reliant on historical data, which very likely doesn’t predict the future. Recognize going into the process that a number of market and organizational factors will influence the success of your sales and operations plan. The biggest challenge is being able to identify patterns and draw connections between internal and external factors that may influence supply/demand and your S&OP process. Because this is challenging, too many organizations default to just relying on the historical supply and demand data that they have. Additionally, recent sales and operations experiences often get weighted more than they should, because they are fresh in people’s minds. Try to avoid making big decisions based on a single recent experience.” Ali Mirza Sales forecasting remains a frequent problem. It’s often arbitrary, such as a five percent sales growth being based more off of where the company wants to be than what it can realistically achieve. “Sales managers are expected to grow their territory, so they forecast a growth goal. … Nine times out of 10, the forecast is incorrect,’’ Mirza says. People in sales will often say that it’s not arbitrary, that they do have a rationale behind the forecast, but “typically, the rationale and logic is also flawed.” They need to consider the various changing factors at play and not just look at the historical data. Here’s an overview of other common S&OP difficulties Sudden changes in supply and demand such as with a new product Lack of executive support Inadequate engagement between departments Focusing on a single target number instead of a range Too many numbers and not enough focus Conflicting numbers Lack of documentation which leads to repeating history S&OP software that requires organizational change for effective use Organizational change required by the process itself An S&OP leader who doesn’t act as the necessary profit center manager Executives who fail to understand supply chain complexity Translating the planning process to effective execution What Does the Future Look Like for Sales and Operations Planning? Two experts weighed in on the future for sales and operations planning. Dalai sees people as being key to the future. “Increasingly sophisticated technologies and analytics will continue to be released to improve the S&OP process and effectiveness. However, at the end of the day, it is the cross-functional collaboration - people understanding what they have to do and trusting that other people will do their part - that drives success in S&OP. And this cannot be achieved by technology or analytics,” he says. Brost foresees S&OP having a growing relationship with Organizational Network Analysis, a structured way of visualizing how information and decisions flow in an organization. “I see S&OP and Organizational Network Analysis merging in time. The best business decisions are usually arrived at by combining quantitative data with qualitative data - S&OP is the quantitative piece and Organizational Network Analysis is the qualitative piece,” he says. “Also, executing on the sales and operations plan requires strong insight about how work is actually done in the organization, not just how the processes are mapped on paper. When organizations can combine these two approaches, the result will be a much more powerful plan that factors in the nuances of the organization itself.” Effectively Manage Sales Operations Planning with Smartsheet Empower your people to go above and beyond with a flexible platform designed to match the needs of your team — and adapt as those needs change. The Smartsheet platform makes it easy to plan, capture, manage, and report on work from anywhere, helping your team be more effective and get more done. Report on key metrics and get real-time visibility into work as it happens with roll-up reports, dashboards, and automated workflows built to keep your team connected and informed. When teams have clarity into the work getting done, there’s no telling how much more they can accomplish in the same amount of time. Try Smartsheet for free, today.
FreeTemplate -Sales & Operations Planning. This template is set up for use in Microsoft Excel and is designed to help you work through the stages of a great S&OP program which will improve your forecasting and planning in your organisaton. Check out our linked Blog post on the topic!
Jika Anda ingin memberikan pengalaman pelanggan yang luar biasa, proses bisnis Anda harus disesuaikan sehingga setiap langkah mulai dari proses produksi hingga pengiriman bisa dijalankan dengan baik. Hal ini berarti seluruh proses di dalam supply chain dari ujung ke ujung harus berjalan and operations planning S&OP adalah salah satu elemen dalam supply chain yang akan membantu Anda mencocokkan permintaan dan penawaran di pasar dengan lebih baik. Apa itu sales and operations planning? S&OP adalah aspek perencanaan di supply chain yang bertujuan untuk menyelaraskan operasi sehari-hari dengan strategi perusahaan dengan membuat rencana bisnis berbasis konsensus yang terpadu. Untuk membuat S&OP diperlukan kolaborasi antara departemen penjualan dan operasi. Dalam praktiknya, pembuatan S&OP membutuhkan partisipasi dari berbagai departemen lintas fungsi yang terlibat erat dalam sisi permintaan dan penawaran. Biasanya departemen yang terlibat antara lain pemasaran, pengadaan, manufaktur, transportasi, dan keuangan. Bagaimana langkah implementasi S&OP?S&OP umumnya terdiri dari beberapa langkah, biasanya dilakukan dalam pertemuan bulanan. Langkah dalam proses perencanaan setiap perusahaan bisa jadi berbeda-beda, tetapi semuanya memiliki kesamaan seperti berikutPengumpulan data mengumpulkan prakiraan dan informasi yang ada tentang variabel-variabel kunci, seperti inventaris, penjualan terkini, dan uang yang ada;Perencanaan permintaan proses untuk menganalisis, memperkirakan, dan mempengaruhi permintaan, termasuk mempertimbangkan permintaan dan pembentukan permintaan;Perencanaan produksi supply menilai kapasitas dan kendala produksi dan distribusi;Rekonsiliasi menyelaraskan permintaan dan rencana produksi, memastikan bahwa kedua hal ini memenuhi persyaratan keuangan dan tujuan perusahaan dan menyiapkan rekomendasi; Rapat eksekutif menerima masukan akhir dari tim S&OP, meninjau rencana dan menyetujui versi erat kaitannya dan seringkali merupakan komponen dari perencanaan bisnis terpadu atau integrated business planning, sebuah proses perencanaan yang lebih komprehensif dan jangka panjang yang mengumpulkan rencana setiap departemen dan mengaitkannya dengan kinerja dan strategi keuangan mengukur S&OP?Saat mengevaluasi proses S&OP Anda, ada beberapa metrik yang dapat Anda gunakan untuk mengukur kinerja baik dari sisi keuangan ataupun permintaan dan penawaran. Metrik keuangan akan menunjukkan kepada Anda bagaimana kinerja bisnis dari perspektif keuangan, diukur dengan memperhatikan Total penjualan dalam satu periode misalnya, bulan, kuartal, tahunTotal penjualan versus perkiraanMargin kotorModal kerja versus rencanaMetrik permintaan dan penawaran akan membantu Anda menentukan apakah perkiraan Anda akurat dan permintaan sesuai dengan permintaan versus aktualPerkiraan produksi versus aktualPerputaran persediaanPemanfaatan kapasitasPengiriman tepat waktuAkurasi dalam pengiriman pesananCycle time
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DESKRIPSI Sales and Operation Planning S&OP merupakan hal yang penting bagi sebuah perusahaan untuk meningkatkan performansi Supply Chain Management. Sales & Operations Planning S&OP terbukti menjadi cara ampuh seimbangkan Supply dan Demand. S&OP, merupakan dasar dari pembuatan rencana aktifitas lainnya seperti rencana operasional, financial, kapasitas, man power dan lainnya. Ketidakakurasian dan kegagalan S&OP akan berakibat buruk bagi aktifitas yang lain, seperti tingginya inventory, kekurangan cash dan lainnya. Maka pada saat ini, banyak perusahaan besar yang sudah mengaplikasikanS&OP. Sales and Operation Planning Training akan mengulas pemahaman terhadap aspek konseptual S&OP serta hal hal yang harus dijalankan oleh suatu perusahaan dalam mengimplementasikan S&OP. TUJUAN Setelah mengikuti training ini diharapkan peserta dapat memahami tentang konsep aplikasi dan langkah langkah dalam menerapkan Toyota Production System. MATERI TRAINING Pengantar Sales & Operations Planning Pengantar Supply Chain Management Bagaimana S&OP support Supply Chain Management? Tools-tools dalam S&OP Lima Langkah Proses S&OP Proses Demand Planning Proses Supply Planning Orgainzation for S&OP Studi kasus S&OP PESERTA TRAINING Umum Praktisi Industri dan Pemerintah, Akademisi Dosen dan Mahasiswa, serta pengusaha yang ingin mempelajari dan memperdalam ilmu Supply Chain Management. Instruktur Dr. Ir. Elisa Kusrini,MT,CPIM, CSCP dan Tim Instruktur
Marketingmix ( Bauran Pemasaran ) adalah variabel - variabel penting konsep pemasaran yang akan menentukan strategi pemasaran usaha atau bisnis. Pada dasarnya, Marketing Mix terdiri dari 4P yaitu ( Produk, Prce, Place dan Promosi ) namun seiring perkembangan, kini memiliki tambahan 3 variabel (3P) yaitu People, Process dan Physical Evidence.
Henry Ford, business magnate and founder of the Ford Motor Company, once said, "Quality means doing it right when no one is looking." If you want to create a quality product and provide an outstanding customer experience, your business processes should be fine-tuned so every step — from manufacturing to delivery — is well-executed. Processes can be made for just about anything. And the sales and operations planning S&OP process is crucial to any successful business. Let's demystify sales and operations planning S&OP and learn more about the S&OP process. Sales and operations planning S&OP is a business management process where leadership and executive teams meet to ensure each business function is aligned to balance supply and demand. S&OP requires cross-organizational collaboration to create detailed forecasts for predicted sales. So, what's the purpose of S&OP? To coordinate across business units, increase transparency, balance supply and demand, and to achieve profitability. S&OP can occur on a monthly, yearly, or even two or three-year basis, depending on the company and its goals. Here are some key benefits to sales and operations planning S&OP Increased transparency between departments Informed decision making about a product's demand and supply Improved inventory management Better sales and budget forecasting A clear understanding of a product's lifecycle and its management Streamlined processes that improve the overall customer experience S&OP Process Steps Forecasting Demand planning Supply planning Pre-S&OP meeting Executive S&OP meeting Finalize and implement S&OP The S&OP process includes forecasting, demand and supply planning, and executive review. The goal is to coordinate sales and operations planning across business functions so they're all on the same page. The exact steps can vary depending on the company, its products, and its industry. 1. Forecasting At this stage of the S&OP process, data is gathered about prior sales and forecasts are made for future sales. It's important to consider any internal and external factors that can impact sales industry, customers, competition. Any trends will be identified and analyzed. 2. Demand planning Demand planning is when cross-functional collaboration comes into play. The forecasts are analyzed, and adjustments are made to inventory and customer service policies based on the product demand and sources of demand. The demand can be measured in either revenue or units of a product. 3. Supply planning During supply planning, representatives from finance, operations, and materials to evaluate capacity. They'll determine if there are any constraints on people, machinery, and suppliers. From there, a supply plan is created that will account for any capacity constraints. 4. Pre-S&OP meeting During this stage of the S&OP process, leaders from finance, sales, marketing, operations, materials, product management, and human resources meet to collaborate. They'll compare the forecasts to the demand and supply plans, and they'll consider the financial impact of the plans. 5. Executive S&OP meeting In this stage, executives meet to analyze all the forecasts, plans, and recommendations from the pre-S&OP meeting. By the end of the executive S&OP meeting, a final sales and operations plan will be approved. 6. Finalize and implement Once the sales and operations plan has been approved, it is time for implementation. After implementation, the S&OP should be evaluated on a regular basis to ensure success. Here's a visual overview of what the S&OP process looks like. Sales and Operations Planning Process S&OP Metrics When evaluating your S&OP process, there are some key metrics you can use to gauge performance. Demand and Supply S&OP Metrics Demand and supply metrics will help you determine if your forecasts are accurate and the demand matches the supply. Demand forecast versus actual Production forecast versus actual Inventory turnover Capacity utilization On-time delivery Accuracy in order delivery Cycle times Financial S&OP Metrics These metrics show you how the business is performing from a financial perspective. Total sales in a period month, quarter, year Total sales versus forecast Gross margin Working capital versus plan S&OP Software Which tools should you use for your sales and operations planning? Instead of solely relying on spreadsheets, here are some software options you can use to streamline your S&OP. 1. Oracle S&OP Cloud Pricing Contact for Pricing Oracle provides process templates you can use to make your sales and operations planning run smoother. You can monitor each stage of the process and dashboards allow you to see KPI summary graphics. It allows you to collaborate with colleagues and assign tasks. Plus, it integrates with Excel. Best for Larger Scale Businesses Oracle S&OP Cloud is tailored primarily towards larger businesses. It includes features that suit the needs of enterprise-level customers, including social collaboration resources, accommodations for organizations with several users, and aggregate planning capabilities for long-term strategic planning decisions. 2. SAP Integrated Business Planning Pricing Contact for Pricing The SAP Integrated Business Planning software makes your S&OP planning quick and agile. Key features include scenario planning, simulations, and advanced analytics so you can stay on top of forecasts and hit your financial targets. Best for a Multifaceted Solution, Extending Beyond S&OP for Supply Chain Planning SAP Integrated Business Planning contains resources that allow for effective sales and operations planning, but the solution's capabilities extend well beyond the practice. It combines S&OP, forecasting and demand, response and supply, demand-driven replenishment, and inventory planning to ensure business continuity through supply chain disruption. 3. Infor Sales and Operations Planning Pricing Contact for Pricing With the Infor Sales and Operations Planning software, you can synchronize demand and supply imbalances, coordinate across business units, and analyze performance. It even includes predictive financial analysis so you can see how business decisions will impact the bottom line Best for Businesses Looking for an Accessible Interface Infor S&OP's user interface's ease of use is one of the software's biggest draws. You don't need to be an IT specialist to leverage it — allowing users closer to your sales and operations planning to manage and keep tabs on the process. If you're interested in a straightforward solution that keeps things simple without sacrificing functionality, look into Infor's sales and operations planning resources. 4. Vanguard IBP S&OP by Wolters Kluwer Pricing Contact for Pricing Vanguard Predictive Planning is an excellent resource for any organization trying to support its S&OP infrastructure with an AI-based, end-to-end impact analysis solution. Vanguard can provide your business with a comprehensive overview of your sales, demand, supply, and production to inform accurate, constraint-based plans — among a wide array of other features and benefits. Best for Businesses Interested in a Collaborative Solution One aspect of Vanguard IBP S&OP is its resources for collaboration across all facets of your sales and operations planning. The platform includes business intelligence software that enables end-users to create their own charts, reports, and dashboards. It also offers automated, easily adjustable workflows, easily visible scenario modeling, cross-department insights, and other features that foster collaboration between sales, operations, and finance. 5. Kinaxis Rapid Response S&OP Pricing Contact for Pricing Kinaxis Rapid Response S&OP is a sales and operations planning solution that can help you improve business outcomes, take more centralized control of your S&OP, reduce costs in supply chain planning, foster collaboration, and generally increase efficiency throughout the S&OP process. Best for Businesses Looking for Solid Out-of-the-Box Features While Kinaxis Rapid Response S&OP does feature some degree of customization, it differentiates itself from the competition with its standard features. Its out-of-the-box dashboards can help you accurately gauge performance immediately — with features accounting for revenue value, ending inventory value, margin percentage, and other key S&OP performance indicators. Sales and Operations Planning Best Practices 1. Have executive ownership of your S&OP. Successful sales and operations planning takes a certain degree of guidance and direction. With S&OP, you're essentially trying to facilitate cohesion between conflicting elements of your business — that's not a responsibility that can be vaguely managed without clearly defined and engaged leadership. The practice requires firm and active executive ownership — typically from someone like a CEO or general manager. There's bound to be some kind of tension between the supply and demand sides of your organization, so you need a central figure ensuring that there are definitive, understood, and consistently enforced standards for how both parties will work with one another. 2. Keep things simple. Companies conducting S&OP have tend to trip themselves up by overcomplicating the process — most notably when it comes to metrics. If you try to keep tabs on too many factors between the supply and demand sides of your business, your planning might wind up being inefficient, and the visibility you're trying to maintain between departments could be clouded. Instead of trying to measure everything you can think of, determine the most meaningful, relevant metrics for gauging how both sides of your business are working together — whether that be measurements of how forecasts are stacking up to actual sales figures, inventory turnover, or any particularly pertinent indicators of how sales and operations are interacting. Try to keep the number of metrics you're tracking between 10 and 15 — make those choices count, and don't let this side of the process get away from you. 3. Maintain records. Successful sales and operations planning is an ongoing process. It leans, in large part, on your ability to learn from your previous hitches and hiccups. That's why you need to keep detailed records of your previous plans and processes. Document most — if not all — aspects of your S&OP efforts. Those reference points can be central to your planning's sustained success. 4. Stress Cross-Functional Engagement Cross-organizational collaboration is at the core of any and all sales and operations planning. Stakeholders from every impacted facet of the business need to be included and involved in the process. Your sales and operations planning won't be particularly helpful or productive if you're only considering your sales org's contributions and interests while ignoring other departments like operations and finance. S&OP rests on your ability to foster cohesion through visibility. Every party involved needs to have a clear understanding of how the others are performing and where they're coming from. That information needs to flow freely between stakeholders. If you want to get the most out of your sales and operations planning, you need to keep everyone in the loop and stress cross-functional engagement. Investing in S&OP resources can be an excellent way to better align the supply and demand sides of your business. With sales and operations planning, you can keep virtually every aspect of your company on the same page — allowing for a smoother functioning, more cohesive organization. Looking for more? Learn how to create a strategic plan for business development next. Editor's note This post was originally published in October 2020 and has been updated for comprehensiveness.
