SALES & OPERATIONS PLANNING

S&OP is the process with which we bring together all the plans
for the business (customers, sales, marketing, development,
manufacturing, sourcing, and financial) into one integrated set of
plans.
The objective of Sales & Operations Planning is to arrive at a
business Game Plan to help manage and allocate critical
resources to meet the needs of the customer at the least cost to do
so.
What is formal Sales & Operations Planning?


Sales & Operations
Planning


Master
Scheduling
Detailed Planning
& Scheduling
C
A
P
A
C
I
T
Y

P
L
A
N
N
I
N
G



F
O
R
E
C
A
S
T
I
N
G
&
D
E
M
A
N
D


Business
Planning
High Level Enterprise Resource Planning Model
Annually
Monthly
Weekly
Daily
Strategic
Planning
2-10 Years
Forecast
Only
Forecast
Only
Forecast
Only
Forecast &
Orders
Orders
Only
Rough-cut
Capacity
Planning
Capacity
Requirements
Planning
Resource
Planning
GUIDING PRINCIPLES FOR SUCCESSFUL S&OP
IMPLEMENTATIONS

1. Stakeholder commitment
2. One set of numbers
3. Accountability and decision making
4. Alignment of business objectives
5. Appropriate time horizon
6. Understanding the benefits of S&OP

S&OP is a Five-Step Process:
Pre-S&OP and
Executive S&OP
may be combined
into one meeting
improved customer service
reduced inventory
lower manufacturing & distribution costs
better control of overall business performance
increased team work within and across functions
Benefits of S&OP
If implemented and used effectively, S&OP will yield major
benefits to the firm: