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Sales & Operation planning process
- 1. Sales & OperationPlanning Process Prepared By: Dipesh Kashinath Pabrekar
- 2. Sales & OperationsPlanning – S&OP Definition A process to develop tactical plans that provide management the ability to strategically direct its businesses to achieve continuous basis by integrating customer-focused marketing plans for new and existing competitive advantage on products with the management of the supply chain. The process brings together all the plans for the business (sales, marketing, development, manufacturing, sourcing, and financial) into one integrated set of plans.
- 3. Demand & SupplyChallenges Poor coordination of demand & supply Lack of documented processes/ SOP’s Breakdown in communication due to lack of quality and availability of data Lack of leadership in getting agreement on S&OP Plans Lack the right metrics to drive value or to determine same Challenges
- 4. Need for S&OP Supplyinterruptions, on time delivery issue, lower profits and/ or loss of sale Excessive on hand inventories & obsolescence Absence of teamwork & shared risk management among internal functions Material/product shortages- increased expediting Unacceptable lead timesPoor collaboration among the stakeholders- internal/external (finger- pointing) Ineffective utilization of resources, and /or lack or resources when needed Bottlenecks and constraints management on the supply side To Manage
- 5. Objective of S&OP Supportsand measures the business plan Ensures that the strategic plans are realistic before being passed to tactical planning Enables the organization to effectively manage changes to plans Provides for the effective management of finished goods inventories and order backlog to support customer service Enables performance measurement to identify when actual performance has deviated from the plan Enables the organization to be focused, aligned, and engaged.
- 6. Major Attributes ofS&OP Connects business planning to tactical planning. Balances supply and demand at the product family level Enables in a better understanding of the customer and market opportunities and company capabilities Involves sales, marketing, manufacturing, logistics, finance, and other departments S&OP is a demand- and strategy-driven process
- 7. S&OP Monthly Process Step5 Exe SOP Meeting Step 4 Pre SOP Meeting Step 3 Supply Planning Step 2 Demand Planning Step 1 Data Gathering Statistical Forecast Field Sales Worksheet Management Forecast 1st Pass Spreadsheet Capacity Constraints 2nd Pass Spreadsheet Recommendation for executive S&OP Decisions
- 8. S&OP – BalancingAct S&OP Process Supply Demand Forecasts Actual Orders Inventory Supply Orders Resources/ Capacity
- 9. Pillars of SuccessfulS&OP S&OPTieredPlanning Integratedsub process Leadership Accountability DeepAnalysis PerformanceMatrix GridsandGraphs Continuous Improvement
- 10. Benefits of S&OP Ideas for process improvement come from the S&OP team participants – hence more realistic S&OP enables continuous monitoring, feedback, and sharing of improvement ideas Once S&OP teams see their ideas are heard, they will continually seek ways to improve their own performance Encourages employees to take ownership and reinforces team working, thereby improving level of motivation Establishes operational plans consistent with the business plan Continually updates the production, financial, and sales plan Provides for cross-functional planning Establishes regular meetings with senior executives to resolve demand versus supply trade-offs Checks availability of resources to validate the production plan Increases teamwork and collaborative skills
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