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Successful S&OP through Integrated Business Planning

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When it comes to best practice in operations management, few would dispute the value and credibility of sales and operations planning (S&OP).

The problem, however, is that while many believe they understand S&OP, they don’t always realise its full potential because they fail to grasp the true fundamentals of the process. That isn’t necessarily their fault; to some extent, S&OP has lost its way in recent years. Changes in the economy and the dynamics of the manufacturing supply chain, plus the actions and attitudes of manufacturers to those changes, have all had their part to play. And it is also true to say that some S&OP practitioners themselves, have contributed to the devaluation of S&OP as a management process.

Put simply, S&OP ensures the business is working to one agenda: it has one set of priorities, which are then managed through one set of numbers, whilst driving the entire business towards its aspirations and strategic goals. It should a ‘total business management’ process, which integrates the core processes of that business – demand, supply, product management, sales and marketing, and finance – so a picture can be developed over a rolling two-year horizon. No short-termism; no fire-fighting.

Properly implemented S&OP should and, in many cases does, become the heartbeat of a company. Not only do the monthly S&OP meetings take the highest priority but the actions and analysis they trigger govern the whole company’s programme for the months ahead. It is often the case that the biggest fans of the process are sales and marketing because they see it driving the business to their agenda of value growth through product and service innovation and sales excellence. In a typical
monthly S&OP exercise, sales and marketing uses a variety of techniques and rigorous process to establish projections of future demand, to create an updated rolling demand plan. Operations management then develops a realistic supply plan to meet that demand over the next 24 months. Download full white paper below.

Last modified on Tuesday, 11 September 2012 14:21

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