No matter what industry you’re in, supply chains are all over the news. There have been big changes in global supply chains that have happened over the last year and there are more supply chain changes on the way.
This means our companies need more robust responses to supply chain problems. S&OP is one way to create a responsive and adaptive operations plan that will allow your company to weather any supply chain storm. Let’s take a look at how S&OP works.
What is Sales & Operations Planning?
Here’s what everyone gets wrong about S&OP. Many executives see S&OP as a new way of managing their supply chains, but it’s actually so much more than that.
Sales and operations planning integrates your operations with key factors that drive how your business uses supplies. Rather than having separate branches, such as sales and marketing, siloed off from the rest of your company, sales and operations planning integrates everything into a holistic way of conducting business. This allows your company to be more responsive to changes in the market as well as the supply chain.
What are the Benefits of Sales & Operations Planning?
There’s a lot your business stands to gain from S&OP.
Right now, the different divisions of your company are fighting against each other to stay afloat. Rather than having your company move as one holistic body, you have several separate branches that are fighting against each other for resources and dominance. Sales & operations planning integrates all of these efforts to sustain the overall business rather than just individual departments standing.
This creates benefits that are business-wide. Companies that integrate sales & operations planning see everything from a boost to their sales to an increase in yearly revenue. There are even 2% to 4% hikes in overall earnings after integrating successful sales and operations plans.
How S&OP Integrates With Your Existing Business Planning
Many executives see sales and operations planning as an invasive way of restructuring their business. However, this is far from the truth. Sales and operations planning is actually easy to implement and only requires new ways of approaching information you already have.
Here’s how it all breaks down. The separate departments of your company already have plenty of information about sales, supply chains, and other logistics. Sales and operations planning takes this information and reintegrates it into a new framework that sees your company as one collective unit rather than competing departments.
Here’s the five-step process for supply & operations planning.
- Product Review
- Demand Review
- Supply Review
- Finance Review
- S&OP Pre-Planning and Integration
It’s all about making the information you already have work for you.
S&OP and the Challenges Ahead
There are supply chain shake-ups across industries. Companies are still debating on how best to handle these changes to their supply chains. However, sales & operations planning allows for your business to be more responsive and gives you a better way of approaching these oncoming changes.
What’s Your Next Move?
What’s the next move for your company? Sales & operations planning gives your business a way of navigating through the uncertain waters that businesses are currently facing. They’re professionals that can assist you with transitioning into this new style of operations planning.
Whether your business is ready or not, there are challenges coming your way. Are you ready to face them?
