Businessman touching financial analysis graph with key performance indicators on virtual screen.

Wanted, Dead or Alive: An S & OP that Stays Ahead of the Pack

A step below the Strategic Business Plan is Sales and Operations Planning (S&OP), i.e., a program used to initiate, revise and communicate the business plan with other departments in the company.

Notably the process begins with Sales and Marketing looking at historical sales, analyzing current market trends and then compiling what they believe to be the forecasted demand.

Thereafter, the emphasis is on monitoring the dynamics in the markets and industry and taking actions when necessary to revise the company’s business plan.

This is more easily visualized by the diagram below. 1

The initial and/or revised plan after approval is communicated to Operations, i.e., Manufacturing, Planning, Supply Chain, Engineering and Finance.  It is now up to these departments to determine what resources are needed to meet the Sales and Operations Plan.

There may be instances when the Sales and Marketing plan cannot be met (due issues of resources and/or time constraints). This information is communicated back to Sales and Marketing and the plan may (again) be adjusted.

In this way the company goes about developing and adjusting its business plan to meet the constant changing demands of the market place.

The Bottom Line.

A step below the company’s strategic business plan is the Sales and Operations Planning process.  Sales and Marketing determine the market demand for the company’s products and services and submits this sales plan to Production-Operations Management (P/OM).  P/OM determines if the plan can be accomplished using the resources currently in place and the available time periods. This process repeats itself as often as is necessary to continually meet the dynamic demands of the market place.

1  Introduction to Materials Management, fifth edition, JR Tony Arnold, Stephen N Chapman, 2004, Pearson Education, Inc.

Related Topics

Business Analytics. Today, more than ever, successful companies are using many pieces of information to make decisions that affect their businesses. This information can help a company with growth, cost and profitability. For more on this topic, please follow this link. Enterprise Analytics

 Benchmarking – Operational Audits. For either a manufacturer or service company, an operational audit can be the key to improving performance and customer service. For more on this topic, please follow this link, Benchmarking – Operational Audits

Sourcing Strategies. The strategic sourcing process is a subset of procurement. It is procurement’s responsibility to find and develop competent suppliers that are qualified to provide the firm with its needed materials. For more on this topic, please follow this link, Strategic Sourcing.

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