Sales & Operations Planning describes the holistic approach within a company in which the operational business is managed from the order intake. The process links the various business units and their individual targets with each other in order to fully exploit the existing market potential.
The Sales and Operations Planning process links sales with other operational areas such as purchasing or production. S&OP is designed to ensure that the key areas of a company work together to make joint decisions and create a basis for joint capacity planning. This integrated business management process is particularly important for goods with short product life cycles and high fluctuations in demand, such as seasonal goods. With a strategic S&OP process, the planning and management of commodity flows is simplified. In this way, effective supply chain management can be achieved. Sales and Operations Planning increases supply chain profitability and leads to better business performance.
Coordination between the departments involved (for example, sales, marketing, procurement, manufacturing, transportation and finance) is difficult and costly. Sales & Operations Planning, on the other hand, enables a holistic planning process that effectively and efficiently aligns all processes as well as supply and demand - in a practical and reliable manner. There are clear responsibilities and procedures in the monthly process:
Especially in today's world, where the number of participants along the supply chain is increasing and the growing variety of products is creating increasing demands, S&OP is important in order to bring new products to market on time and at the same time minimize the risk of out-of-stock items in discontinued products. The goal of Sales and Operations Planning is to create a cross-company sales and procurement plan that unifies the company's goals. In this way, demand and the satisfaction of demand are to be aligned. In general, then, the goal of S&OP is to gain a holistic view of planning by integrating new departments into the forecasting process. In this way, work can be done more efficiently and sustainably overall. Sales and Operations Planning should therefore also improve communication between the individual departments and thus contribute to successful planning within the company. Conversely, the flow of goods can then be planned and controlled effectively with few resources and customers can be served in the best possible way. Overall, there is a reduction in inventory costs and less manual work for employees. The optimal order quantity for purchasing and production is determined and all processes are mapped transparently.