If you’re like most manufacturing leaders, you create your annual budgets and fixed annual operating plan (AOP) for the year and then walk away.You’re thinking your forecast is done. Volumes are set.Detailed departmental budgets are also complete. Operating levels are set. Sales targets and/or commissions are also done. So why should you be concerned by this?
Because, as we all know the best laid plans can always change. Seasonal products often need longer planning and production timeframes, business climates shift, operations teams create new plans to accommodate activities that differ from the financial budget, sales creates opportunities that have not been accounted for in the budget, and unplanned product launches always require additional resources that could not be expected or planned for.
So how are manufacturing leaders supposed to address these common challenges? They need a critical way to connect the sales side of the business with the production and even the procurement side.
Sales and Operations Planning (S+OP) is a business process that connects the strategic planning to the tactical planning of the business.
An S+OP methodology addresses manufacturing business challenges by creating an integrated planning process which reconciles Sales and Operations. It brings together all the plans for the business into one integrated set of plans. This allows for the continuous synchronization of the strategic business plan to meet any organizational and marketplace changes, as they occur.
Organizations that implement a successful S+OP process are able to reap many tangible business benefits, including improved on-time delivery to customers; reduced inventory levels; decreased manufacturing downtime; increased plant efficiency; enhanced teamwork; and more effective decision- making processes.
Ready to learn where and how to set up a S+OP process for your organization? Watch this complimentary, on-demand webinar that highlights the value-add to having a formal planning process for your organization. View this video and learn:
- Why planning for your organization is not dead a practice—a introduction to the Sales + Operation Planning process
- How to integrate a sales and planning process with your budgeting system—for "one source of truth"
- Practical ways to deal with the F-bomb (Forecasting)
- Tips for leveraging your ERP system to support S+OP
Hear first-hand how world-class organizations have overcome the planning challenges and improved their businesses’ bottom line.