Three Ways Sales and Operations Planning Can Revolutionize Your Business

Once collaboration between the top levels of the functional areas is developed, it can be translated into detailed plans that are in line with top-level agreements. This results in a set of common goals, improved communication, and a transparent decision-making process.

To deal with the disruptions that arise during a pandemic, all stakeholders need to be involved in the S&OP process and work together towards a common goal. With increased transparency between functions and accurate forecasting, it can improve analysis and decision-making to achieve business, strategic, and financial goals.

In the absence of S&OP, there will be the risk of misalignment across functions which may result in wrong demand forecasted, excess inventory, wasted resources, and financial losses. During the pandemic that we are living through now, it is even more crucial than ever before to leverage and adapt the S&OP process to navigate the uncertainty of consumer demand, supply constraint, and cost increased.

If there is one thing we learned in the past two years, it is that we can hardly predict the future. The pandemic has affected the global economy and financial markets. Significant incomes reduction leads to lower demand, rise in unemployment, increased prices, supply constraint, as well as disruptions in transportation, services, and manufacturing are among the consequences of the disease mitigation measures. 

Through S&OP, businesses can incorporate global data as well as information from different stakeholders to the forecast, make assumptions, predictive analytics, identify risks and opportunities. Business needs to be agile to quickly adapt to the constant change in the market environment. If the decisions and actions taken did not give the desired outcome, the business can swiftly make the necessary changes. One key outcome of a well-run S&OP is increased supply chain efficiencies and reduced costs.

A key characteristic of S&OP is having one set of numbers across the business. It creates a centralized, dynamic, and integrated business management process. To get to one number requires transparency, trust, and open communication from everyone involved. Having the right people with the right capabilities in the meeting, who are empowered to make decisions and conduct those crucial conversations will also determine the success or failure of S&OP.

With one set of numbers, it allows companies to identify disruptions across the supply chain as well as synchronize supply and demand. This is easier to achieve during the normal conditions and more challenging during situations with a high degree of uncertainty. Amid crisis, it is vital to have one set of numbers that are truthful and reliable upon which management can base action and decision.

S&OP creates the outlook visibility and transparency for business leaders to quickly pivot and solve urgent issues while putting more attention on the required tactical decisions.