The process of reviewing demand and supply projections and their possible financial impacts is called sales and operations planning(S&OP). It is normally carried out by the top management team. S&OP is a strong decision making process that confirms that each tactical plan in every department aligns with the overall view of the organization’s business plan. The aim of S&OP is to come up with an operating plan that could determine how business resources are allocated.
Advantages of S&OP
A lot of good things happen to businesses that apply Sales and operations planning technique. In addition to boosting their demand and supply functions, they also manage their inventory, sales and marketing, budget forecasting and product lifecycle processes better. Besides, these businesses are able to review their tactical plans meant for different sections. These plans list the company’s objectives and expectations for the coming year.
Top-down planning is one of the commonly used tactics. It is an idiot-proof method that entails only one sales forecast that guides the planning process. This forecast is created from a range of products and services that use the same resources. Tactical plans are usually made according to the overall forecast, and resources are split across the finished product.
Bottom-up planning is the next S&OP technique and it is suitable for businesses that lack a steady manufacturing schedule and their finished goods can change each month in terms of quantity and type. As a result, a single sales forecast used in the top-down approach is not necessary here. Instead, managers should compute the resources needed to produce each product and merge these resources to know the overall outcome of their resource planning.
Productions plans and S&OP
After doing intelligent resource planning, the next thing a company wants to create is separate production plans. One of these is a level production plan. It is used when the cost of altering anything in the production level is too costly and the cost of holding stock is extremely small. Another kind is the chase production plan. In this one, production is ever going after the demand and its best used by businesses that cannot hold inventory without incurring huge costs. Finally, companies may make a mixed production plan. This has the characteristics of both level and chase production plans, meaning that the production and inventory levels would vary.
When this process is described, it is easy to think that one can do it manually without encountering a problem. While it’s possible, the process can be time-consuming and less accurate. Demand and supply planning should be accurate as it affects other areas of your business. This is where Anaplan’s sales and operations planning come in. It entails use of software that could easily be merged with your other applications. Furthermore, this special software can eliminate time wastage and human errors. With Anaplan’s app, all executives can communicate via a more shared system and simplify their decision making work. Second, the application releases full P&L modeling on several supply chain networks, and enables managers to see and manage supply chain costs in real time.
The interactive supply-demand app promotes production innovation by letting the managers manage and review launch scenarios and profitability. The idiotproof user interfaces plus the intelligent ways through which Anaplan’s app manages the S&OP could amaze you. It is the best tool for improving performance management too, and you should learn more about it online. Make sure you visit anaplan.com for extra information about this tool. If you raise any question, feel free to call customer care service immediately. A polite and competent agent will respond to you with accurate and useful answers. Once you adopt this S&OP solution, you will always do accurate demand and supply planning.