Sales and operations planning (S&OP), also referred to as aggregate planning, is a business process empowering the executive level management to meet and review supply chain drivers, marketing, demand, sales, production, and introduction of new products. S&OP’s goal is to equip executives with critical data and information to help them make better-informed decisions for the business.
S&OP helps solve everyday problems within a business. Some people have no clear idea of how it works in favor of an organization. When you implement S&OP, it works in real-time to connect supply chain planning and eliminate deficiencies in your operations. The following are some of the impacts it will have on your business if you decide to introduce it:
Improved Customer Service
S&OP provides solutions to help benefit both suppliers and customers. It makes it easier to meet deadlines and avail products where and when they are needed. When operations in a company go smoothly, customers will have a more effortless and satisfying time.
Linking your sales and operations allows the management to work out issues and respond quickly. Successfully hastening your operations and services is a sure way to improve the customer experience.
Better Budgeting and Sales Forecasting
A business with the potential to thrive requires the right business tools to grow in a competitive market. Without an effective and flexible S&OP, you will risk missing out on what most of your competitors and big brands in your industry are enjoying.
Whichever industry you are in, there is always a competitor waiting to snatch your dissatisfied customers. Therefore, your business must meet all customer requirements. S&OP allows realistic forecasting, which allows you to come up with budgets to serve you in the future. You will also project when you are likely to make the most sales.
Good Inventory Management
When you can forecast the sales you are likely to make; it is easier for you to find out how much inventory is required at a particular time. A good S&OP should not confuse users through errors and poor management of inventory. These are a result of overstock or stockout.
Increased Transparency Between Departments
For processes in an organization to run smoothly, there needs to be cooperation between all the departments. Each team from every department should appreciate how others contribute to the end product. They should not undermine each other, hence effectiveness. An effective S&OP ensures your teams make informed decisions about every product’s supply and demand.
When every team knows what is expected of them, your stocks will rarely be too high or too low. S&OP allows employees to relay up-to-date information with one another, creating transparency and accuracy across your business.
Better-Informed Decision Making
One of the essential features of S&OP is getting access to large volumes of inventory, production, and other operations. This information makes it easy for you to make instant adjustments on time. You can easily make a change in the supply chain to meet a rising demand or find ways to deal with supplier constraints. Businesses without S&OP are at risk of misalignment in various departments. Business misalignments result in wasted resources, an inaccurate estimate of customer demand, or losing revenue from expired stock.
Sales and Operations Planning benefits are limitless, provided you get the right service provider for your business. Using an inappropriate provider may not provide you with adequate support to make decisions and connect your plans. Do your research to avoid making a wrong choice that could cause harm to your business.