Sales & Operational Planning
Sales & Operational Planning (in sort S&OP) stands for business process of integrating all the planning entities of an enterprise, an evolved version of it is also termed by industry experts as Integrated Business Planning (IBP) process. IBP process compromises of complete planning cycle in following order, Sales Revenue Planning, Demand Planning, Supply Planning, Profit based Supply/Demand balancing, Management Review. S&OP focuses on balancing of demand & supply with the financial plan supporting it and is a monthly reviewing process. Stakeholders in this process review the data at aggregated level in quantity as well as in amount and it facilitate the in putting the strategic decision plans to execution.
S&OP process involves and/or interacts with following processes:
- Sales Planning
o New Product Planning
o Revenue, Margin & Profitability planning
o Enterprise Goals
- Demand Planning
o Sensing Demand
o Forecasting Demand
o Demand Collaboration(sales, marketing and operations)
o Shaping Demand(events, promotions, causal factors etc)
o Consensus Forecasting
- Supply Planning
o Capacity Planning(supplier, resource)
o Inventory Planning(Safety stocks, postponements)
o Material Planning
- Demand/Supply Balancing
o What if Analysis - simulations
o Collaboration(internal as well as external)
o Constraint based planning
- Review
o Key Performance Indicators(KPI) measurements
o Plan vs Actual
o Margins
o Inventory Turn
o Forecast Accuracy
o Exceptions & Alerts
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