EDA UZUN

N01350568
SALES AND OPERATIONS PLANNING
Sales and Operations Planning emerged as a new and promising business concept. According to
research analysis, three primary components of sales & operations planning are people, process, and
technology. The benefits of effective S&OP are compelling - lower operating costs, reduced inventory
requirements, and top-line growth, and top-performing S&OP companies are realizing these benefits
and in the process gaining competitive advantage.

The appeal of S&OP lies in its ability to drive dramatic improvements in key business performance
metrics. The research indicates that effective use of S&OP can help grow the top line of the business
while reducing operating costs and reducing inventory required. S&OP can create impact on business
performance through collaborative planning and decision-making. Effective decision-making is a
balancing act between the different dimensions of S&OP. Maximising the effectiveness and the impact
requires a customised approach with the right focus on business targets and objectives, right process
design based on market and business characteristics, right people involved to ensure the desired
behavior and right system and data to support an efficient and fact-based process. The result can be
a significant business impact on-time delivery to customers (+), inventory levels (-), manufacturing
downtime (-), plant efficiency (+) and transportation cost (-). An imbalance can cause undesired
behaviours and lead to either no decisions or the wrong decisions, thus reducing the chances of
realising the potential. Moreover, S&OP is a strong tool to support the strategy journey through a
continuous strategic dialogue.

In general, sales and operations planning; a well-documented and mature process, is a vital tool to
increase communication, improve service levels, decrease costs, and better plan capacity in all parts
of a supply chain. Achieving S&OP top performer capabilities and performance requires a focused
effort, dedicated, knowledgeable resources, and at least six months. Such a project is typically
comprised of three phases: Preparation, S&OP Pilot Cycles, and Continuous Improvement. Today’s
competitive global markets require a renewed focus on effective supply-chain management—and the
underlying S&OP process. Shorter product life cycles, volatile demand, and global supply chains make
planning even more difficult. But with the right structure in place, more and better information, the
use of segmentation to drive more-accurate demand forecasts, and effective leadership, companies
can build a robust S&OP process—and a sustainable competitive advantage.