Sales and operations planning

Ciarity of suppiy chain strategy and suppiy chain exceiience 

As companies have become more global and face rising complexity, volatility, and uncertainty, the importance of S OP has increased. In 2011, examples of this complexity included  

Why am I focused on the supply chain The answer is simple. It is a barometer of my business. All the problems show up first in the 

The term S OP is 30 years old. However, as supply chain processes have matured, this term has been redefined. Today, companies are at one of five stages of maturity. Each stage offers increasing opportunity and ROI. 

Each stage of S OP process maturity has a different process goal. More than 75 percent of companies lack goal clarity, which undermines S OP success. Frequently, cross-functional teams form with a different. 

In this chapter, we cover the characteristics, applications and benefits of S OP under the following headings  

The classical concept of S OP is rooted to the MRPII (manufacturing resource planning) process. In the basic S OP, the company operating plan (comprising 

The traditional S OP is an SMR process of establishing the operational plan and other key activities of the business to best satisfy the current levels of sales forecasts according to the delivery capacity of the business. 

Ling and Goddard (1988) sununarize a capsule description of the process  

Dick Ling, almost the founding father of S OP defines sales and operations planning as a process, rather than a system, says it is The process that enables a company to integrate its planning within the total company . The outcome of the process is the updated operation plan over 18 months or 2 years (the planning horizon ) with a firm commitment for at least 1 month. 

Based on Wallace (2004), Sales and Operations Planning (S OP) is a business process that helps companies keep demand and supply in balance. It does that by focusing on aggregate volumes (e.g., product families or product groups), so that, mix issues (individual products and customer orders) can be handled more readily. It occurs on a monthly cycle and displays information in both units and dollars, thus it integrates operational and financial planning. 

S OP links the company s strategic plans and business plan to its detailed processes - order entry, master scheduling, plant scheduling, and purchasing. S OP enables the company s managers to view the business holistically, and gives them a window into the future, to avoid lack of operational capacity to meet customer demand. 

S OP is an integral part of the Supply Chain Management. A given supply chain will not work well if its various members do not have good volume plans in the first place, and if they are slow to react to the inevitable changes in volume. In companies without S OP process, there is firequently a discoimection between the strategic plans and the detailed plans and schedules. In other words, the plans developed and authorized by senior management are not coimected to the plans and schedules that drive day-to-day activities on the plant floor. 

The firamework in Fig. 4.9 clearly shows the importance of the S OP process, as it links the strategic and business plans together with the detailed planning process at the shop floor level. 

Sales and Operations Planning is a monthly process that comprehends six steps, as illustrated and described in Fig. 4.10. 

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Genin P, Lamouri S, Thomas A (2005) Sales and Operations Planning Optimisation. In Dolgui A, Soldek J, Zaikin O (eds) Supply Chain Optimisation, pp 191-204... 

Supply Chain Tactical Planning Demand Forecast Category Management Sales and Operations Planning New Product Launch Category Management... 

In the evolution, the vertical silos of supply become connected through horizontal processes. The most common horizontal processes are revenue management, sales and operations planning (S OP), supplier development, and corporate social responsibility (CSR). (This transition is covered in great detail in Chapter 5.) These horizontal processes become connectors for the end-to-end value network. They align the traditional supply processes of source, make, and deliver against a business strategy. When companies successfully build market-driven value networks, demand and supply volatility can be traded off bidirectionally... 

What was the answer for Cisco The company built strong horizontal processes to coimect sales and operations planning (S OP) to contract manufacturing. Based on this process evolution, it was one of the first companies to sense the economic downturn of December 2008. It weathered the storm of the recession with no write-offs. 

As the great stumbled, the path forward was horizontal processes. The most common are revenue management, sales and operations planning, supplier development, and corporate social responsibility. These horizontal processes bridge the links of the supply chain to give it structure, purpose, and connectivity. 

The results are substantial. Companies reaching stage 2 of supply chain maturity in sales and operations planning are able to drive an average improvement of 2 percent increase in growth and a 3 to 7 percent improvement in asset utilization. Other benefits include reductions in inventory and improvements in new product launch success. S OP allows companies to make the right trade-offs in metrics based on the supply chain strategy. 

Sales and Operations Planning Practices and Challenges," Association for Operations Management and Institute of Business Forecasting, 2011 64. 

In this section, it will be performed a literature review for each one of the four categories of the Demand management - Statistical Forecast, Sales and Operations Planning (S OP), Collaborative Plaiming and Forecasting Replenishment (CPFR) and Vendor managed Inventory (VMI). This review allowed identify the DDSC characteristics for each category which was used to develop the five level maturity model. 

For people driven forecast, it is suggested to apply Sales and Operations Planning (S OP) and Collaborative Planning and Forecast Replenishment (CPFR), as they represent structured and formal processes to align demand figures across different functional areas and different organizations. 

Fig. 4.10 Author s monthly Sales and Operations Planning process 4.3.2.2 Detailed S OP Process...

Lapide L (2003) Organizing the forecasting department J Bus Forecast Methods Syst p 20-21 Lapide L (2004) Sales and operations planning part I the process. J Bus Forecasting Meth Syst 23(3) 17-19... 

Lapide L (2(X)5) Sales and operations planning part HI a diagnostic model. J Bus pOTecasting 24 13-16... 

Wallace TF (2004) Sales and operations planning the how to handbook, 2nd edn. T F Wallace, Cincinnati... 

For many companies, collaboration between the Sales/Marketing and the Operations/Manufacturing functions is problematic. Perhaps this is because the goals and measures of the two organizations are different. Operations seeks from Sales iron-clad forecasts around which to build production schedules. However, in many industries, accurate forecasts are hard to come by. That is, the forecast is either wrong or, in the rare incidents when it is correct, just plain lucky. This situation has led to calls for a Sales and Operations Planning, called S OP, for collaboration between the functions. Some add inventory to the S OP mix, making the acronym S IOP. 

Previous chapters touched on the role of information and associated processes and systems. Chapter 25 described supply chain technology applications. Chapter 23 described the work of the Supply-Chain Council and the Council of Supply Chain Management Professionals (formerly CLM) in promoting supply chain process integration. Within the company. Section 16.3.3 described the S OP (Sales and Operations Planning) process for intermediate-term information exchange between operations and marketing. 

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