S&OP process aims to maximize the ability of the company to verify, at least each month and in a formal way, the Business Plans progress with a deep integration of at least three functional plans: the sales plan, the production plan, the financial plan.
The final goal is to master, at top management level, a solid decision-making process in order to lead the company to the achievement of its strategic goals, and to serve as an input to the functional programs (sales / operations / finance, etc.) and so on.
The key point of the program is the top management commitment to pursue with tenacity and perseverance a method used successfully, since ‘80s, in well recognized leading companies.
MAIN STEPS TO IMPLEMENT S&OP
S&OP is a five-step monthly process which needs to be executed regularly, by product family.
After that, for each product family, you need to set a monthly sales plan with a horizon of at least twelve months.
Consequently, the production plan will be updated, with the scope to balance demand and supply ensuring availability of resources to meet demand requirements.
This will also be linked to the financial requirements needed to support the targeted level of inventory or backlog.
We have successfully implemented various S&OP processes.
- More reliable business plans
- More effective decision making process
- Better resource utilization and communication
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