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Integrated business management process
Sales and operations planning (S&OP) is an integrated business management process through which the executive/leadership team continually achieves focus, alignment, and synchronization among all organization functions. The S&OP process includes an updated forecast that leads to a sales plan, production plan, inventory plan, customer lead time (backlog) plan, new product development plan, strategic initiative plan, and resulting financial plan. Plan frequency and planning horizon depend on the specifics of the context.[1] Short product life cycles and high demand volatility require a tighter S&OP than steadily consumed products. Done well, the S&OP process also enables effective supply chain management.
Integration between the departments, with suppliers and customers
The Sales and Operations planning process has a twofold scope. The first scope is the horizontal alignment to balance the supply and demand through integration between the company departments and with suppliers and customers. The second aim is the vertical alignment amid strategic plan and the operational plan of a company.[2]
A properly implemented S&OP process routinely reviews customer demand and supply resources and "re-plans" quantitatively across an agreed 'rolling' horizon. The re-planning process focuses on changes from the previously agreed sales and operations plan; while it helps the management team to understand how the company achieved its current level of performance, its focus is on future actions and anticipated results.
^Kristensen, Jesper; Jonsson, Patrik (2018-02-22). "Context-based sales and operations planning (S&OP) research: A literature review and future agenda". International Journal of Physical Distribution & Logistics Management. 48 (1): 19–46. doi:10.1108/IJPDLM-11-2017-0352. ISSN 0960-0035.
^Tavares Thomé, Antônio Márcio; Scavarda, Luiz Felipe; Fernandez, Nicole Suclla; Scavarda, Annibal José (July 2012). "Sales and operations planning: A research synthesis". International Journal of Production Economics. 138 (1): 1–13. doi:10.1016/j.ijpe.2011.11.027.
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