Sales Operations Planning

Value creation across the planning horizon

Sales operations planning is behind the acronym S&OP that is one of the most important and sometimes least structured processes in manufacturing companies. Sales Operation Planning, i.e., the planning of sales and operations at a managerial level, is crucial to aligning business objectives.

Our solutions for Supply Chain Planning

Demand Management

Demand Sensing

Inventory Management

Resource & Supply Planning

Order Promising

Smart Supplier Collaboration

Distribution Requirements Planning (DRP)

Demand Driven Material Requirements Planning (DDMRP)

Financial Throughput & Operations Planning

What is S&OP?

Sales operations planning (S&OP) is a supply chain planning process designed to help business leaders make decisions on a wide range of topics. The S&OP process flow provides a structured approach to balancing demand and supply effectively.

Sales and operations planning is a process for better matching a manufacturer’s supply with demand by having the sales department collaborate with operations to create a single production plan. This approach is central to S&OP planning, ensuring that all business functions work cohesively.

The objective of an S&OP model is to balance market demand with the company’s supply capacity. It encompasses various S&OP process steps that align operations and strategy.

S&OP processes are, by their nature, linked closely to business and company policies. As a result, each company follows a different model and methodologies to address this issue, one of which is sales planning.

What is the meaning of S&OP?

The acronym S&OP stands for Sales and Operations Planning. It’s a strategic process that ensures alignment across sales, operations, and other business functions. Understanding S&OP meaning helps organizations focus on delivering value through coordinated plans and decisions.

Is S&OP a strategic planning 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. It is closely tied to the company’s operational plans definition, ensuring that high-level objectives translate into actionable steps.

The S&OP process includes an updated forecast that leads to:

Sales plan
Production plan
Inventory plan
Customer lead time (backlog) plan
New product development plan
Strategic initiative plan
Resulting financial plan

Plan frequency and planning horizon depend on the specifics of the context. Short product life cycles and high demand volatility require a tighter S&OP process flow than steadily consumed products. Done well, the S&OP process steps also enable effective supply chain management.

What is the process flow for Sales Operations Planning?

S&OP process flow consists of several steps, usually carried out in monthly meetings. The names and numbers of the steps in each company’s planning process vary, but all have the following in common, in order:

Demand planning: Processes for analyzing, forecasting, and influencing demand, including demand sensing.
Procurement planning: Identifying and consolidating requirements and determining the timeframes for their procurement with the aim of having them as and when required.
Production planning: Assessing production and distribution capacity and constraints. This involves forecasting, managing the supply chain, tracking inventory, and scheduling jobs.
Distribution planning: Determining the right amount of manufactured goods to be shipped to each distribution center or warehouse to satisfy customer demand.
Financial planning: Taking a comprehensive look at your financial situation and building a specific financial plan to reach your goals.

S&OP planning is closely related to, and often a component of, integrated business planning, a more comprehensive and long-term planning process that collects the plans of every department and ties them to the company’s financial performance and strategy.

S&OP software

While S&OP is first and foremost a process, not a technology, several types of software often play important roles in automating the process and facilitating collaboration among sales, finance and operations, making relevant data more accessible and providing analytics and simulation of what-if scenarios.

Through the sedApta Suite, we are able to offer companies an integrated ecosystem based on a new methodology and implementation approach. In addition, thanks to the modularity of the Suite components, companies will be able to support and coordinate function and process interoperability and orchestrate complex business flows and multi-role situations in a multi-product space.