Considered a key element to increase competitive advantage in the market, S&OP is a plan used to improve the overall performance of the company. In this sense, it is designed in a way that allows value management, aiming at good results.
In addition, sales and operations planning offers management a competitive and sustainable management. Want to know more about this? Keep up with the article that Polyexcel has prepared for you!
S&OP concept
S&OP is an integrated system that manages the logistics and business sectors. Its evolution occurred from the moment that industries began to unite administrative areas to the production of goods.
In large industries, for example, it is necessary to plan the volume of a product, since it is shared in different areas, such as marketing, commercial and development. However, not all systems are integrated with each other. To solve this, the S&OP came up.
With it, the company’s management enjoys a more sustainable organization, coordinating the main resources of the operation. This way, it can optimize production and planning in the final delivery of products.
For some years, the s&op sales and operations planning were not integrated, causing noise during the month’s deliveries. Thinking of minimizing this setback, the teams began to organize their demands together, with monthly cycles.
S&OP benefits
Once you’ve found out what is s&op, the next step is to consider all the benefits it can add to the company. Among them is the ability to prevent problems, which can disrupt the flow between production, sales and finance.
The continuous evaluation process also provides positive changes to the business. After all, it drives the team to solve unforeseen events with agility and promotes teamwork through assertive decisions.
Another positive aspect of the S&OP is its significant power in increasing the level of customer service and inventory turnover. With it, it is possible to reduce expenses on unnecessary purchases and avoid losses due to problems of mismanagement in the validity of goods.
S&OP steps
Implementing the s&op meaning requires regular meetings between the areas of the company, with marketing and sales being responsible for presenting projections of demands. Check out the five steps of this process below:
Data refresh
The sales team makes a statistical long-term sales forecast based on spreadsheets and company reports. The update is made with the help of data related to the previous months, referring to inventory, purchasing volume and financial.
With this information, it is easier to come up with a prediction about future sales, solidifying the idea. After the completion of this stage, the executive team receives the research and begins the next phase of the sales and operations planning process.
Demand planning
In demand planning, a consumption-related plan is created. Its main objective is to consider the diversity of qualitative and quantitative information, as well as market references.
Production and supply planning
This phase takes into account all the inputs needed for production. But it does not stop there, since a reserve plan is also drawn up to ensure the operation of demand planning.
For this, the ideal is to evaluate the desired stock level and monitor the turnover indicators, thus avoiding products close to validity or expired. Another point to be thought of is the capacity of suppliers, resources and materials.
Prior meeting
An assessment is made in the previous meeting to find out if demand planning is compatible with supplies. Its objective is to find possible divergences and delimit the financial impact between them.
This process is important for those involved to visualize the situation more clearly, planning ways to improve results. When there is no consensus on what decision will be made, suggestions are forwarded to the final meeting.
Final meeting
Also called the Sales and Operations Planning executive meeting, this step analyzes the alternatives proposed in past processes. From this, the team makes a consensual decision, aiming at the best for the company.
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