Sales & Operations Planning: Building the Foundation

SAleS & OPerAtiOnS PlAnning: Building tHe FOundAtiOn By Alan l. Milliken To run the S&OP process efficiently and effectively, you need the support of the top management, without which nothing will work … schedule S&OPmeetings at least 12 months into the future so that team members can plan ahead … the best way to start an S&OP process is to start with a pilot program with one or two product groups. S S ales & Operations Planning (S&OP) is the process by which we bring together all the plans for the business (Customers, Sales, Marketing, Development, Manufacturing, Sourcing, and Financial) into one integrated set of tactical plans. The S&OP process provides management the ability to direct its business to achieve a sustainable competitive advantage. The overall objective of S&OP is to arrive at a business “Game Plan” to help manage and allocate critical resources to meet the needs of a customer at the least cost. Figure 1 shows the five steps in the S&OP process. Implementation of the S&OP process is a journey that should be undertaken in phases. The first phase involves getting the basics in place. (See Figure 2) Failure to properly build the S&OP foundation will impede ...