Sales and operations planning is the cross-functional method of inspecting customer buying habits to ensure that a company can satisfy the anticipated distribution, production, and purchasing demand. S&OP is usually conducted by the management professionals of the executive level every month and enables them to match their plans with the goals and objectives of the entire company. One of the problems faced by retail organizations is the mismatch between the sales and operations departments. The issue can be fixed through sales and operations planning which focuses on developing relationships between company departments.
Suppose the sales and operations planning of a business is not linked correctly. In that case, there are risks of inaccurate forecasting, stocked products no longer needed, lost sales, and other problems. This gap in planning processes has caused problems that need to be solved by advanced S&OP software. A cloud-based, agile solution can help.
What is Sales and Operations Planning?
Sales and operations planning is a business management method where the executive and leadership teams come together to ensure that every business operation is aligned to balance demand and supply. S&OP needs collaboration from all the departments to produce detailed forecasts to estimate sales.
What is the Role of Sales and Operations Planning?
The main objective of connected S&OP is to enhance visibility, align supply and demand and achieve profitability. But this kind of planning can be achieved only when it is backed up by S&OP software which provides clear visibility throughout the process, monitors massive datasets, and boosts collaboration among the departments. Sales and operations planning is a complex process and requires a tool that can tackle significant volumes of data and incorporate the amount of detail required. The software should also be agile to be able to adapt to change. Other crucial objectives of S&OP software include:-
- Enhanced Visibility and Collaboration Between Departments
As S&OP is a collaborative effort by the managers, the leaders of every team come up with common and comprehensive goals and consider every department’s ability. It enhances accountability between different operations, promotes visibility and transparency, and improves communication.
- Improved Inventory Planning
The demand plan and forecasts estimate the sales, giving you an idea about how much inventory is required at a particular time. Overstocking or understocking that results from poorly planned inventory can affect the productivity and outcome of the sales and distribution operations. Thus, a detailed S&OP can assist in preventing such problems and helps in improved inventory planning.
- Better Customer Experience
Improving the customer experience is one of the biggest benefits of sales and operations planning. The entire supply chain machinery is for better profitability and customer experience. Organizing processes in the operations included inventory to sales, marketing, and distribution, ensuring that the customer is satisfied in the best possible way at minimum expense to the company. There would be no more chaos in fulfilling orders for products that are not stocked to the optimal level. Also, impatient decisions without proper thought and insight can be avoided, ultimately affecting the output.
- Informed Decision Making
Businesses can accurately view the quantity in the inventory being produced or in transit at a given time. With this information, planners can make quick and informed decisions and make instant alterations along the supply chain to satisfy any fluctuations in demand. You can also make informed decisions about what steps to take against supply constraints.
Without this, you would risk miscommunication across the departments. It might also lead to incorrect predictions of customer demand and overstocking, which locks up excess resources in slow-moving inventory. This increases inventory wastage as many products have a low shelf-life and become obsolete. You might also lose sales by not having the right amount of stock in the correct location. In contrast, a transparent view of the real demand and supply chain gives you the power, and you can have the latest information across the whole process so that modifications can be made when deemed necessary.
How to Ensure a Successful Integration?
When choosing the S&OP software, you should evaluate the options available for obtaining a solution that is the best for you. The business authorities generate a process and culture that produces a transparent and concise plan.
- Involve Executives– Engage all the teams, including HR, finance, marketing, operations, materials, product management, sales, and so on. Executives can be taught about the benefits of connected S&OP as well.
- Boost Cross-Functional Collaboration – Planners must function based on a common dataset but have an accurate view of data for fulfilling their specified role. Plans should be integrated so that alterations in one part influence exceptions in another, which need attention and boost collaboration.
- Choose the Right S&OP Software– It is essential that the S&OP software is explicitly framed for planning, is agile, and handles the complex operations in the S&OP process.
- Devise a Technology Roadmap– Develop a roadmap that aligns with your S&OP journey and includes goals and objectives for both the present and the future.
- Execute– It cannot be used if the strategy does not translate into how to sell or produce an item. You must set a clear plan for transforming sales and operations planning into a more efficient process. You should have the business needs in mind and plan how to choose a software vendor and produce a plan to implement the solution.
About the Company
Fountain9 is a reliable company that offers robust and efficient S&OP software that assists D2C brands and retail businesses eliminate food waste as much as possible and maximize revenue and profits. It also assists businesses in maintaining better availability by stocking each product to the optimal level by anticipating future inventory needs accurately. The software considers 9 unique factors, both internal and external, to predict the demand accurately and satisfy consumers.