Perspectives on Sales & Operations Planning

Why has Sales and Operations Planning moved to the forefront?

Over the past six months, Sales and Operations Planning (S&OP) has moved to the forefront of corporate agendas.  Why has S&OP – a long established business process for integrating supply with demand to improve decision-making – risen in prominence?  The answer is that multiple forces have converged to not only raise the need for improved integrated supply-demand planning to the top of the agenda, but also to make it truly possible:

1. For the first time in the history of S&OP – thanks to cloud computing and other technologies – it is possible for companies to implement and adopt this mission-critical process in a timely manner.   The evolution of ERP, CRM and SCM solutions coupled with improved data stores, data integration tools and user sophistication has further driven this growth.

2. The cloud computing approach and the advent of highly specialised S&OP applications means that business users no longer need to rely on weighty IT support to drive their S&OP process.  In the past, business users were dependent on internal IT organizations with long lists of competing priorities, disparate platform standards,  long capiital budgeting cycles, and limited bandwidth to support such initiatives.  Today, thanks to cloud computing and improved integration tools, it is possible to implement an S&OP system in the time it used to take just to order the hardware – as little as 10 to 12 weeks.

3. Oversupply and unpredictable demand in today’s economy coupled with staff shortages are making it more imperative than ever to improve, reduce the latency, and automate the process.  If in past years the focus was on supply deliver, today the focus is on tightly matching supply against demand.

4. The high cost and limited availability of credit have put new pressures on working capital and therefore inventory management.  The need for more effective inventory management coupled with volatilty in demand make S&OP an essential process for corporate success.

And so, the list of reasons why S&OP has become so hot grows daily.  What other items would  you add?

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