Why is Sales and Operations Planning Important?
If Sales and Operations Planning (S&OP) activities are not aligned and integrated, small problems quickly escalate into major challenges, which adversely impact corporate performance. As each part of an organization jockey’s to satisfy it’s own priorities, valuable time and resources are wasted, ultimately leading to poor customer service.
The consequences of poor sales & operations planning are substantial: excess inventory, short orders, overtime, inter-plant transfers, expediting, reduced order fulfillment, poor resource utilization. These issues impact the bottom-line, while fostering a reactive culture of undisciplined business processes.
Creating the proper alignment and balance between demand and supply is not easy. It requires a clear, focused process, based on industry best practices, that manages sales/marketing and operational issues in a thorough and efficient manner. Bringing together sales/marketing, operations, finance, and product management to facilitate joint objectives of the overall enterprise is what makes effective S&OP work.
This is why S&OP has become more important than ever!
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