Sales and Operations Planning
Sales and Operations Management focuses on coordinating communication through meetings involving top level marketing and operations management personnel. The purpose of these meetings is to develop, document and review specific objectives surrounding sales planning and production planning processes. The result will be improved control over variables that impact the production operations process. These variables include:
- Overall manufacturing capacity
- Specific labor requirements
- The development of a master production schedule
- Budget approval
- Allocation of funds across critical resources
- Acquisition of funds to support production resources
Establishing monthly sales and operations meetings focused on these variables will result in a continually improving process.
- sales and operations planning
- S&OP Process Steps
Sales and Operations Planning – S&OP
What is Sales and Operations Planning?
Sales and Operations Planning or S&OP is a strategic process of developing sales projections by individual product by customer from the sales team. The S&OP process balances the needs of the market place with the resources required to support the operational objectives of Customer Service expectations, planned Inventory Levels and financial projections.
The strategies developed during the S&OP process are used to determine the necessary production levels by product on the operations side. The sales projections drive everything from raw material purchases, to production line and people resource scheduling, to the needs within the warehousing and distribution arm of the company. The level of production agreed upon by sales and operations is the level of production used in the Master Production Schedule.
How does RAM Supply Chain help with S&OP?
RAM Supply Chain assists companies in developing a business process that ensures improved accuracy of Sales Forecasts and Operation Plans. Through successfully proven activities we assist our clients in implementing a proven methodology required to improve Customer Service Levels, while reducing operational expenses. These activities include, but are not limited to, the following steps:
First, we assist in developing of Standard Operating Procedures related to S&OP.
Second, we assist in the development of monthly Sales and Operations meetings;
third, we help to create the organizational structure required to support the Standard Operating Procedures; fourth, we assist in the development of forecasting techniques proven to increase accuracy of Product Sales projections.
How does RAM Supply Chain implement S&OP?
The final S&OP Process Step involves implementation. RAM Supply Chain can support you by providing Materials Management professionals who are seasoned in the practical application of improving manufacturing efficiencies. These individuals are available on a permanent, temporary or consulting basis.
Other Sales and Operations Planning Resources
Johnson & Johnson’s Cordis facility in San German Puerto Rico experienced an increase in sales from $500MM to $1B within 6 months with an improvement to customer service levels and no increase in support staff. Continue reading…