Sales & Operations Planning Definition
Sales & Operations Planning (S&OP) is a process used by businesses to create a coordinated plan that takes into account both sales and operations. The goal of S&OP is to align these two areas of the business in order to achieve the company’s overall objectives.
The S&OP process begins with a sales forecast, which is then used to develop an production plan. The production plan takes into account factors such as capacity, inventory, and raw materials. Once the production plan is complete, it is then compared to the sales forecast to ensure that there is alignment between the two areas. If there are any discrepancies, they must be resolved before the final S&OP plan can be created.
The S&OP plan includes both short-term and long-term plans for sales and operations. It is important to have both short-term and long-term plans in place in order to make sure that the business is able to meet its goals. The short-term plan should be updated on a monthly basis, while the long-term plan should be updated on a yearly basis.
Once the S&OP plan is created, it is important to monitor it on an ongoing basis and make adjustments as needed. This will help ensure that the business remains on track and meets its objectives.