Sales and operations planning

Sales and operations planning (S&OP) is an integrated business management process through which the executive/leadership team continually achieves focus, alignment, and synchronization among all organization functions.

The first scope is the horizontal alignment in order to balance the supply and demand through integration between the company departments and with suppliers and customers.

[2] A properly implemented S&OP process routinely reviews customer demand and supply resources and "re-plans" quantitatively across an agreed 'rolling' horizon.

One of its primary purposes is to establish production rates that will achieve management’s objective of maintaining, raising, or lowering inventories or backlogs, while usually attempting to keep the workforce relatively stable.

As this plan affects many company functions, it is normally prepared with information from marketing, manufacturing, engineering, finance, materials, etc.

[2][11] It is important to note, that while S&OP is typically viewed as a balancing of supply and demand of "goods," these principles can also be applied to businesses dealing exclusively with services.

The five dimensions are related to: meetings and collaboration, organization, measurement, information technology and S&OP plan integration.

The main enablers are the following: the capacity to learn from previous mistakes, the ability to make changes, the discipline, the existence of an S&OP department, the top management support, the cross-functional integration, the performance evaluation, the information system, the training on S&OP, the commitment of participants, well assigned roles and responsibilities, impartiality in the conducting of the process.The main barriers indicated are: the presence of siloed culture, inadequate information technology, lack of participation or irregular attendance at meetings, difficulty to reach a joint decision during the meetings.