Have you ever thought about how to improve your Sales and Operations Planning (S&OP) process beyond where you might be today? There's certainly no lack of advice on the topic of S&OP on the Internet. Some articles focus on the overall process while others focus on S&OP software and related support tools. In my experience, effective sales and operations planning is a combination of both process and technology – with a concentration on collaboration, stakeholder buy-in, executive support and the adoption of analytics.
I like the Wikipedia definition of Sales and Operations Planning:
S&OP as an integrated business management process through which the executive/leadership team continually achieves focus, alignment and synchronization among all functions of the organization.
I would also add that interaction between the S&OP business management process and related technology tools should enhance synchronization and improve supply chain functions such as statistical forecasting, consensus demand planning, supply and manufacturing planning and executive S&OP reviews. The adoption of analytics in support of these supply chain functions can provide advanced capability into exposing disconnects and identifying optimized S&OP solutions.
The integration of analytics in support of the S&OP process can be adopted systematically over time based on an organizations existing analytical and S&OP maturity. Determining the value of analytics can certainly support improvements. Consider enhancing the sales and operations planning process with analytics by first evaluating the demand forecast. Since it is such an important part of any S&OP process, even small improvements in forecast accuracy can have positive results throughout an organization. Over time, an organization can evolve to leverage additional analytics capability to improve the S&OP business management process. Some areas to consider as part of a more analytics driven S&OP process include:
- Utilizing big data.
- Statistical forecasting.
- Demand sensing capability.
- Demand shaping capability.
- Demand and supply what-if capability.
- Data mining and segmentation.
- Inventory and network optimization analysis.
Sales and operations planning continues to be an important process that organizations are using to better align resources and improve supply chain performance. Analytics can provide additional benefit beyond traditional S&OP methodologies by giving even greater insight into data driven decisions. With analytics S&OP can become a more robust, real time process leading to improved customer service levels and profitability.
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