SALES AND OPERATION PLANNING

 SALES AND OPERATION PLANNING

Sales and operations planning (SOP) is a monthly integrated business management process that empowers leadership to focus on key supply chain drivers, including sales, marketing, demand management, production, inventory management, and a new product introduction. The SOP is the forum in which the production plan is developed

 

Six steps of sales and operation planning:

●     Product review (in this phase of the SOP process, planners involved in R&D, product development, and a new product introduction analyze the health of products in the market, examine product pipeline, and arrive at decisions about product planning)

●     Demand review (the goal of this phase is an unconstrained forecast or consensus demand planning, incorporating a holistic picture of independent and dependent demand)

●     Supply review (The goal of this phase is a supply plan that syncs with the consensus demand plan.The supply plan should balance customer service and minimize inventory as well as operating costs)

●     Finance review

●     Pre SOP (Pre-SOP is a series of meetings conducted with leaders at various levels that showcase the connectivity of plans across product, demand, supply, and finance)

●     Executive SOP (The final phase of SOP brings all plans and data together in a unified, cloud-based platform to be used in executive SOP meetings)

 

SOP also has several benefits such as provides a means of updating the strategic business plan as conditions change, provide a means of managing change and provides a realistic plan that can achieve the company objectives.