Why do you need an integrated sales and operations planning process?

S&OP is a management tool originating in the USA that cooperatively brings together the key areas of a company to establish a shared basis for decision-making. The goal is to optimally align production and procurement planning with corporate and sales planning, which particularly includes comprehensive financial planning. Performance deficits of the supply chain which result from less accurate, outdated and frequently changing sales, production and procurement plans cannot even arise in the first place thanks to the use of S&OP. In this way, challenges like hard to forecast sales volumes, high price volatilities on the sales and purchase side, resource bottlenecks and high shares of fixed costs can be tackled in a better manner.

How do you benefit from implementation/optimization of S&OP processes?

• Higher customer satisfaction and more security: Enhanced supply reliability and on-time delivery, combined with short throughput times for made-to-order productions, lead to substantially improved customer satisfaction

• Increase in sales: Satisfied customers buy more, and they buy more often and recommend you to others, which can boost sales and revenues

• Upturn in profit: Integrated planning processes lead to lower inventories, fewer errors and to less uncertainty in planning. Overall, the production processes flow in a considerably smoother way. Rescheduling on short notice becomes less frequent. All these effects have a positive influence on many expense items of the P&L statement. Altogether, costs can thus be reduced tremendously.

How do we go about implementing your S&OP process?

S&OP is implemented in three steps: 

1. Analysis of potential: In step one, the current business practice in the area of sales and production planning is recorded and evaluated based on interviews and workshops, data analyses and existing descriptions of processes and procedures. In this connection, quantitative aspects play a role, like forecasting quality and instability in planning as well as qualitative aspects like the degree of the departments’ cooperation in the planning process.
2. Definition and coordination of binding processes: In step two, the future S&OP processes are then defined together with all relevant specialist departments. In doing so, we draw on best practices for processes and procedures, roles, meeting structures and key performance indicator systems. Future processes are defined in detail in a comparison with best practice, together with the relevant organizational anchoring and relevant IT support for each process step. The key milestone at the end of this step is the binding coordination of the new processes.
3. Implementation of the new processes and follow-up support: the main challenge in the implementation phase is to shape the change in a sustainable way and to convince all staff involved of the need for the new processes. We support this with comprehensive training programs, accompanied test runs, coaching of the go live and through an accompanying monitoring of implementation.