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"What is S&OP and Why Should You Care?"

WHAT IS S&OP?
S&OP stands for Sales and Operations Planning.

It is one of the most critical business processes used to achieve best in class performance to consistently outperform competitors.

In simple terms, a properly implemented S&OP process routinely reviews customer demand and supply resources then balances them by re-planning quantitatively across an agreed rolling horizon. Both short and long term horizons are considered along with volume and mix. At this level, the process includes Master Scheduling, Plant and Supplier Scheduling, Outsourcing, Distribution and other detailed planning/coordination.  The process repeats on a monthly rhythm or cadence.
                                                         

Executive Sales and Operations Planning (ES&OP) is top management’s part of the overall S&OP process. It is a tool through which the executive/leadership team continually achieves focus, alignment and synchronization among all functions of the organization.  

   

Key outcomes of the process are:

  • higher customer service
  •  lower finished goods inventories
  • more stable production rates
  • shorter customer lead times for make-to-order products                    


Improving the S&OP Process is a SCOR (Supply Chain Operations Reference) Model best practice (BP.026)  -

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