Why do we need S&OP?

Sales and operations planning (S&OP) is crucial to your organisation’s success in the 21st century.

The modern marketplace is more fragmented than ever. The rise of globalisation, the Eurozone, emerging economies and online commerce has dramatically expanded the commercial arena. Goods producers are scrambling to adapt.

In reaction, organisations have diversified – operational roles are becoming more complex and often located in far-flung locations. Departments of the same company are often disconnected. Everyone’s working hard towards different ends. But they all need to work together. That’s where S&OP comes in.

What’s S&OP?
It’s a powerful management strategy that gets everyone in your organisation moving in the same direction.

The old way of doing things:
Business planning, sales planning and production planning were done separately. There were multiple sets of numbers, units and currencies. Sales and marketing worked in isolation until there’s a customer service crisis. Finance acted as an intermediary in internal disputes.
The result? Slow and cumbersome operation. Inefficient communication. Disparate data sets. Fuzzy sales forecasts leading to overstocked supplies and falling profits.

The new, better way:
All the arms of your organisation are integrated, from product raw materials and manufacturing capacity to production, distribution, finance, marketing and sales. Departments plan together, agree to the same set of numbers and work towards the same goals.
This is because it’s hard to manage S&OP in the classical way when working with distributors in emerging markets. There are countless roadblocks to success: misunderstandings of S&OP methods, mistrust, differences of cultures and interests, unclear goals and sporadic review processes for all parties, to name a few.

S&OP is a process that lets your business align production with demand by merging the tactical planning of every part of your business. Businesses that adopt S&OP continually outperform those using traditional business management strategies.

Implemented in stages, S&OP involves the transformation of your entire organisation. It leads to breakthrough improvements in communication, efficiency, inventory and sales turnover.

How does S&OP achieve this? By focusing on the drivers of operational success – demand and supply. Through integrated planning, S&OP can balance demand and supply in a way that maximises efficiency and profit performance. It also uses clear, synchronised data to forecast future sales, mitigate risk, and plan for unexpected events. S&OP is the perfect solution to thriving in the modern, ever-shifting commercial environment.

With over 20 years’ experience developing distributor integration solutions, Internel are the team of S&OP experts you need on your side. We’ll help you make accurate forecasts, balance your supply chain, and seize opportunities in emerging markets. Act now and contact us to steer your business in the right direction.