Sales and Operations Planning - S&OP Best Practices

S&OP Best Practices

S&OP best practices share a common set of approaches:

• Rely on a phased approach : S&OP is much more an integrated set of business processes and technologies than a single, all-encompassing process or technology. If you just focus on the implementation of a new technology and think that S&OP will miraculously take shape, you’re wrong.

• Develop an “outside-in” sequence of S&OP initiatives : typically, the events that will have the most profound and negative impact on your sales and operations planning are those outside of your control. For the most part, these are due to the decisions and actions of your customers, partners, and competitors, which have a direct impact on your revenue and your competitor’s strategy.

• Focus on more information, less data : another key to successful S&OP is clean, current, and accurate data. Plans are often slowed down by the effort of gathering data that has minimal importance to the overall project. It is important to ensure that you know exactly what business problem you are trying to resolve and understand the minimum data necessary for the project.

• Provide effective leadership for the process. S&OP crosses organizational boundaries - that is its strength but also its vulnerability. Many businesses find that their attempts to implement S&OP are frustrated by internal tensions between departments. Classic best practice suggests that S&OP must "belong" to the Chief Executive Officer. If that's not possible then a strong united coalition of department heads may be able to lead the process if they set clear ground rules and boundaries for working together.