Sales & Operations Planning (S&OP)

A Focus on Sales and Operations Planning
Current Solution: Sales & Operations Planning (S&OP)

Planning for Sales and Operations (S&OP)

Disagreements between sales and operations are common when there are varying expectations. The sales team might make a sale and anticipate that operations will fulfill the order quickly, while operations may point out that the forecast was much lower than the sales figure, making it difficult to act so quickly. This is the classic difference between constrained and unconstrained demand, which could be solved with Sales and Operations Planning (S&OP). S&OP is a combined approach to supply and demand, which synchronizes projections with facts. It begins with a strong demand signal, created from the overall sales force forecasts, that is moderated by sales management, who brings market knowledge and product details into view. This type of forecast is typically known as the unconstrained demand forecast.

There is cross-functional feedback that supports evaluation, analysis and improvement.

Reveal specializes in providing the required data to help with decision-making. By utilizing the highest standards, introducing organizational modifications, and ensuring that corporate regulations and practices are in harmony, Reveal makes it easier to control shifting business conditions.

Effective Sales and Operations Planning

In order to ensure company-wide unity, Sales and Operational Planning must incorporate the proper stakeholders. Collaboration between sales, finance, operations and product management is critical, as leaving even one of these groups out could lead to a lack of comprehension of the individual perspectives and ramifications or even worse, the exclusion of critical players with important knowledge.

The Sales teams are focused on increasing revenue with business accounts as a major factor; Operations needs to know what needs to be produced and when, demand for products by time; Procurement has to know what materials are required; and Finance is in charge of controlling the net margins of the business. To effectively utilize S&OP, it is essential to have a single source of accurate information for stakeholders to make decisions.

By implementing a successful Sales and Operations Planning process, companies can gain the advantage of more secure product lifecycle management, swift and regulated new product introductions, optimized inventory, minimized out-of-date items, enhanced sales forecasts and situation planning, shorter customer lead times, and an improved customer experience.

Difficulties of S&OP in Supply Chains

A patchwork of spreadsheets and PowerPoint slides, hastily put together, gives a glimpse into the future. Unfortunately, this technology infrastructure has the potential to miss important details, and making "what-if" assessments can be time-consuming. This does not promote agility, the ability to seize opportunity, or the quick reaction to shifts in the market.

When there is a lack of executive input in an S&OP process, it tends to become a purely tactical enterprise with minimal strategic importance. Without a robust S&OP strategy, there is a rush to present the monthly results to upper management, a lack of cross-functional cooperation, and everybody relying on outdated data.

When executive decision makers do not become fully involved in the running of the business, it is usually because they feel there is insufficient information to make informed choices. A comprehensive technology system, such as SAP, combined with excellent personnel and efficient business processes will increase the power of the company.

The Facts of Life

In this period of volatility, unpredictability, complication, and ambivalence (VUCA), speed and versatility in adapting is the essential factor for combining business strategies and attaining a higher market share.

As commerce continues to develop, so too do the difficulties. On the one hand, the sheer amount of data created nowadays is remarkable. But on the other, it takes a tremendous effort to locate the relevant facts and intelligence quickly enough for business purposes. S&OP is the framework for scenario planning that can be used for assessment or for transforming validated wisdom into executable plans. To establish a quality S&OP framework, one must overcome many obstacles. However, the outcome makes it all worthwhile!

Reveal's  methodology assists companies in enhancing their internal procedures, teaching users, and employing SAP intelligently in order to gain sustainable and tangible outcomes. The oVo® methodology encourages organizations to transition from being transaction-oriented to information-users that control the process and use their understanding. This process leads to improved agility, service, cost, and inventory performance.


How Can SAP Help With S&OP?

S&OP or IBP are core to SAP’s strategy. We see solutions to support our strategic mid-to-long term planning in our ERP solution in the S&OP, Flexible Planning, Demand Management and Production Planning modules. SAP also offers advanced planning/decision support solutions in their suite of products that are purpose-built to support the S&OP/IBP process, IBP being at the front of the pack to support the full S&OP cycle, revenue and inventory planning/optimization, mid-to-long-term capacity planning, PLM, cadence management- all combined with what if scenario planning and simulations.

How can SAP Help Us Manage Product Life Cycle Management and NPI?

First, we have the ability to manage what activities materials are eligible for by status, which allows us to set up our materials earlier and close out our materials cleanly. We also have functionality in the IBP solution to perform like and mixed modeling, adjust curves and trends and set up alerts. Within ECC and S/4HANA, we also have robust exception management which will help us to quickly identify and resolve any process integration breakdowns or deviations from plan.

What Are Some Ways That SAP Can Help Me Improve the Quality of My Demand Planning

Within IBP we have a whole suite of functionality to help us dial in our demand plan- from consensus demand planning, to statistical modeling, to simulations and scenario planning. We are very much in the drivers seat and can bring together historical and near real time information to help improve the quality of our demand plan. But- we know that we’re never going to be completely correct. As demand planners, we’re in the business of risk management- so we need an integrated approach and that’s where we can make use of the strength of the end to end team and exception monitoring/alert management in BOTH IBP and SAP ECC/S/4HANA.

Next Steps

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