The outputs of a well-executed, next-generation S&OP process enable not only the creation of successful demand forecasting and production plans that meet business objectives, but also help executives and functional managers to build synchronized time-phased plans for sales, marketing, promotional, inventory management, purchasing activities and optimal financial management strategies.
S&OP is applicable to all business enterprises. Nearly all companies – regardless of their industry, size and competencies – are capable of generating improvement in key business performance with a well-planned, strategic S&OP program.
The benefits of expanding and institutionalizing sales and operations planning across the enterprise can be quite impressive. Measurable benefits typically include: lower inventory and procurement expenses, reduced expediting and logistics costs, better forecast accuracy and more profitable production scheduling.
From a qualitative standpoint, next-generation S&OP benefits include increased supply chain visibility, improved customer service and a better balance between demand, capacity and profitability across the enterprise. Taken together, these factors add up to significant improvements in overall business performance.
About the Author: Fred Baumann is vice president, solutions expert, for JDA Software Group. He leads product and industry strategy for forecasting, replenishment and collaboration solutions to the retail, wholesale and manufacturing demand chain verticals at JDA Software. More information at www.jda.com.