3 Mistakes to Avoid in Sales and Operations Planning (S&OP)

Sales and operations planning (S&OP) is now considered to be one of the important processes within successful supply chain management.

sales and operations planning

It is essential to ensure the smooth running of a business both in the short and long-term and helps companies balance:

  • supply and demand
  • costs
  • customer service

A good S&OP process will undergo many years of regular improvement with adjustments to maximise sales and productivity within different areas of the organisation.

Whether you are just starting out with your planning or looking to improve these are three major mistakes to avoid in S&OP.

1. Not getting the balance right

This is one of the most important things to get right in S&OP, yet so many businesses get it very wrong.

Finding the right balance of supply and demand is crucial to your success. Produce too little and both the sales team and the consumer is left feeling let down, but produce too much and you are left with goods that cost you warehouse space and may need heavy discounting to shift.

Equal importance should be placed on both the sales and operations areas of your business if you want to achieve a harmonious supply chain.

2. Planning for just one outcome

Never plan for only one outcome.

It has been an S&OP rule for many years to work towards the ‘one goal’ – a business’s ultimate ideal ending. Unfortunately, this just simply isn’t viable and not only does it diminish the importance of your executives it can leave you in hot water if things go wrong.

It’s an S&OP executive’s job to mitigate risk and plan for alternate outcomes, just in case the supply and demand does not follow the path it is supposed to.

Don’t make the mistake of planning for something that can often be inconsistent, always plan for both positive and negative alternate results.

3. A lack of engagement across the board

Another one of the biggest mistakes businesses should avoid in S&OP is the inability to engage with all areas of the business.

The entire reason good S&OP is crucial to an organisations success is because if done correctly, it enables the entire business to move in the same direction. Despite this fact, many companies still fail to understand the importance of communication.

Whilst operations would want to see results in units, finance is more likely to need information in the form of net margins.

Being able to communicate plans in a way that sales, operations and finance can understand will ensure that they are more involved in the S&OP process and can help to create a smoother supply chain.

These are three obvious but common mistakes that businesses fall down on when it comes to S&OP. However, alongside correcting these mistakes, it’s important to always regularly check your S&OP process on a weekly to monthly basis to ensure that calculations and forecasts are heading in the right direction.

Fluidity is vital in business, so you need to be doing everything you can to improve the flexibility of your supply chain today.

Getting expert and independent help with your S&OP can not only make sure you avoid common mistakes, but also ensure you have workable plans both from today and into the future. Visit Total Logistics to find out more.

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Cross-Departmental S & OP Issues

Sales and Operations Planning (S & OP) is a simple business system: look ahead and plan accordingly.  The complexity comes in as planning requires cross-departmental cooperation and support. When conflicts arise it can be a serious set back.

Sales and Operations Planning (S & OP)

Do you have Cross-Departmental issues with your Sales and Operations Planning

For example:

  • Demand Forecasting requires input from Sales and Marketing departments
  • Capacity planning involves Operations
  • Ordering on suppliers involves Purchasing & Financial Planning
  • Reaching a consensus forecast requires agreement from all of them

Sales and Operations Planning seems to be one of the most difficult business disciplines to make stick, especially in medium sized organisations.

However effective S&OP joins up your organisation to ensure that customer service levels are maintained, while inventories and plant capacity are optimised a key requirement of business success, so it’s worth the effort to make it work.

For independent help and support in sales and operations planning talk to Total Logistics the complete supply chain consultancy www.total-logistics.com

Retailers Must Have Robust Supply Chains!

Last week figures from the Office for National Statistics showed that UK retail sales volumes fell by 0.8% in February when compared against January’s results. These figures have revealed that although there is a general trend of improvement over the last quarter with sales volumes being 1.7% higher than the same period a year earlier retail is still facing a very difficult period.

robust supply chains

Is your supply chain ready for the summer?

For many the internet is now being seen as a possible solution and area for relaters to grow with 10.7% of all UK sales now being made online. With this in mind companies have been prompted to look towards innovation and new technologies in an effort to develop more online sales.

While the benefits of online retail are not in question how best to invest a retailer’s money to ensure sustainable growth is. Tempting as it is to buy into mobile sites, apps and the like this should never be made at the expense of grass root investment in logistics and supply chain operations. Weak supply chains can be disastrous to a retailers operation especially with the expected transport issues expected this summer.

If your supply chain infrastructure and logistics processes are robust and ready for the summer then ultimately customers will be disappointed impacting on sales and company reputation.

Effective Supply Chain Management is an on-going process and often needs an independent eye to see the complete picture. Experienced and independent Supply Chain Consultancy Total Logistics can undertake a complete supply chain review including s & op, logistics operations, plus warehouse design and layout. This supply chain review will assist you in reducing risk while also saving you money.

Established in 1989 Total Logistics has developed a hugely experienced team, (330+ years in total!), all with hands-on experience of managing supply chain operations. Clients have typically experienced savings range between 10% – 20%.

For more information call Total Logistics on +44 (0)118 977 3027 or visit www.total-logistics.com.