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If ERP is all about managing and controlling resources, Sales and Operations Planning is the brains behind the process and can be the difference between profit and loss.
What is involved?The S&OP process brings together many areas of the business to determine anticipated demand volume and how the company plans to supply product to meet that demand and best serve the customer within the financial goals of the company. The process starts with gathering the projected demand information and compiling it in a common format.
So what we have is different functions or business processes operating with different buckets of information granularity.
Globalization: Diverse and distant supply base for components and finished goods assembly increases complexity and supply lead times. Contract Manufacturing (CM): While the approaches can vary from full turn key to consignment CM, the common requirement is cross organizational communication for lead time and supply commitment.
Technology and Market Evolution: Changing consumer tastes and evolving technology mean there is a need for integrated, holistic decision-making to plan, adjust, and adapt while maintaining profitable operations.
Customer and Channel Focus: Conflict among direct, indirect and key customer channels means there is a need for coordinated channel and profitability management.
The latest evolution is to make the planning process even more agile and flexible as well as robust.
The specialist supply chain management solutions such as I2 Technologies, ICON-SCM, Kinaxis, Logility and TXT e-solutions, similarly provide support but their solutions are very supply chain focused, as one would expect, and don’t support the complete picture that many organisations now need. Demand Solutions S&OP is fully integrated with Demand Solutions Forecast Management and Demand Solutions Requirements Planning and imports data through the Forecast Management database.
ConclusionsSo what does such a successful implementation of S&OP actually deliver to the business? In a recently published IDC report[5], it states, “Inaccurate forecasts can make planning and allocation of resources and servicing new projects very challenging and it can make adequately servicing customers difficult if orders come in all at once. So it would seem that although S&OP is such a key element in manufacturing today, it means different things to different people depending on where they are on the evolutionary road.
DynaSys Sales & Operations Planning Software solutions are integrated, flexible and customizable, designed to facilitate communication and decision-making to balance supply and demand.
Faced with an unstable economic environment in which change is the only certainty, companies need to organize and implement an efficient and accurate planning process. Review the plan to ensure that it is acheivable and meets the company’s targets for revenue and profitability. The concept of Sales and Operations Planning (S&OP) is a month-based business process aimed at achieving a balance between a company’s overall demand and supply (availability).
Implementation at several levels in the company including those with executive responsibility for business units, e.g. Enabling a company's management to have a holistic view of the company and to have a window into the future.
You can read more about our offering within Supply Chain Planning or about our partner in the area, InSync.
Welcome to this year's Supply Chain Conference - Supply Chains of Tomorrow, with speakers from Starship Technolgies, The Absolut Company, Harley Davidson and more. See some examples of companies that have chosen Optilon as a supplier of first class SCM solutions. Effective sales and operations planning can help your organization meet its profitability objectives. As a result, organizations must spend a lot of time validating data by manually comparing it to source systems or the information stored in shared drives. Also, because uncontrolled spreadsheets cannot be automatically refreshed with up-to-date data, it is hard for organizations to create valuable what-if scenarios, since the data they extract from spreadsheets may be out of date by the time they get around to looking at it. Furthermore, Supply and Demands departments need to be able to easily and frequently communicate with one another.
Excel is here to stay – what does this mean for the future of sales and operations planning? Despite the inability of static, uncontrolled spreadsheets to support collaboration or make up-to-date data immediately available, research shows that Excel is here to stay. Millions of users enjoy its raw analytic power, flexible formatting capabilities and options for enhancing the look and feel of reports with charts and graphs. What if there was a way for your organization to keep working in native Excel while automating the processes related to S&OP to save time and reduce risk? Automated S&OP processes come with a host of advantages and are supported by a workflow engine to facilitate collaboration, business rules to protect data and a central database to store and access up-to-date information. Vena makes Finance, Accounting and Business processes more efficient by embracing the best of Excel® within an enterprise-class corporate performance management solution. 4 Sales Operations and Planning Fundamentals that Drive Results You are using an outdated browser. Sales and Operations Planning (S&OP) can be described most simply as a monthly process in which various business functions, principally manufacturing, distribution, sales and marketing meet formally to agree a rolling forward plan that balances customer requirements (demand and price) against the costs, capacity and capability of manufacturing and logistics (supply).

Sales and Operations Planning largely developed within traditional manufacturing and as a process to support the functioning of MRPII technology. This article has emphasised the value of sales and operations planning but notes that the traditional approach has major limitations in meeting the needs of many modern businesses. In a recent Supply Chain Management survey for Infor conducted by AMR Research, 88% of respondents said they are already using or planning to deploy an S&OP solution in the next 12 months. And that means integrating a number of different pieces of planning data around sales, production, inventory, finance and HR to provide the executive with focus, alignment and synchronisation about the company. One of its primary purposes is to establish production rates that will achieve management’s objective of maintaining, raising, or lowering inventories or backlogs, while usually attempting to keep the workforce relatively stable. From this information, a demand forecast is generated, typically beginning with the sales forecast originally used for planning purposes, but augmented with inputs from key customers and amended by knowledge of current operating and market conditions. Information flows both bottom up (sales, customer, VMI and co-managed programs, POS data, supply chain capacities) and top down (budget, business plan, category or customer plans, market share objectives, NPI plans).
There is a need for accurate, longer forecasting horizons and reduced near term flexibility. This means there is a need for better planning to collaborate with CMs and longer forecast (5–9 months) horizons.
Therefore there is a requirement for the ability to reduce organizational effort and time needed to develop robust S&OP processes. S&OP therefore needs to support established, robust planning to assist in assimilation. Initially it was simply matching demand and supply; balancing supply with the best expectation of demand.
It also included the ability to incorporate events such as new product introduction and product changes. Cognos is well-known and well-used business intelligence product and therefore to use for S&OP one would need to configure the product to do the job. It utilizes key-metric graphs and charts to visually present the aggregated state of your business for informed decision making. The reality is that in any operational planning process there are multiple ways to meet customer demand. This requires insight to the company’s strategic objectives and operations to achieve the optimal levels and product mix.
Gather input from as many sources as you can, and collaborate on the numbers until everybody agrees. Look at the possible results of unplanned supply chain interruptions for key raw materials or components, and make plans for how to deal with these events if they arise. An effective S&OP process links together business planning and master planning within a company. The annual budget process that many companies work with is strongly connected to business planning.
The balance must exist both at the aggregate level, in terms of volume, and on a detail level, in terms of product mix. Many are using uncontrolled Microsoft® Excel® spreadsheets to aggregate, share and report on data. The Supply Planner needs to communicate with a variety of departments in near real-time to ensure a viable plan has been created and can be carried out. Develop your personas and understand the buyer’s journeyThe most important part of inbound sales is understanding who your buyer personas are and the steps their journey requires them to take before they purchase. It must extend through a planning horizon sufficient to plan the labor, equipment, facilities, material, and finances required to accomplish the production plan. The next step is to match the demand forecast against any known or anticipated manufacturing and logistics constraints. It is the reconciliation of these information flows to provide actionable planning that is the key to successful S&OP.
The goal is an executive planning process that seeks to define the total strategic plan for the business and completely align strategy with execution. If you join plant floors to ERP you can monitor those operations up from the shop floor to business goals. So we are talking about integration and collaboration not only at a technical level but also at a business process level. Sales and operations planning is also often based on product families, but has physical units [Nr, Kg, Volume, etc] as a base.
Sales and operations planning is focused on volume balance and is a dimension-oriented type of planning. However, Excel lacks workflow capabilities or security features that prevent users from making unauthorized changes to data, formulas and models.
However, static spreadsheets do not support communication, forcing users to resort to emailing each other back and forth.

The buyer’s journey contains information about where in the sales process a persona’s paint points are identified. But has S&OP changed with the times and is it applicable in today’s global agile world?
Any issues identified are then resolved; this often includes looking at alternative strategies. Kinder sees that this is where most organisations are, or strive to be, in their S&OP maturity curve. However, the BI family of products do not provide detailed demand planning or constrained supply planning that is an important aspect of simulation within the S&OP process.
Sales and operations planning is a rolling plan that provides monitoring of the business plan. The mix (details) is a more transaction-oriented type of planning that handles mainly material and detailed planning. Personas embody your ideal buyer’s characteristics, which are important to understand before you start designing your sales process. The re-planning process focuses on changes from the previously agreed sales and operations plan. S&OP gives a company the opportunity to control resources such as plant, machinery, personnel, etc. Much of the design will be centered around the persona and alleviating his or her pain points.2.
These and a number of other questions are key to success in today’s collaborative world. Define your sales goals, KPIs and how you will measure themThe next important phase is determining what key performance metrics you will measure.
Determining KPIs before designing your inbound process is vital; if you create the process before knowing what you will measure you risk creating a system that will not capture the information from which you will be determining success. KPIs in the sales process can range from those of the individual rep level (number of completed activities, conversion rates or percentage of monthly revenue) to the greater goals of the sales team or entire enterprise.
Once your goals and KPIs are solidified you will have an understanding of what the outputs of the inbound sales process will be and how you will need to develop the system to report the metrics on which you will be reporting.3. Determine who makes the jump from a lead to an SQLWith the implementation of inbound marketing we have a means to capture the information that gives us the ability to use inputs from leads to determine whether they are qualified to enter the sales cycle.
At the highest point of the sales funnel we want to determine marketing-qualified criteria. Determining who becomes an MQL is often based on the marketing actions they take throughout the inbound funnel (filling out forms, viewing the blog and downloading content offers, to name a few). You want to base MQL criteria on activities that most leads take prior to entering the sales process. Once you have the inbound process implemented, you can use closed-loop analytics to alter MQL criteria and automate the hand-off to sales using an MQL workflow.Next we have to determine who is sales-qualified. An SQL is different from an MQL because now the sales rep has had some type of engagement with the MQL to determine its fit within your sales process. As this new method of marketing is adopted, a new sales process needs to be implemented to cater to leads that already have a familiarity with your product. Determining SQL criteria is a little more difficult because this process is usually something that is completed by the sales rep. This new process, called inbound sales, focuses on the a lead’s pain points, personal needs and goals.
Once lead becomes an MQL it enters the sales funnel, and it is important for the sales rep to determine whether this MQL is worth nurturing through to the end. Your organization should determine activities and events that both the rep and the lead must complete before they are shifted to an SQL.
BANT (budget, authority, needs, timeline) or the slightly less well known GPC (goals, plans and challenges) are the two most common frameworks we see used in the B2B space.
Following one of these sets of requirements will ensure that your sales reps work efficiently by only selling to leads that will actually be interested in signing a proposal.
Make it easy for your reps to know who they are speaking to and where in the funnel each lead isClarity is key in the inbound sales process. It is crucial that your reps are easily able to determine what stage in the sales cycle a lead or opportunity is in, and what actions the rep should take to continue nurturing it through the process. Having a defined sales process at each lifecycle and opportunity stage helps the reps know which path to take in their selling efforts and what has already been done. Planning this out prior to solidifying your inbound sales process will help you understand the technical requirements for determining where automation can be used and what parts of the process need a rep’s touch.

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