Chapter 8: Sales and Operations Planning
The sales and operations planning (S&OP) process, or the SIOP (sales, inventory, and operations planning) as it is called in some companies, is one of the most exciting and most talked about topics in business today. The interesting aspect about this is that the S&OP process is not new; in fact, some might argue that it is an old process. There is just a lot of new interest in it, and for good reason it pays off. Organizations are working not only internally but also with their suppliers and in some cases even their customers to help each other s top management planning process.
Virtually all high-performance organizations do some form of an S&OP process regularly. In these organizations, the S&OP is a monthly top management planning meeting where metrics and performance are reviewed and adjustments made based on recommendations concluded from data collection and analysis done in preparation for this review. The keys to success are preparation and good data mining in advance of the decision process and top management support or engagement. Top management should run these meetings.
AGENDA COMPONENTS OF THE S&OP PROCESS
This first activity is to evaluate performance for the current period (last 30 days). This agenda item is followed by an analysis of the 30-60-90-day time frames going forward. Beyond 90 days, on an exception basis, the rest of the 12-month rolling horizon is reviewed.
The components of the S&OP are as follows:
Review actions from last S&OP meeting.
Review of last 30 days...