OVERVIEW

An S&OP process without direction is a flawed top-management planning process. The business planning structure, at the top of the ERP business model, establishes this direction in high-performance firms. The S&OP management system is essentially the infrastructure to help ensure proper process within the ERP business model making sure top management s vision is executed. Strategic planning, while not part of the S&OP, is a major component of the business plan and a prerequisite to high-performance sales and operations planning.

The ERP business model begins with the top-management vision. In high-performance ERP, the business plan is made up of at least three components: (1) strategic planning, (2) financial planning, and (3) business goals. See Figure 3.1.

If business planning is taken out of the ERP business model and looked at by itself in detail, it can be viewed as a hierarchy of actions, only some of which are governed by the S&OP process. See Figure 3.2.

Figure 3.2 depicts the elements in robust business planning. High-performance ERP process does not dictate or prescribe methods for how to determine the vision of market success, only how to execute these plans. In other words, if a company s vision does not meet any consumer s needs, even the best ERP efforts and process will not result in success. Class A ERP performance does ensure the delivery of the vision, however. For example, if a business s management expects high-quality sustainable experiences within the performance objectives they have chosen, it just makes good sense that the business...