Collaborative Sales and Operations Planning

Missed tune = A hell of S&OP This document contains how to build an S&OP orchestra tune by tune: # 1 - Recruit the musicians = Identify Stakeholders ↳ Assemble your cross-functional orchestra: sales, marketing, finance, manufacturing, logistics, R&D, regulatory, and supply chain ↳ Don’t forget your conductor: secure executive sponsorship # 2 - Share the Score = Communicate Purpose and Goals ↳ Distribute the S&OP “sheet music” ↳ Clearly define the process goals, key deliverables, and what each stakeholder should expect # 3 - Tune the Instruments = Build Demand Planning Process ↳ Start with a basic forecast using historical data. Excel works just fine. ↳ The goal isn’t perfect accuracy yet; it’s to establish a baseline and build rhythm # 4 - Add the Harmony = Implement Basic Supply Planning ↳ Create a supply plan that supports the forecast and respects constraints: capacity, lead times, and production limits ↳ Harmony happens when demand and supply play in sync # 5 - Perform Monthly = Set Up S&OP Drumbeat ↳ Establish your monthly cadence: short, focused S&OP meetings with all key players ↳ Use these rehearsals to discuss demand-supply balance, gaps, and key risks # 6 - Listen to the Sound = Start Tracking Metrics ↳ Track critical KPIs: forecast accuracy, inventory health, service levels, and AOP (annual operating plan) progress ↳ Build a dashboard so leaders can hear the music loud and clear # 7 - Take the Show in Tour = Automate and Scale ↳ Once your orchestra is in sync, invest in advanced planning tools to automate and scale across the business ↳ From practice room to main stage Any others to add?

S&OP stands for Sales and #OperationsPlanning. It's a strategic business management process that aims to align a company's sales and operational plans, ensuring that supply meets #demand and that the overall business strategy is supported by coordinated #plans and decisions. S&OP is not just about balancing supply and demand; it's a collaborative effort that involves various departments like sales, marketing, production, and finance to achieve organizational goals Demand Side Contributions 1) Demand Forecasts: Predictions of future #customerdemand based on historical data, #markettrends, and promotional plans. These forecasts guide production and #inventoryplanning. 2) Demand Plan Commitments: Confirmed agreements on the forecasted demand numbers, ensuring alignment between #sales, #marketing, and operations 3) Demand Plan Numbers and Assumptions: The data behind the #demandplan, including the rationale for forecasts (e.g. expected #marketgrowth, #seasonaldemand) 4) #Market Analysis: Insights into #marketconditions, competitor activities, and #consumerbehavior that can influence demand, providing context for the demand plan Supply Side Contributions 1) Output and Resources: Availability of production capacity, #labor, #rawmaterials, and other resources needed to meet demand 2) Product Families: Grouping products with similar #productionprocesses or demand patterns to simplify #planning #alignment 3) #Operations Constraints: Factors limiting supply capabilities, such as #machinecapacity, lead times, labor shortages, or material availability 4) Operations Strategies: 1.Level Strategy: Maintaining a consistent #production rate regardless of #demandfluctuations 2.Chase Strategy: Adjusting production to match demand changes. 3.#Hybrid Strategy: Combining both level and chase #strategies for flexibility 5) Supply-Demand Strategies: Approaches to balance supply and demand 1.#MTS (Make to Stock): Producing for #inventory to meet #forecastdemand 2.#MTO (Make to Order): Producing only after receiving customer orders 3.#ATO (Assemble to Order): Assembling products after orders are placed 4.#ETO (Engineer to Order): Custom production based on unique customer specifications 6) Actual Results and KPIS: Historical data on production, inventory, and delivery performance, used to refine plans and address gaps Finance Contributions: ensures the feasibility and #profitability of the S&OP plan 1) Financial Feasibility: Assessment of whether the proposed plans (demand & supply) align with #financial goals, such as cost targets and #revenue projections 2) Fit with Business Plan: Ensuring the S&OP outcomes are aligned with the company’s strategic objectives, such as growth targets or market share goals #Cooperation Effective #S&OP requires close collaboration between all functions (#Demand, #Supply, and #Finance) to create a balanced plan that meets customer expectations while optimizing costs and resources. Reference: #CISCPM material #erp #mrp #sap

Sales & Operations Planning in FMCG In the fast paced, competitive world of Fast Moving Consumer Goods (FMCG), alignment between demand and supply is key. Sales and Operations Planning (S&OP) provides a structured, cross functional process to ensure that supply chain, sales, finance and marketing work together. S&OP is a collaborative decision making process that balances supply & demand, links operational planning with financial planning & aligns business goals across departments summerized as follows:- 1. S&OP Framework Overview : A typical S&OP cycle consists of synchronized activities across multiple business units: Key Components: - Demand Planning - Supply Planning - Financial Reconciliation - Executive Review - Performance Tracking This monthly cycle ensures that all stake holders contribute to a single, agreed upon plan. 2. Demand Planning: It forecasts customer needs using a mix of historical data, market trends & promotional insights. Key Activities: - Collaborative forecasting with sales & marketing - Forecast adjustment for new products & trade promotions - Managing forecast bias & accuracy 3. Supply Planning: It matches demand forecasts with production, inventory & distribution capacity. Focus Areas: - Capacity & material planning - Inventory policies (safety stock, min max levels) - Procurement lead times and supplier constraints - Multi tier network planning for fast moving SKUs 4. Financial Integration: Financial alignment ensures that the operational plan supports profitability & budget goals. Key Focus: - Volume to value translation - Margin and cost to serve analysis - Alignment with financial targets & forecasts - Investment trade offs (capacity, working capital) 5. Balancing Demand & Supply :This phase reconciles the forecast with supply realities, identifying gaps & trade offs. Tools & Techniques: - Constraint analysis - What if scenario modeling - Inventory & service level optimization - Sales & procurement levers for balancing 6. Pre-S&OP Meeting :This cross functional session prepares insights for executive decisions. Focus Areas: - Demand supply gaps & risk mitigation - Action plans for high impact variances - Forecast vs. actual variance explanation 7. Performance Metrics and KPIs: KPIs help monitor plan effectiveness, process maturity & business impact. Key KPIs: - Forecast Accuracy - Plan Adherence - Customer Service Level - Inventory Turnover & Days of Coverage 8. Implementation Roadmap: Rolling out S&OP requires careful design & change management. Phased Approach: - Assess current maturity and readiness - Define vision, governance & roles - Pilot in selected categories or markets - Roll out enterprise wide - Monitor, review & refine continuously Enablers: - Leadership commitment - Data accuracy & availability - Aligned incentives & ownership - Change management & communication plan

Sales and Operations Planning is my favorite domain for data analysts. Here is why analytical skills are in high demand in S&OP teams. In Sales and Operations Planning (S&OP) it’s all about aligning the company’s sales, marketing, finance, and supply chain functions to ensure that demand and supply are balanced, and business goals are met efficiently. S&OP helps organizations make better decisions by integrating data, forecasting, and cross-functional collaboration to optimize resources and meet customer needs. 𝗗𝗮𝘁𝗮 𝗔𝗻𝗮𝗹𝘆𝘀𝘁𝘀 𝗧𝗮𝘀𝗸𝘀 𝗶𝗻 𝗦&𝗢𝗣: 1. 𝗗𝗲𝗺𝗮𝗻𝗱 𝗙𝗼𝗿𝗲𝗰𝗮𝘀𝘁𝗶𝗻𝗴: You’ll analyze historical sales data and market trends to forecast future demand. This helps the business align its marketing campaigns, inventory, and work force with customer needs. 2. 𝗦𝘂𝗽𝗽𝗹𝘆 𝗖𝗵𝗮𝗶𝗻 𝗢𝗽𝘁𝗶𝗺𝗶𝘇𝗮𝘁𝗶𝗼𝗻: By analyzing data across the supply chain, you’ll identify bottlenecks, inefficiencies, and opportunities to improve operations, by ensuring that products are delivered on time and within budget. 3. 𝗦𝗰𝗲𝗻𝗮𝗿𝗶𝗼 𝗔𝗻𝗮𝗹𝘆𝘀𝗶𝘀: S&OP requires constant adjustments. You’ll create "what-if" scenarios to predict the impact of changes in demand, supply, or market conditions, enabling the business teams to make better decisions. 4. 𝗖𝗼𝗹𝗹𝗮𝗯𝗼𝗿𝗮𝘁𝗶𝗼𝗻: You’ll work closely with sales, marketing, finance, and operations teams to ensure everyone is aligned and working towards common goals. Your ability to translate data into recommendations for the different stakeholders is important in this cross-functional collaboration. 5. 𝗣𝗲𝗿𝗳𝗼𝗿𝗺𝗮𝗻𝗰𝗲 𝗠𝗼𝗻𝗶𝘁𝗼𝗿𝗶𝗻𝗴: Tracking KPIs and metrics is the baseline for continuous improvement. You’ll provide the data-driven insights that help the business stay on track and adapt to changing conditions. I worked on the network planning team responsible for the S&OP process of Zalando's fast-growing network and built the first steps of S&OP processes for multiple companies as a consultant at RizonX. In every project, data analysts have played an important role in bridging the gaps between the different teams by providing aligned reports, dashboards, and forecasts. Does your company run a structured S&OP process utilizing data analytics to its full potential? Have you worked on S&OP teams or are considering it for your future career? ---------------- ♻️ Share if you find this post useful ➕ Follow for more daily insights on how to grow your career in the data field #dataanalytics #supplychainmanagement #salesandoperationsplanning #demandplanning #careergrowth

+++ What is S&OP in Supply Chain +++ A beginners guide… Sales & Operations Planning (S&OP) is a crucial process that helps organizations to balance supply and demand, align production / Sourcing with sales forecasts, and optimize supply chain operations. It ensures the right products are available at the right time, driving efficiency, reducing costs, and improving customer satisfaction. Below are Step-by-Step Breakdown of the S&OP Process: 1. Data Gathering:- Collect historical sales data, market trends, promotional schedules, and stock levels to understand past demand patterns and predict future sales. Example: An FMCG company gathers data from previous months about consumer demand for popular products like snacks or beverages and notes seasonal sales spikes. 2. Demand Planning :- Use the gathered data to forecast future demand based on factors like customer behavior, upcoming promotions, and market trends. Example: Based on previous data, the company forecasts an increase in demand for beverages during the summer months due to rising temperatures and an upcoming marketing campaign. 3. Supply Planning :- Evaluate production capabilities, inventory levels, and supplier capacities to ensure they can meet the forecasted demand. Example: The company checks its production lines and inventory for Products, ensuring enough raw materials like packaging and ingredients are available from suppliers to meet the forecasted demand. 4. Pre-S&OP Meeting :- Collaborate with cross-functional teams to review the demand and supply plans, identify gaps, and adjust production, procurement, and sales strategies. Example: The sales team meets with production and logistics teams to discuss potential gaps, like stock shortages or capacity constraints, especially if demand is expected to exceed production capacity. 5. Executive S&OP Meeting :- Senior leadership reviews the finalized plan, aligning it with business goals and making strategic decisions on production adjustments, distribution, or investments. Example: The leadership team approves the final demand and supply plan, ensuring it aligns with financial goals, and they authorize additional Shifts or Over Time in production if needed. 6. Implementation :- Execute the plan by aligning production schedules with sales forecasts, managing supplier relationships, and preparing distribution channels. Example: The production team adjusts manufacturing schedules for beverages, ensuring that the production is ramped up to meet the forecasted demand during the summer season. Logistics teams start planning distribution. 7. Performance Review & Adjustments :- Continuously monitor actual sales and supply chain performance, compare it with forecasts, and make necessary adjustments to stay on track. Example: After the summer season, the company reviews whether the beverage sales met the forecast and revise it if necessary. #SupplyChain #S&OP #OperationsPlanning #MuneerThaivalappil