Sales and Operations Planning (S&OP) is a key discipline that helps today’s food companies achieve a sustained competitive advantage.
Whether your food organization is a mature business that needs process revitalization, or a growing business that requires oversight and control, committing to S&OP helps you drive the right product, place, time, quantity, cost and business performance.
Our team views S&OP as a process to develop customer-focused tactical plans for new and existing products with integrated supply chain management.
The process brings together all the plans for the business — sales, marketing, development, manufacturing, sourcing, and financial — into one integrated set of plans.
Fully integrating planning across the enterprise is key here. Unlike companies that tend to rely on more siloed approaches, those organizations committed to an effective S&OP process reconcile all supply, demand, and new product plans at both the detail and aggregate levels and tie the plan to the strategic vision for the business.
We see S&OP as the foundational building blocks of the company’s plans for the near to intermediate term. S&OP should cover the time frame needed to plan for resources and to support the annual business planning process.
When properly executed, the S&OP process links the strategic plans for the business with its execution and reviews performance measurements for continuous improvement.
Business Benefits of S&OP
An effective S&OP process offers distinct benefits to the food industry that a siloed approach to planning can’t achieve.
Five noteworthy business benefits include:
- A collaborative data tracking process. Enhanced data and collaboration between departments which allows for frequent adjustments in the food supply chain, to balance supply and demand.
- Resource optimization. The ability to better optimize resources, which reduces waste and increases efficiency.
- Improved customer satisfaction. Improved inventory and backlog management allows for timely customer service.
- Enhanced agility. As companies face disruptions in the food industry, S&OP equips organizations to adjust to changing internal or external conditions.
- Integrated KPIs. Leveraging real-time, actionable data that leads to better Key Performance Indicators (KPIs) for each department, tying in directly with the company’s key metrics.
Elements of Success
Today’s food companies have applied significant resources to S&OP-related software projects over the past decades. But in many cases, the results have been discouraging.
Even after investing money, time and organizational resources to complex enterprise system implementations, many organizations do not see the benefits they expected, nor realize improved processes. These projects fail to deliver any return on investment because these organizations did not change the process fully to leverage the enabling technology.
Getting value out of the sales and operations planning process is more than layering on technology over existing S&OP processes.
There is a critical “people dimension” to the initiative. There needs to be internal consensus, executive sponsorship and organizational alignment above all else.
There is a need for consensus on business metrics, calculations, and measurements.
More than a technology initiative, effective S&OP demands leadership, relationship building to facilitate synchronizing S&OP tasks across functions.
Resource to Explore
Whether you are new to S&OP, or want to ensure your existing S&OP processes are delivering what your business needs, Adroit offers you an in-depth white paper to download.
Understand the people, process and technology enablers that lead to effective S&OP.
Download the white paper on sales and operations best practices, share with your internal team, and contact us to learn more.