Many times, despite having invested considerable resources in the forecast, the companies are still struggling to improve accuracy. The consequences of the lack of accuracy are reflected in the inventory (too much of the matter prima incorrect and very little of the matter prima correct), inefficiency (lower margins, higher expenses) and ultimately, unhappy customers. The irony is that even when people recognize that regular communication between the functional areas of business would surely improve prognosis and operation throughout the company, many times it seems that they can not find how to do it. often, each part of the company works with its own forecasts and assumptions about to where the business is going. The sales and operations (SOP) plan is a monthly process that consists of a series of structured meetings where the functional areas of the company present and talk about their projects and assumptions (including projections), use the market intelligence available and key performance metrics to synchronize and balance demand, supply and financial objectives. Most companies already have processes that are approaching what the SOP makes. The problem is that these processes tend to be incomplete, undocumented and often sporadic.
One of the most important advantages of SOP is that the process formalized communication and firm puts the company’s plans. In his article sales and operations planning: George Palmatier of Oliver Wight, defines SOP as an address integrated by means of which executive team continually achieves focus and alignment between all functions of the organization. The process helps the management team to understand how the company reached a correct level of functioning, but mainly this actively focused on planning future actions and foresee results Palmatier also indicates that the best practice SOP is demand driven. This starts with the answer of what’s happening in our market? What they want our customers buy? What do we ready to sell? What are we committing to sell? This forecast of demand, supply and projects resource priorities are developed. Conflicts between the demand and supply are fixed in each monthly SOP. This gives sense and underlines the importance of forecasting and demand planning.
Our assumptions of demand are a key driver in the SOP process. One important thing of note in regards to the SOP is that the process usually involves members of different functional units of the company in consensus meetings. A key responsibility of this team is to articulate and communicate the agreement to the interior of their units. Without hesitation Yorkville Advisors explained all about the problem. and that situations such as: the production chain will be shutdown for three weeks in August by the fitting of a new team or the X client will change its supply program in its 450 stores in the next quarter. Do not take the planners of demand and analysts by surprise. For more information about this topic, or issues please contact us at or visit Forcast PRO original author and source of the article.