Sales and Operations Plan


Sales and Operations Plan

The Sales and Operations Plan (S&OP; sometimes also called Sales, Inventory and Operations Plan or SIOP) is a managerial tool used for manufacturing planning and control. Its fundamental objective is to reconcile sales forecasts with production plans in terms of volume [Vollmann et al. (2005), "Manufacturing Planning and Control for Supply Chain Management", Fifth edition, McGraw Hill] . To do so, the S&OP has to coordinate planning efforts among the various departments involved in the process.

Definitions

APICS defines S&OP as the "function of setting the overall level of manufacturing output (production plan) and other activities to best satisfy the current planned levels of sales (sales plan and/or forecasts), while meeting general business objectives of profitability, productivity, competitive customer lead times, etc., as expressed in the overall business plan. One of its primary purposes is to establish production rates that will achieve management’s objective of maintaining, raising, or lowering inventories or backlogs, while usually attempting to keep the workforce relatively stable. It must extend through a planning horizon sufficient to plan the labor, equipment, facilities, material, and finances required to accomplish the production plan. As this plan affects many company functions, it is normally prepared with information from marketing, manufacturing, engineering, finance, materials, etc." [Dougherty, J.R., "Getting Started With Sales & Operations Planning", text available [http://www.partnersforexcellence.com/artoth01.htm here] ]

Sales and Operations Planning has also been described as "a set of decision-making processes to balance demand and supply, to integrate financial planning and operational planning, and to link high level strategic plans with day-to-day operations" [Wallace, Tom, author of textbooks on Sales and Operations Planning, see for example [http://www.tfwallace.com/pages/content/sop_101.html S&OP 101] ] .

The planning process

S&OP is the result of monthly planning activities. It is usually based on an Annual Operations Plan (AOP) that acts as the company's annual target in terms of sales and supply. Therefore, the Sales and Operations Plans are a means to gradually accomplish the AOP targets - by linking monthly sales and marketing planning directly to the operations side of a business [Ling, R.C. and W.E. Goddard (1992). "Orchestrating Success: Improve Control of the Business with Sales & Operations Planning", Wiley] . The process for deciding upon the monthly S&OP is illustrated in the figure below.

See also (external links)

A series of papers authored by Dr. Larry Lapide of the MIT Center for Transportation and Logistics:
* [http://ctl.mit.edu/public/jbf_fall_2004.pdf Sales and Operations Planning Part I: The Process]
* [http://ctl.mit.edu/public/jbf_winter_04_05.pdf Sales and Operations Planning Part II: Enabling Technology]
* [http://ctl.mit.edu/public/jbf_spring_2005.pdf Sales and Operations Planning Part III: A Diagnostics Model]

References


Wikimedia Foundation. 2010.

Look at other dictionaries:

  • plan — ▪ I. plan plan 1 [plæn] verb planned PTandPPX planning PRESPARTX 1. [intransitive, transitive] to think carefully about something you want to do in the future, and decide exactly how you will do it: • We ve been planning this …   Financial and business terms

  • Sales — For other uses, see Sales (disambiguation). Salesman redirects here. For the 1969 American documentary film, see Salesman (film). A beach salesman showing necklaces to a tourist in Mexico …   Wikipedia

  • Plan de génocide — Génocide Un génocide est l extermination physique, intentionnelle, systématique et programmée d un groupe ou d une partie d un groupe en raison de ses origines ethniques, religieuses ou sociales[1]. Sommaire 1 Étymologie 2 Définition …   Wikipédia en Français

  • Business and Industry Review — ▪ 1999 Introduction Overview        Annual Average Rates of Growth of Manufacturing Output, 1980 97, Table Pattern of Output, 1994 97, Table Index Numbers of Production, Employment, and Productivity in Manufacturing Industries, Table (For Annual… …   Universalium

  • Computers and Information Systems — ▪ 2009 Introduction Smartphone: The New Computer.       The market for the smartphone in reality a handheld computer for Web browsing, e mail, music, and video that was integrated with a cellular telephone continued to grow in 2008. According to… …   Universalium

  • Media and Publishing — ▪ 2007 Introduction The Frankfurt Book Fair enjoyed a record number of exhibitors, and the distribution of free newspapers surged. TV broadcasters experimented with ways of engaging their audience via the Internet; mobile TV grew; magazine… …   Universalium

  • Agriculture and Food Supplies — ▪ 2007 Introduction Bird flu reached Europe and Africa, and concerns over BSE continued to disrupt trade in beef. An international vault for seeds was under construction on an Arctic island. Stocks of important food fish species were reported… …   Universalium

  • HISTORICAL SURVEY: THE STATE AND ITS ANTECEDENTS (1880–2006) — Introduction It took the new Jewish nation about 70 years to emerge as the State of Israel. The immediate stimulus that initiated the modern return to Zion was the disappointment, in the last quarter of the 19th century, of the expectation that… …   Encyclopedia of Judaism

  • Marketing operations — Key concepts Adobe • Automation • Benchmarking Best Practices • Budget Cisco Systems • CMO Data Privacy • Data Quality Data Warehouses • Database Marketing Demand Generation Digital Asset Management Enterprise… …   Wikipedia

  • State and Local Affairs — ▪ 1997 Introduction       States continued to be at the centre of national debates on public policy during 1996. The U.S. Congress, reacting in part to successful experimentation by a number of states, enacted a historic welfare reform measure… …   Universalium


Share the article and excerpts

Direct link
Do a right-click on the link above
and select “Copy Link”

We are using cookies for the best presentation of our site. Continuing to use this site, you agree with this.