The core S&OP process is comprised of five high-level steps:
- Data gathering: Statistical forecast with sales overrides
- Demand forecast: Demand planning team creates their statistical forecast
- Supply plan: Constraint-based supply plans created
- Pre-S&OP meeting: Consensus recommendations for S&OP team
- Exec S&OP meeting: Final decisions made
The integral aspect here is the integration of sales, marketing, operations, and finance (possibly even IT) to agree on the forecast, supply plans, and financial outlook based on the final decisions. Each business unit has a contribution and an impact. Depending on how the numbers look, finance may have increased cash flow, which enables them to make different investment choices. The executive team may have pending expansion plans that are predicated on sales performance.
With complexities in the supply chain always on the rise, S&OP teams need a unified system that enables them to understand the probabilities of certain scenarios. Having a unified system gives S&OP real-time ramifications of a new account closing one month earlier than forecast, or if a key account is lost. They are also able to model what happens if a supplier is late. How does it impact their cashflow this month, or next month? This is where leveraging advanced analytics in a unified S&OP platform is key. This enables the S&OP team to answer these key questions and others confidently.
Working in silos, in unconnected and non-unified plans is an immature, under-performing approach to business; not just S&OP. S&OP teams are feeling the pressure to work in a more collaborative, unified way. Let a leading solution like Vanguard Predictive Planning help you achieve your goals.
About Vanguard Software
Vanguard Software introduced its first product for decision support analysis in 1995. Today, companies across every major industry and more than 60 countries rely on the Vanguard Predictive Planning platform. Vanguard Software is based in Cary, North Carolina.