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Sales Operation Planning Essay

2450 words - 10 pages

Executive Sales and Operations Planning
Main Street August 7, 2009
Company Presented by:

LOGO - PCI Associates President
Adjunct Instructor – IU Kelley School of Business - IUPUI

John S. Pennington

Why Plan?  Planning is a strategy for survival.

Planning can be anywhere on the spectrum from the dream to the nightmare.
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Why Do Organizations Plan?
 To anticipate and prepare for the future  To ensure adequate and available resources  To complete projects on time  To avoid problems  To establish backup plans  To ensure we don’t forget tasks  To determine potential results
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What’s The Alternative?
The alternative to planning is NOT planning, & ...view middle of the document...

It is a decision making process that ensures that tactical plans in all business functions are aligned and support the business plan.

PCI Associates


S&OP 101
 It is done once a month and is reviewed (discussion & decision making) by senior management at an aggregate (product or service family) level

PCI Associates


S&OP 101
 The process must reconcile all supply, demand and new products at both the detail and aggregate level and tie to the Business Plan

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S&OP 101
 It is the definitive statement of what the company plans to do for the near to intermediate term covering a horizon sufficient to plan for resources and support the annual Business Planning process

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S&OP 101
 Executed properly the Sales and Operations Planning Process links the Strategic Plans for the business with execution and reviews performance measures for continuous improvement

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S & OP in the Planning Cycle
Detailed planning & control (days, weeks out)
• Limited ability to adjust capacity • Detailed planning (day to day, hour by hour) • Lowest Risk

Tactical planning S&OP (months out)
• Workforce, inventory, subcontracting, and logistics decisions • Planning numbers somewhat “aggregated” (month by month) • Moderate risk
Months out

Strategic planning Long-Range Plan (years out)
• “Bricks & mortar” and major process choice decisions • Planning done at a very high level (quarterly or yearly) • High risk

Days/weeks out

Years out

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S&OP continued
(2 - 18 months out)

 Outside of time frame  strategic planning  Inside of time frame  tactical planning

“Big Picture” approach to planning  Families or groups (aggregation) of:

 

 Provide “rough” estimates
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Products Services Resources Technologies or skills

S&OP 101
 The objective of Sales and Operations Planning is to reach consensus on a single operating plan that allocates the critical resources of people, capacity, materials, time, and money to most effectively meet the market place in a profitable way.

PCI Associates


Why Do Companies Use S&OP?
 Many companies have difficulty in establishing a valid game plan for sales, production, procurement, and inventory levels -- and then tying them to day-to-day scheduling and execution. As a result, performance suffers: customer service is poor, production and procurement are inefficient, inventories are too high or too low, or all of the above.
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Why Do Companies Use S&OP?
 Sales & Operations Planning has emerged as an essential management tool in this age of rapid changes, increasingly demanding customers, and supply chains that extend half a world away. It's rightfully been called "top management's handle on the business."

PCI Associates


What is Executive S&OP?
 Executive S&OP is top management's part of the overall set of Sales & Operations Planning processes. It's a tool that enables the top management team to establish in...

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