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.
It is done once a month and is reviewed (discussion & decision making) by senior management at an aggregate (product or service family) level
The process must reconcile all supply, demand and new products at both the detail and aggregate level and tie to the Business Plan
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
Executed properly the Sales and Operations Planning Process links the Strategic Plans for the business with execution and reviews performance measures for continuous improvement
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
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
(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
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.
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."
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...