Sales & Operations Planning (sometimes known as SIOP or sales, inventory & operations planning) drives revenue, profitability and cash flow. Here are 5 tips to ensure success:
- Balances demand & supply – The key benefit of SIOP is to balance demand (sales forecasts) with supply (our ability to meet the sales forecast in the most profitable manner typically focused on production plans, purchase plans, capital plans and inventory plans).
- Encourages collaboration – An often-overlooked critical component to success is to align all the functions of a company on balancing demand with supply.
- Highlights roadblocks to success – What could be better than to avoid the drama and stress associated with pointing out issues (which are often attached to people)? Instead, SIOP highlights these issues as a part of the process.
- Forecasts financials – SIOP will not only balance demand with supply but it can also be used to forecast revenue and profitability.
- One Plan – How often do you find multiple sales forecasts and cost improvement plans – one to manage to, one to send to your boss, one for the budget, etc.? SIOP brings it together into 1 plan.