What is S&OP?
“S&OP” stands for Sales and Operations Planning. Depending on the industry or organization, you may also hear it referred to as “SIOP” or Sales, Inventory, Operations Planning (SIOP). Sometimes, it is even referred to as “IBP” or Integrated Business Planning. Typically, they mean the same thing.
The most important words to emphasize are planning and alignment. In S&OP, the goal is to have Sales, Operation, R&D/ New Products & Finance, all planning together. The mission is to align a sales plan and the associated operations plans, to provide superior customer service and profitability.
How Do You Benefit from SIOP?
Sales & Marketing
Sales and Marketing leaders will gain high levels of service for their customers with on-time-in-full (OTIF) levels in the high 90’s, shorter lead-times, and high ratings on customer scorecards. They also will gain improved levels of responsiveness to customer needs and confidence in new product rollouts.
Engineering
For engineer-to-order (ETO) and configure-to-order (CTO) businesses, Engineering leaders will gain visibility into workload requirements to support drawings, customer approvals, and bill of material designs. They will be able to plan for the appropriate level of engineering capacity and capabilities.
Manufacturing
Manufacturing leaders will gain visibility into work center, machine, equipment, tooling, maintenance, staffing, and training requirements so that they can plan accordingly. They will also gain visibility into the master production schedule so that they can optimize run sizes with changeovers and costs.
Purchasing
Purchasing leaders will gain visibility into raw material, component, ingredient, and outside processing requirements so that they can work with suppliers to set up the appropriate programs and contracts to meet customer requirements. Suppliers will have visibility to capacity and scorecards.
Logistics
Logistics leaders will gain visibility into storage, warehousing, handling, picking, packing, shipping, transportation, returns, and equipment requirements so that they can plan accordingly. As gaps arise, service and cost options can be analyzed to expand capacity or capabilities as needed to support customers.
Finance
Finance leaders will gain visibility into sales forecasts, engineering and manufacturing plans, capital expenditure needs, purchase forecasts, staffing and support resource requirements, logistics forecasts, and inventory projections. Thus, they will have revenue, cost, profitability, and cash flow projections.
Q&A: Why Implement S&OP?
Are you interested in the answers to any of these questions?
- Are you concerned about inflationary pressures?
- Are you concerned that inventory levels and obsolete inventory reserves are increasing?
- Do you have customer profitability analysis and forecasts needed to prioritize customers?
- Are you struggling to keep up with customer orders?
- Will your sales and operations plan support your growth and profitability plans?
- Are Sales and Operations on the same page?
Read our Q&A on why implement SIOP.
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SIOP Accolades
Qualitative & Quantitative Results
Credibility and Trust
SIOP Success
Value Statement
Client Success Stories
We asked our clients about the results we achieved together.
Rick Moroski, Sr. VP and COO, SchenckProcess
Craig Young, Senior Director of Operation, Nellson Gallery
Kelly Ford, Aerospace Executive
Jim Cenname, President, US Aluminum
Blog Posts for SIOP
In this episode of Supply Chain Chats, Lisa Anderson talks about the state of business, the economy, and supply chain, what it means and how to take advantage of the opportunities that will come down the pike.She talks in detail about inflation, recession, the impacts of interest rates and the labor force and what the successful companies are doing differently to succeed.
Special Report: How Companies Should Reshape to Succeed in 2023 & Take Advantage of Huge Opportunities Coming Down the Pike
If you want to serve your key customers successfully (with high on-time-in-full (OTIF), short lead times, and proactive service) so that you can take advantage of the opportunities coming down the pike while addressing the hard realities of the current business environment (potential recessions, high interest rates, and less access to capital), you MUST balance sales, operations and inventory.
Complimentary Discussion on SIOP Readiness
