Question

Explain the sales and operations planning process and describe why it needs to be a dynamic process.

Answer 1

Sales and operations planning (S&OP) can be defined as an activity which is used to have a better harmonization between the supply of a produce and the demand of the producer with the help f a collaboration of the sales division of the organization with the activities of operations department in order to come up with a single production plan. The comprehensive objective is to have synchronization in the daily operations with corporate strategy.

The different steps of S&OP are given below:-

Data Collection:- Data collection with the help of forecasting and important variables for example cash on hand, recent sales

Data Planning:- This mainly includes the activities involved in analysis, forecasting and changing the demands

Production Planning:- Determination of production and distribution limitations and capabilities

Reconciliation:- Having synchronization between demand and supply and production plans

Meeting of the senior management:- The S&OP team provides the final inputs

Reason for a dynamic process:- S&OP which includes the alignment of the demand and supply of a production department and as these are mainly dependent on the demand forecast which keeps on changing and requires the coordination among various departments, thus the process needs to be dynamic in nature to accommodate the various requirements.