Supply Chain Concepts

Sales & Operations Planning (S&OP)

Major Topic Area: ERP/MRPII

One of the most important business processes within an ERP system is called Sales & Operations Planning (S&OP). S&OP is a monthly process that should be managed and operated by senior/upper management. The overall objective of the process is to maximize the earnings and profits for the organization. This objective is accomplished as a result of the following process outputs:

1. Establishing overall monthly demand, supply, and inventory plans for the company
2. Utilizing production strategies that optimize the earnings potential of those plans
3. Integrating all major company plans (i.e. marketing, finance, logistics, human resources) so that they support each other and are synchronized

S&OP typically aggregates those plans to a product family or brand level. In addition, the plans, depending upon the industry, can have a 24 - 60 month horizon.

 

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