S&OP: What You Can Learn from the Top Performers
May 07, 2012
Long advocated in the pages of Supply Chain Management Review and by expert observers of the supply chain scene, the Sales and Operations Planning process (S&OP) has reached a point of broad adoption. A recent study performed by The Hackett Group indicates that almost 70 percent of study participants have implemented an S&OP process. However, the study also reveals a wide gulf between S&OP top performers and those that merely practice S&OP. Not only do top performers apply S&OP best practices to a far greater extent, they also have begun to take the next step of integrating their S&OP and financial planning processes to drive true integrated business planning. As a result, top performing organizations find that S&OP is 68 percent more effective at driving benefits than it is for other organizations.
This article outlines study findings, provides key insights on challenges and opportunities, and offers a path forward for those seeking to join the ranks of S&OP top performers.
Let’s begin with a definition. We define Sales & Operations Planning as a collaborative decision-making process used to develop and align time-phased demand, supply, and financial plans in support of the overall business plan. S&OP is, by its nature, a cross-functional process that involves individuals from sales and marketing, supply chain, finance, procurement, logistics, and even R&D and capital projects.
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Long advocated in the pages of Supply Chain Management Review and by expert observers of the supply chain scene, the Sales and Operations Planning process (S&OP) has reached a point of broad adoption. A recent study performed by The Hackett Group indicates that almost 70 percent of study participants have implemented an S&OP process. However, the study also reveals a wide gulf between S&OP top performers and those that merely practice S&OP. Not only do top performers apply S&OP best practices to a far greater extent, they also have begun to take the next step of integrating their S&OP and financial planning processes to drive true integrated business planning. As a result, top performing organizations find that S&OP is 68 percent more effective at driving benefits than it is for other organizations.
This article outlines study findings, provides key insights on challenges and opportunities, and offers a path forward for those seeking to join the ranks of S&OP top performers.
Let’s begin with a definition. We define Sales & Operations Planning as a collaborative decision-making process used to develop and align time-phased demand, supply, and financial plans in support of the overall business plan. S&OP is, by its nature, a cross-functional process that involves individuals from sales and marketing, supply chain, finance, procurement, logistics, and even R&D and capital projects.
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