Sales & Operation Planning: Why It's Important to Plan

The Sales & Operation Planning (S&OP) planning method helps decision making and the balance between demand and supply. Being very useful in the integration of financial planning with operational planning. Find out why this method is still so widely used and how it can help your hardware company.

Sales and Operations Planning: What it is and how it works

Sales & Operation Planning, created in the early 80s, is key to operational efficiency since it is presented as a method in which all areas of the company are involved, that is, it integrates plans and strategies within the supply chain process.

By obtaining information from the key areas of the company: sales, marketing, manufacturing and distribution, collaboration between departments is easier. And above all effective. The main objective of the S&OP is to achieve a global vision of the planning of all the teams so that they can develop their activities in the same line.

And why use it in a hardware company? Advantages to consider

Sales & Operation Planning can be very useful in any sector. In the case of hardware companies, it fulfills the function of aligning supply and demand. And support the good strategy of the company. And…

Improves the planning structure

Thanks to the Sales & Operation Planning method, a planning structure is created with valuable data and important information regarding sales history. With these reports in hand, it will be easier to anticipate possible problems in the company or in the market.

The company adopts the philosophy of lean manufacturing

Sales & Operation Planning is synonymous with lean manufacturing. It favors the elimination of everything that has no value within the production chain. The result is more agile, efficient, and less expensive processes.

Improves horizontal communication

It is possible to reduce costs due to poor inventory management. And it also achieves excellent communication between the different departments of the company.


Steps to implement Sales & Operation Planning in a company

If you also want to implement S&OP in your company, you must start with:

  1. Collect data. Collect data and information on past sales, production capacity and stock. It will allow to analyze or predict future market trends.
  2. Plan demand or sales. Always considering variability, market fluctuations and competing actions. And the customer service policies of the company itself.
  3. Detail supplies and operations. This is where Sales & Operation Planning is when you have to evaluate the ability to meet demand by looking closely at inventory and available capacity. As well as the scheduling of current operations. It is about analyzing the viability of the strategies.
  4. S&OP Meeting. It involves both teams and managers and serves to share the plans and strategies of all departments, as well as their implementation.

Now that you know what Sales & Operation Planning is and how it works, you will be clearer about how to take advantage of it in your company.

But if what you are looking for is to increase the profitability of your imports of furniture and construction hardware from China, the solution is simple, you must have the best partner by your side. IBMH and its team of experts in purchasing management and hardware quality audits, is just what you need for your business. Contact us today!