Sales & Operations Planning or S&OP is the keystone of a production planning system. It should reflect a coherence between the company’s industrial activity, marketing plan and financial strategy. S&OP brings together volume, product families and budget. It operates on the tactical plane: according to the nature of the business, it takes into account seasonality and is developed using months as the unit of time.
Sales & Operations Planning helps you to balance supplies according to trends in demand. The search for this balance depends notably on the integration of incoming data such as:
– Sales forecasts,
– Firm orders confirmed by the customer,
– A marketing plan with a provisional schedule for new products.
The S&OP helps in defining a long-term strategy by determining on a month-to-month basis across the entire planning time frame:
– Volumes to be manufactured by product family
– Workforce and estimated hours
– Subcontracting requirements
– Necessary investments or their removal
– Supplies of raw materials and components
All of these forecasts will be transformed into a Master Production Schedule or MPS, which will break down the data article by article on the operational plane.