From my perspective, supply chain management (SCM) and sales and operations planning (S&OP) are two of the most underappreciated disciplines of modern corporate management. Properly applied, they can improve performance and competitiveness by increasing customer satisfaction and reducing costs. A combination of more capable information technology with advances in operations research and analytics has made managing supply and demand chains potentially more impactful by making them more flexible and adaptable to market conditions. Consequently, companies can enhance profitability, reduce working capital and improve customer satisfaction by providing more reliable service.
Supply and demand chain planning and execution have grown in importance over the past decade as companies have recognized that software can meaningfully enhance their competitiveness and improve their financial performance. Sales and operations planning (S&OP) is an integrated business management process first developed in the 1980s aimed at achieving better alignment and synchronization between the supply chain, production and sales functions. A properly implemented S&OP process routinely reviews customer demand and supply resources and “replans” quantitatively across an agreed rolling horizon. The replanning process focuses on changes from the previously agreed sales and operations plan; while it helps the management team understand how the company achieved its current level of performance, its primary focus is on future actions and anticipated results. Adoption of S&OP has increased as software to support the process has become more powerful and affordable and as a growing list of companies demonstrated its value in producing meaningfully improved business results. Even without adopting a full-scale S&OP management approach, companies can benefit from better coordination and collaboration between their supply and demand functions. Software plays an important role here, too, in facilitating this coordination and collaboration.
Topics: Planning, SaaS, Sales, Forecast, Mobile Technology, Operational Performance Management (OPM), Human Capital, Supply Chain Planning, Analytics, Business Analytics, Business Collaboration, Cloud Computing, Business Performance Management (BPM), Financial Performance Management (FPM), Sales Performance Management (SPM), Sales Planning, Supply Chain, Supply Chain Performance Management (SCPM), Demand Chain, Integrated Business Planning, SCM Demand Planning, S&OP