Sales and operations Planning (SOP) (including 4A)
5 important questions on Sales and operations Planning (SOP) (including 4A)
What's a Sales and Operations plan?
SOP provides a direct and consistent dialogue between manufacturing and top management as well as between manufacturing and the other business functions.
Requirements:
- Basis for consistency of the functional plans in a business is the resolution of broad trade offs at the top management level.
- Operations plan must be stated in commonly understood aggregated terms.
What are fundamentals in S&OP?
2. Supply
3. Volume
4. Mix
What's the role of top management in S&OP?
- Benefits of SOP is to be able to run the business with one set of numbers
- Management should lead the cultural change to make that happen
- Invest in management time in the SOP activity, but thereafter allow the company to be run by a separate performance measurement system or budget.
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