Essay on Sales And Operations Planning Definition
Today’s competitive business environment in conjunction with the global economic crisis calls for effective solutions in the day-to-day business operational framework. Especially, when it comes to small to medium manufacturing enterprises (SMEs), the challenge of decreasing costs while improving the customer satisfaction demands a solid answer in order for the firms’ sustainable future (Christopher, 2011) (Thome, et al., 2014). These challenges force the companies to improve their operations by implementing an integrated supply chain management (Thome, et al., 2014).
An effective practice of responding in the aforementioned issues is the sales and operations planning process (S&OP). The supply chain related risks, which threaten the firms’ profitability and improvement, bring to the forefront the necessity of S&OP process (APICS & Protiviti, 2011). It is characterised as the foundation of supply chain management (SCM) because it enables both the vertical integration and the coordination of all the SC tiers (Wang, et al., 2012).
According to Boyer J. (2009), S&OP is “a top management’s handle on business which requires balancing demand and supply on a regular and formal basis”. It is a cross-departmental (sales, marketing, manufacturing, suppliers, financial) ongoing planning procedure that unifies the sales and the operational planning in order to balance the customers’ demand with the firm’s resources (Thome, et al., 2012)…