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Sales and Operations Planning is a critical component in supply chain management. It is one of the factors that enhance key communication, especially in top-level management, to ease coordination for planning activities. The Sales and Operations Planning function needs to be clearly communicated, streamlined and incorporated in all levels of functions to enhance effectiveness. Check out the various top benefits of Sales and Operations Planning that can help revolutionize your business or company.
For one, Sales and Operations Planning ensures that the battle over the ownership of the finished products inventory. Sales and Operations Planning needs to be properly incorporated and implemented in top management to enhance visibility, especially in matters sales, production, marketing as well as finances. Sales and Operations Planning helps in the management of interactions among these aspects. In the manufacturing process, Sales and Operations Planning assists in doing away with any battle regarding ownership of the finished goods. In case the actual inventory doesn’t match with the planned one, then it doesn’t become a manufacturing issue. The issues could be in sales or even in marketing.
Sales and Operations Planning also helps to ensure that there is enhanced integration among the various functions. Enhanced integration among these functional areas is such a huge benefit that comes as a result of effective Sales and Operations Planning. As mentioned earlier, however, it is vital and paramount that there are effective communication and collaboration in top-level management. In the end, there are achievements in transparency and even better communication and collaboration.
At the same time, when there is effective Sales and Operations Planning, you do not have to worry about issues such as panicked rushing. Even without Sales and Operations Planning, there is the expectation that the job must be done. However, although it gets done, it comes with a price. Unfortunately, the price could be organizational slack, excess inventory, as well as panicked operations. As well, you could be experiencing excess capacity and poor customer service. At the same time, annual budgets could be inconsistent and not tied to a detailed plan. With effective Sales and Operations Planning, all these issues and problems are eliminated.
Sales and Operations Planning also helps in shaping demand in your company. When the demand planners know about sales the production capacity and also inventory, it becomes quite easy to approximate and figure out the profit margins for the products. For instance, you can identify when supply is not sufficient enough to meet demand; then the same can be easily communicated to the sales and marketing department. Well, there are so many ways that Sales and Operations Planning can help to shape demand. This, however, only happens with collaboration between sales, production and marketing departments.
Top management, however, should be entirely committed to the Sales and Operations Planning process for effective results. Sales and Operations Planning should still be incorporated into strategic planning. Thus, it is vital to invest in Sales and Operations Planning for its benefits in the company even in the long run.