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<p>If the consumer has not bought it, nobody has sold it. They are responsible for moving the flow among manufacturers, retailers, and raw material suppliers. But for the entire supply chain to move towards ensuring the availability of products on the shelf for sale, this requires, among other factors, to have <a style="color: rgb(82, 139, 196);" rel="noopener noreferrer" href="https://neogrid.com/en/blog/seop-step-by-step-how-to-adopt">S&amp;OP (Sales and operations planning)</a>.</p><p>This process helps to structure a single, integrated strategy for the company, aligning business plans &amp; production and distribution capacity plans. Ignoring it, or doing it inconsistently, can cause negative impacts for other agents in the chain and for the manufacturer. Among the negative impacts include but are not limited to improper <a style="color: rgb(82, 139, 196);" rel="noopener noreferrer" href="https://neogrid.com/en/blog/inventory-replenishment-system-how-it-works">inventory levels</a> to serve its customers (retailers, other manufacturers, and distributors), the loss of market share and even full unfeasibility of the business.</p><h2><strong>Challenges of the sales and operations planning process</strong></h2><p>Therefore, areas involved in S&amp;OP – marketing, trade marketing, commercial, operations, logistics, finance, among others – must be aware of the need to pay attention to this process, which brings two major challenges:</p><h3><strong>ERP integrated software</strong></h3><p>If the company does not have an S&amp;OP software integrated with the ERP (business management system), it will face some difficulties. The first is the need to have several people on the team to compile information that comes from different sources: sales, marketing, the company's own history records. They will be required to work on calculations and breakdowns on heavy spreadsheets and be subjected to errors or rework when consolidating different documents. In addition to the risk of not keeping this data in a secure place, like the computer itself. If the equipment crashes, all work could be lost.</p><p>Without the support of an accurate planning solution, there is too much operational work to reach precision. The <strong>level of complexity for the sales and operations planning professional</strong> only increases as many actors from different areas are involved and as the product mix increases. Thus, the tendency to error is greater.</p><h3><strong>Collaborative integration of company areas</strong></h3><p>Collaboration among the areas involved in <strong>sales and operations planning</strong> is essential for the process to work. If the end consumer demands for a specific item and the manufacturer is 10,000 items - considering the distribution to all retailers it serves - the commercial area must inform this sales forecast to the area responsible for operations and purchases of raw materials to ensure proper production levels.</p><p>The entire team must be on the “same page”, everyone with a vision of the same goal. Otherwise, the company can pay a high price, as improper sizing of inventories to serve customers and, consequently, compromised service levels, cause increased costs and lower profitability.</p><p>By overcoming these challenges, the company will have more accurate forecasts and will be able to align decisions and actions to be implemented in accordance with the company's collective goals. In addition, it can secure improvements in terms of cost (inventory and production levels) and service (product availability), anticipating its needs and restrictions.</p><h2><strong>How technology works in the S&amp;OP process</strong></h2><p>An S&amp;OP solution has three fundamental pillars that are connected: <a style="color: rgb(82, 139, 196);" rel="noopener noreferrer" href="https://neogrid.com/en/blog/statistical-method-applies-supply-chain">Statistical Forecasting</a>, Event Management and Collaboration. Let's understand each item.</p><h3><strong>Statistical Forecasting</strong></h3><p>It is used as input to the S&amp;OP process. Based on sales history records, the solution identifies outliers, trends, and seasonality to project a future demand scenario using mathematical models.</p><h3><strong>Event Management</strong></h3><p>It enables planning to be strengthened with what we call “market intelligence”, that is, any event that may impact demand or had an impact on demand, such as promotions, price actions, product launches, competitive actions.</p><h3><strong>Collaboration</strong></h3><p>It is the key factor in improving the company's planning process and demand plan. It is essential to seek a solution that enables this collaboration through workflows in order to facilitate and monitor the participation of all parties involved in the S&amp;OP process.</p><p>An integrated S&amp;OP solution must provide the tools and mandatory processes to conduct collaborative, comprehensive and accurate demand planning. It must provide all the necessary data in one place and easy access, while ensuring that everyone has the same objective and information. The components of statistical forecasting and event management (information on markets, promotions, and special events) must be reliable and robust to avoid product excesses and shortages.</p><p>If the supply chain starts in <strong>sales and operations planning</strong>, it is always important to remember that it must be performed based on the last stage of the chain: sell-out. Because if the end consumer has not bought it, no sale has been made.</p><p>Follow our blog and learn more about the S&amp;OP process and other supply chain topics.</p>

<p>If the consumer has not bought it, nobody has sold it. They are responsible for moving the flow among manufacturers, retailers, and raw material suppliers. But for the entire supply chain to move towards ensuring the availability of products on the shelf for sale, this requires, among other factors, to have <a style="color: rgb(82, 139, 196);" target="_blank" rel="noopener noreferrer" href="https://neogrid.com/en/blog/seop-step-by-step-how-to-adopt">S&amp;OP (Sales and operations planning)</a>.</p><p>This process helps to structure a single, integrated strategy for the company, aligning business plans &amp; production and distribution capacity plans. Ignoring it, or doing it inconsistently, can cause negative impacts for other agents in the chain and for the manufacturer. Among the negative impacts include but are not limited to improper <a style="color: rgb(82, 139, 196);" target="_blank" rel="noopener noreferrer" href="https://neogrid.com/en/blog/inventory-replenishment-system-how-it-works">inventory levels</a> to serve its customers (retailers, other manufacturers, and distributors), the loss of market share and even full unfeasibility of the business.</p><h2><strong>Challenges of the sales and operations planning process</strong></h2><p>Therefore, areas involved in S&amp;OP – marketing, trade marketing, commercial, operations, logistics, finance, among others – must be aware of the need to pay attention to this process, which brings two major challenges:</p><h3><strong>ERP integrated software</strong></h3><p>If the company does not have an S&amp;OP software integrated with the ERP (business management system), it will face some difficulties. The first is the need to have several people on the team to compile information that comes from different sources: sales, marketing, the company's own history records. They will be required to work on calculations and breakdowns on heavy spreadsheets and be subjected to errors or rework when consolidating different documents. In addition to the risk of not keeping this data in a secure place, like the computer itself. If the equipment crashes, all work could be lost.</p><p>Without the support of an accurate planning solution, there is too much operational work to reach precision. The <strong>level of complexity for the sales and operations planning professional</strong> only increases as many actors from different areas are involved and as the product mix increases. Thus, the tendency to error is greater.</p><h3><strong>Collaborative integration of company areas</strong></h3><p>Collaboration among the areas involved in <strong>sales and operations planning</strong> is essential for the process to work. If the end consumer demands for a specific item and the manufacturer is 10,000 items - considering the distribution to all retailers it serves - the commercial area must inform this sales forecast to the area responsible for operations and purchases of raw materials to ensure proper production levels.</p><p>The entire team must be on the “same page”, everyone with a vision of the same goal. Otherwise, the company can pay a high price, as improper sizing of inventories to serve customers and, consequently, compromised service levels, cause increased costs and lower profitability.</p><p>By overcoming these challenges, the company will have more accurate forecasts and will be able to align decisions and actions to be implemented in accordance with the company's collective goals. In addition, it can secure improvements in terms of cost (inventory and production levels) and service (product availability), anticipating its needs and restrictions.</p><h2><strong>How technology works in the S&amp;OP process</strong></h2><p>An S&amp;OP solution has three fundamental pillars that are connected: <a style="color: rgb(82, 139, 196);" target="_blank" rel="noopener noreferrer" href="https://neogrid.com/en/blog/statistical-method-applies-supply-chain">Statistical Forecasting</a>, Event Management and Collaboration. Let's understand each item.</p><h3><strong>Statistical Forecasting</strong></h3><p>It is used as input to the S&amp;OP process. Based on sales history records, the solution identifies outliers, trends, and seasonality to project a future demand scenario using mathematical models.</p><h3><strong>Event Management</strong></h3><p>It enables planning to be strengthened with what we call “market intelligence”, that is, any event that may impact demand or had an impact on demand, such as promotions, price actions, product launches, competitive actions.</p><h3><strong>Collaboration</strong></h3><p>It is the key factor in improving the company's planning process and demand plan. It is essential to seek a solution that enables this collaboration through workflows in order to facilitate and monitor the participation of all parties involved in the S&amp;OP process.</p><p>An integrated S&amp;OP solution must provide the tools and mandatory processes to conduct collaborative, comprehensive and accurate demand planning. It must provide all the necessary data in one place and easy access, while ensuring that everyone has the same objective and information. The components of statistical forecasting and event management (information on markets, promotions, and special events) must be reliable and robust to avoid product excesses and shortages.</p><p>If the supply chain starts in <strong>sales and operations planning</strong>, it is always important to remember that it must be performed based on the last stage of the chain: sell-out. Because if the end consumer has not bought it, no sale has been made.</p><p>Follow our blog and learn more about the S&amp;OP process and other supply chain topics.</p>

To ensure the right products are on the shelves, manufacturers must, among other factors, rely on sales and operations planning. Understand the concept!

Sales and operations planning: the first step to serving the end consumer

To ensure the right products are on the shelves, manufacturers must, among other factors, rely on sales and operations planning. Understand the concept!

Do you want to learn more?

These posts can complete this reading

The recipe for a successful sales forecast

S&OP step-by-step: how to adopt this method in your company

Statistical method: What it is and how it applies to the supply chain