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What Should Your Sales and Operations Planning Software Actually Do?
What Should Your Sales and Operations Planning Software Actually Do?

May 29, 2023

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If you want to provide an outstanding customer experience and create a quality product, then your business processes should be like a finely tuned machine so that every step, from manufacturing to delivery, is well executed. 

These processes are very important for your business to excel for a longer period, and sales and operations planning software is the key to all your business optimization requirements. But what should your S&OP solution actually do? 

Demand and supply represent two of the most basic business concepts that we have, and still, getting both in line is one of the most challenging tasks a business can have. Even well-established and successful company also faces these hurdles every now and then. 

What is S&OP? 

Sales and operations planning (S&OP) is a process that businesses use to make sure that they have enough inventory available according to the demand. Having the right amount of inventory is very important for any business. This way, they don’t run out of stock or overstock a product that takes up precious warehouse space. 

The S&OP is a cyclical process, which repeats monthly or quarterly depending on how far the company is able to forecast. Some companies’ products have a year-round demand, whereas some companies essentially need S&OP solutions because of seasonality, perishability, and highly trend-specific products. 

How should S&OP software perform? 

Usually, planners are always looking for the best possible solution to the complexity of their sales planning. But what should an effective S&OP software perform for optimum results? What built-in feature should it have to support businesses that need to transform complex historical data and real-time production requirements into solid, concrete plans? The answer depends upon the exact specifications and details of your business, but there are some touch points we can discuss here: 

Forecasting  

The crucial part of the S&OP process is forecasting customers demand for the upcoming quarter. In other words, your S&OP is only as valuable as your future predictions. You can see the world’s most valuable meeting plans. But, if you miss out just a little on your future demand, then you are going to be stuck with a large-scale shortage or unwanted capital commitment. Forecasting is one of the most important key features that any S&OP software should have. 

Detailed Planning 

Once you figure out your demand forecasting, then you can actually start comparing your demand and supply ratio. This approach requires gaining a thorough understanding of your actual capacity and production flow down to the parts level. Generally, your S&OP software would be able to provide the visualized format of how differently the hypothetical orders will translate into individual production sequences and bills of materials. In this way, you can successfully merge your high-level production planning and inventory management. With this much accurate detailing, it's easy to start extending your visibility to other various areas of your business, like logistics planning. 

Dashboards and reporting  

Certainly, to gain an advantage from centralized information, you need to be able to access this information in a user-friendly format. This means that state-of-the-art features that can be easily understandable like monitoring and reporting are actually very critical for getting the most out of your S&OP software. In real-time, you need to be able to observe what’s happening in your supply chain, how one product or various products are responding to current trends, and how frequently the demand indicators are changing. Dashboard and reporting tools help you evaluate relevant planning parameters and forecasting. 

Order generation  

A truly sophisticated sales and operations planning software will give you the ability to create orders before customers have actually made them, then populate them with actual orders as they come into existence in the future. This means that you can have a proactive approach to your supply chain system and inventory management. This software enables you to observe customer behavior on the level of individually planned orders. Not only does this helps you to reduce your processing time, but it also makes it much easier to visualize your capacity in terms of actual production sequences and ratios, providing you with a single point of view to make any adjustments in order to keep your business on track. 

Interoperability  

With all the features mentioned above, it may seem like a lot to manage for your supply chain requirements. And it will be. That’s why your sales and operations planning system must have interoperability. This feature will ensure that your planning and operating system can connect with each other at any point in time to exchange information successfully to yield optimal results. For complete visibility, you need solutions that will connect each software used by your organization all the way to the bottom line – an essential aspect of integrated planning. 

 

There are so many aspects of your business that will get stronger as you use sales and operations planning tools. 

 


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Karishma Shikalgar
Marketing Manager

Avercast LLC is an industry-leading supply chain management company that integrates 250+ advanced forecasting algorithms.

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