Introduction
Sales and Operations Planning (S&OP) is the backbone of strategic decision-making within organizations, aligning sales, marketing, finance, and operations to achieve business objectives. However, the dynamic nature of modern markets demands a complementary process that bridges the gap between strategic planning and operational agility. Sales and Operations Execution (S&OE) addresses this need by providing the tactical precision and responsiveness required to manage short-term fluctuations and exceptions, ensuring alignment with long-term strategic goals while driving day-to-day performance.
Understanding S&OE
Unlike S&OP, which has a broader scope, S&OE focuses on the tactical aspects of planning, addressing short-term challenges and exceptions that arise within the monthly S&OP cadence. S&OE performs order-level planning and generates an accurate and executable plan at different operational levels, including network, supply chain, factory and equipment sequencing.
When is S&OE Needed?
S&OE becomes essential when exceptions disrupt the smooth flow of the S&OP process. These exceptions may include:
Uneven order patterns
Short lead times
Unforeseen disruptions impacting inventory levels and customer service
New item launches and product discontinuations
The inability to coordinate cross-functional stakeholders within a short timeframe can lead to chaos in the planning cycle. S&OE addresses these challenges by managing short-term demand fluctuations and operational constraints.
Integration with S&OP
While S&OE addresses short-term tactical planning, it is essential to integrate these discussions seamlessly with the broader S&OP process. By aligning short-term execution with long-term strategic objectives, organizations can achieve greater efficiency and agility in their planning processes.
Client Story
Rembrandt Foods: Bringing The Goodness of Eggs to the World
Rembrandt Foods is a global egg production and processing company that supplies egg ingredients to many food industries. They distribute products to 30 countries and supply clients which include food manufacturers, brand owners, food service industries, pet care manufacturers, restaurants, hotels, healthcare facilities, schools, and convenience stores.
We aimed to implement the S&OP process to align Demand and Supply Reviews with Rembrandt’s business objectives. Despite having an operations budget, sales operated independently due to pricing variability and contract complexities. This underscored the need for S&OE to react to short-term opportunities, leveraging manufacturing flexibility to enhance revenue and profit. S&OE helped Rembrandt manage short-term dynamics within a longer-term S&OP framework, delivering business benefits such as improved customer service and order fulfillment rates through better execution of production plans at the plant level.
Key Components of S&OE
Adaptability to Volatility: S&OE helps organizations adapt to volatility and reduce the impact of unplanned occurrences by providing the agility to adjust plans quickly in response to changing market conditions.
Short-Term Focus (One to Eight weeks): S&OE focuses on granular weekly tactical planning and execution, addressing scheduling, supply plan attainment, sales plan performance, inventory levels, capacity utilization, and financial performance.
Action-Oriented Digitized Approach: S&OE meetings are usually a weekly process (Gartner, 2023), centered around important decisions and issues, with pre-work on solutions done before the meeting. S&OE encourages digitizing reporting capabilities and using standard meeting views focus participants on single source of truth and actions.
Bottom-Up Planning: S&OE involves all contributors in the planning process, ensuring that everyone understands how their data contributes to the overall plan. This bottom-up approach fosters ownership and accountability among team members.
Conclusion
Sales and Operations Execution (S&OE) integrates tactical planning with the S&OP process, managing short-term disruptions while maintaining long-term goals. Weekly S&OE meetings ensure agility and alignment, driving business success. The need for S&OE varies by company and market conditions, requiring organizations to assess their specific integration needs.
Please visit our website www.ibp2.com, or email us contactus@ibp2.com with questions or a quick assessment of your S&OE/S&OP needs!
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