Why Sales and Operations Planning is Critical During Covid-19
All business has been affected by the current pandemic. There have been those who have closed down and stopped trading altogether. Others have moved their business to online only, and there are those who have been able to adapt and improve what they do to be able to increase sales and maximize profits even in the current economic slowdown. The key deciding factor as to how business has been able to cope has been the different sales and operational planning (S&OP) strategies implemented out there.
What is S&OP?
Sales and operational planning is a business process used to align all functions across the business. All business segments or departments, no matter how large or small, must be on the same page, supporting the flexibility and adjustments that are required to meet the strategic plan, but also to maintain quality and the requisite level of customers. The idea is to be clear about your sales predictions and changes in demand and then communicate these through to operations. All feedback from customers and clients must be fed back in a looped system, and all business departments are seen as functions of the whole.
How COVID-19 has Affected Sales and Strategic Planning
COVID-19 has caused a great deal of uncertainty, which has adversely affected businesses out there. Shopping habits and methods have changed, and the type of services required by both businesses and individual households is changing. Without a detailed understanding of the sales and operations process of your business, you will be unable to make use of any efficiencies to increase sales or limit and deal with any inefficiencies in the system.
Why Your Business Needs Professional S&OP to Compete
A clear, concise strategic plan, with actionable components for each section of the business, is an essential part of any business. Included in the strategic planning is the sales and marketing planning as well as the production planning.
The traditionalist view of business has always been to meet demand; if people out there want your product or service, then you should ensure never to run out and keep the factory working to meet the demand. Current S&OP is somewhat different in that, yes, operational capacity must be optimized, but it is about balancing the demand with the real capacity.
One of the main causes of failure of small businesses is overreaching, trying to grow too big before they can manage this growth, and striving to do too much to sell faster than they can ensure quality products. A clear S&OP ensures that this can never be the case, in that you only produce what you can, at the right level of quality, to fulfill a pre-determined order number.
The benefits of sales and operations planning are obvious, and yet all business people know that even such a plan must be flexible to deal with ever-changing business contexts. The idea of having a clear plan with a strategy while allowing for clarity and a clear next step allows for the ability to quickly change targets and operations. This flexibility comes only with the availability of knowledge and an intrinsic understanding of the sales and operations plan.
As a business trying to make it through these tough times, it will be critical that you have the right information at your fingertips. A sales and operational plan is a vital piece of this information puzzle if you are to succeed in an uncertain business world.
