It is Saturday night and the symphony orchestra - similar to how organizations work - is ready to give its best show. The musicians are dispersed ex professo in a certain place, each one with his score. There are the string instruments, there are the percussion instruments, further away are the brass instruments and further ahead are the wind instruments. 

At the head of the orchestra, the conductor with baton in hand is in charge of leading the musical ensemble to carry out the interpretive unity of the work. At the same time and almost naturally, it seeks to enhance the ability that each artist has to offer the public, achieving unsurpassed performance. The result? An exquisite staging.

This image that we have just told illustrates a little what happens in the field of organizations in relation to the lack of communication that exists between departmental areas. It is an everyday office situation that results in increased uncertainty, high probability of risks, loss of time and resources, as well as lack of commitment and clarity regarding objectives.

Alignment between departments is essential if a company wants to sell more. It is true that there are departments that need to be more united than others, but that does not mean that there should not be a joint organization if we talk about organizations. That is why said departmental alignment is nothing other than working together through a strategic alliance that allows the achievement of an established and shared goal.

Taking into account that situations like these have been developing since the beginnings of the first organizations, the wide diversity of systematic techniques that help simplify these problems is notable. In this sense, one of the most used today is the Sales and Operations Planning methodology. 

Sales and Operations Planning in organizations

It is a strategic planning methodology that aims to reconcile forecasts with financial and logistical requirements. This method arises in response to the communication between company departments. It works as a plan that involves all areas of the organizations and integrates their marketing plans within the supply chain management processes.

Sales and operations planning, also known as S&OP, has the mission of bringing order to the chaos of the market. It allows companies to be proactive, rather than reactive, to changes in the business environment. While many organizations continue to manage their sales and operations planning activities in a disorganized and disjointed manner, many others are turning to digitalization and seeing highly significant transformation and benefits as a result.

Why use this methodology?

About the benefits of its application in the world of organizations, we can mention some of them such as the fact that it improves transparency at the departmental and communication level. This is possible since it opens the possibility of creating a channel through a person responsible for coordinating processes who works with the work teams. 

In the decision-making processes it also has a positive impact because the participants have better information, through an economy of time and effort. Likewise, it improves task control, for the simple reason that this methodology uses a dashboard of indicators that crosses the operational areas and includes measurements of business results.

How Sales and Operations Planning works

A planning of this type has the peculiarity of being as solid as the components that make it up. One of the most important parts is the demand plan, which contains projected sales forecasts. For it to contain the necessary data and information, a series of key questions must be addressed such as: 

• What units will the demand plan reflect? The demand plan is normally executed in units. But specifically which ones? Boxes, weight, length?
• What is your organization's process for reporting this in a revenue forecast? Who will use that revenue forecast? 
• What will you use to measure and forecast shipping or order demand?

Although the process of sales planning and operations, within organizations, can differ greatly between the various sectors of the market, we bring you below a general and practical guide on the steps that cannot be missing in your implementation: 

1. Data collection/management: First, you must collect information on previous sales, analyze trends and then put together your corresponding forecasts. 
2. Demand planning:  validate forecasts, understand sources of demand, and review customer service policies. Train in promotion plans, unique events and launches of new products and clients.
3. Supply planning:  assess the ability to meet demand by reviewing available capacity, inventory, and scheduling of required operations. Establish inventory objectives and plan supply by load level and/or demand search.
4. Plan reconciliation (Pre S&OP):  unify supply and demand plans with the financial area.
5. Finalize and publish the S&OP:  finalize the plan and publish it for proper implementation.