What is sales and operations planning?

In business management, sales and operation planning (S&P), also called aggregated planning, it concerns regular meetings that have executive managers, during which they review projection for supply and demand and discuss how their company would affect. During the meeting with the OP, they also decide to ensure that all tactical and short -term plans are in line with their total business plans and policies. At the end of S&P, they come up with the final output, which is an operating plan. This determines how all the sources of society, including human resources, money and time will be allocated.

In other words, sales and operation planning and operations are determined by the required level of production or production. This ensures that sales goals and predictions are met. While it will consider, executive managers also mean general goals such as profitability and competitiveness of their trading company.

Sales and pepping benefits can accept one of two approaches: planning withmountain down or planning from bottom to top. Planning from top to bottom is a simpler approach because it focuses on a single sales forecast and uses it to keep all subsequent planning. Meanwhile, the bottom -up planning is more suitable for companies with variable production results and, as a result, does not have definitive sales predictions. Instead of sales forecasts, resources for all products are calculated and from there they come up with overall resource requirements.

After identifying the total sales forecast or setting requirements for resources, the next step in sales and operations is usually the creation of a production plan. Again, this can be done in different ways using different approaches. Usually a level or chase methodology is used, or a combination of these two.

At the level of production plan is access to Keep produces more or less constant rate as before and use inventory to take a difference between forecastsand necessary production activities. In the plan of pursuit production, the opposite is followed; Production changes to match the sales forecast. In other words, production chases demand. Of course, between the production plan and the production plan of persecution is middle soil. This is a combined approach where it is possible to change both to production and inventory as needed to meet the desired goals.

All these are performed when planning sales and operations. Final outputs, in addition to the operating plan, may include updated production and sales plans, stock plan, new product development plan and many other key documents. This allows the company to set the focus, harmonization and harmonization of all efforts from its different departments.