Sales and Operations Planning Flashcards

Terms Definitions
What is S&OP?
A business process that helps companies keep demand and supply in balance. It does that by focusing on aggregate volumes (product families and groups) so that mix issues (individual products and customers) can be handle more readily.
What is APICS definition of S&OP?
APICS defines S&OP as the "function of setting the overall level of manufacturing output (production plan) and other activities to best satisfy the current planned levels of sales (sales plan and/or forecasts), while meeting general business objectives of profitability, productivity, competitive customer lead times, etc., as expressed in the overall business plan.
What is demand?
What customers (internal / external) want
What are the consequences of a Supply/Demand imbalance
If demand goes up, out of control: cost increases, quality and delivery decrease. If supply goes up, out of control: Inventory increases, productivity and margins decrease.
What is VOLUME?
The BIG PICTURE: how much/rates/product families
What is MIX?
The details: which ones? / Sequence / individual products and customer orders
What top management brings to the S&OP process?
Stewardship (top management own the financial plan and S&OP decisions usually affect the plan) and leadership (by getting involved they are showing the other parts of the organization that this is how they expect them to interact)
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