Implementing a rock-solid Sales and Operations Planning (S&OP) process is key to your company’s growth. But it can be hard in practice to make sure your sales and marketing teams are on the same page as your operational teams. To set you up for success, keep in mind the following key things your S&OP process needs to address.
1. Are you targeting the right customers?
While any sale can be considered a positive for the business, not all sales are equal. What’s more, businesses nowadays can’t sit back and wait for customers to find them. They have to create demand for their products. So it’s important to ensure your S&OP processes are targeting the right potential customers — that is, those that will provide a high ROI in terms of their lifetime value and in terms of their ability to further influence demand.
2. Are you optimizing your cash flow?
No matter how complex your business processes get, it’s important to remember that cash is king. Your year-to-date revenue may be high, but if your short-term expenditures outpace your monthly revenue, you could be headed for trouble. From buying inventory from suppliers to paying your employees on time, cash flow problems can bring the day-to-day operations of your entire supply chain to a grinding halt. Make sure your S&OP process is designed to optimize your cash flow to stop potential problems from becoming major showstoppers.
3. Is your process contributing to your company’s profitability goals?
Your S&OP process is meant to eliminate friction between the departments driving demand and those satisfying that demand. This, in turn, is meant to decrease unnecessary costs and make your company more profitable overall. Make sure your S&OP process isn’t sabotaging that effort by taking a critical look at what your current S&OP process is costing you. If you’re hemorrhaging money, look at ways to automate tasks and eliminate redundancies.
4. Are you measuring whether you succeeded (or failed) at hitting your targets?
From forecast accuracy metrics to sales targets to the number of unique visitors your website attracts, there are plenty of ways to track each department’s success (or failure) rate. But the whole can sometimes be greater (or less) than its parts. Your individual departments and teams may be excelling, yet your S&OP process may still fall short. So remember to zoom out and look at the big picture. Establish high-level key performance indicators (KPIs) that measure the overall performance of your S&OP process.
In order to make sure you’re answering “YES” to all four of these key questions — and doing so with confidence and the data to back your answers up — having the right technology is crucial. Our Atlas Planning Suite has the tools you need to align key stakeholders on business objectives and to consistently carry your S&OP processes out, therefore ensuring growth. Schedule a consultation with one of our Forecast Xperts today to learn more.
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