Sales and Operation Planning (S&OP) and Sales and Operations Execution (S&OE) are two key factors that decide the operational excellence of any business. Supply chain leaders need to understand the importance of execution and its role in improving their business planning and optimizing costs. It acts as a medium to receive data information and interpret it to forward it to different levels of operations and strategy. This blog will discuss the S&OE and its role in enhancing the entire supply chain network.
What is Sales and Operations Execution (S&OE)?
S&OE stands for Sales and Operations Execution which is a weekly multistep process that includes subprocesses and steps that run in parallel and are aligned with the financial goals. These include demand review, inventory planning, and demand gap reconciliation. S&OE has a more granular tactical horizon of 0-12 weeks as compared to S&OP, which has a strategic horizon of 3 to 18 months. S&OE allows supply chain planners to make last-minute changes to adapt to unplanned exceptions without impacting a specific SKU.
Why Are Sales and Operations Execution (S&OE) Important to Your Business?
Most supply chain disruptions in every business come from shortages, delays, and product shortfalls. No matter how robust the planning process is, there are always possibilities for random disturbances, and sales and operations execution can help mitigate those exceptions without delay. The success of any planning depends on how fast supply chain teams adapt and mitigate the interruptions and their impact on customers.
As businesses are migrating towards automating their S&OE, there is a need for advanced analytics that can process past data to predict where the supply chain may face problems and propose the most feasible ways to mitigate those disruptions.
What Are the Steps of the S&OE Process?
When S&OE is aligned with S&OP, it enhances interdepartmental collaboration leading to more informed decision-making. The goal of the sales and operations execution process should be to create an end-to-end workflow to realize the business plan.
The first step toward designing the process is to define the requirements, data hierarchy, inputs, and output. Additionally, the scope of execution is also essential to define. Once the requirements are defined, the next step is to design the procedure. When it comes to an effective S&OE, there must be at least one weekly meeting to review the performance and decide on the tasks to execute the plan. This means the involvement of the right people who can provide the insights and visibility where it is required.
Another factor that impacts the success of the entire S&OE process is using correct supply chain management solutions that use advanced technology such as AI and ML for data analysis and decision-making. It focuses on identifying deviations that require immediate action. This way, the supply chain executives can have the flexibility to deal with issues without any delay.
What Are the S&OE Best Practices?
Execution can only be successful if businesses can deploy advanced solutions and harness the power of technologies such as machine learning and artificial intelligence. Here are some of the best practices for successful and efficient S&OE.
Single Source of Data: S&OE processes are as efficient as the accuracy of the data used for designing the model. It is important to start tracking the vulnerabilities and make them visible. Unplanned exceptions can be introduced into an organization from a variety of channels. Companies need to develop centralized incident tracking so that these disruptions are noticed.
Foster a Collaborative Work Environment: In projects and initiatives requiring coordination among different departments, accountability and information sharing need to be clarified. Lack of which can lead to the failure of the initiatives. The virtual center of excellence can help focus on the execution problems throughout the supply chain, including inventory, sourcing, logistics, and manufacturing.
S&OE Drumbeat: It is essential to have a monthly drumbeat meeting to derive insights from the execution and how it is aligned with the planning process. This drumbeat helps place a correct model in working, leading to incident resolution and continuous evolvement.
Fulfill Your Sales and Operations Execution (S&OE) Potential with 3SC
3SC is a leader in the field of supply chain technology solutions offering a range of intelligent and agile supply chain planning and analytics platforms. Our Risk Management & Digital Twin module manages sales and operations execution that helps assess the possibility of disruptions and provides insights into ensuring the best possible ways to mitigate them. It uses complex AI-based algorithms to analyze complex databases and predict disruption so that planners can take appropriate steps on time. To learn more about 3SC’s S&OE, contact us today.