Set clear planning objectives

Set clear planning objectives and determine which decisions to make is the first step in 13 steps to a solid and successful sales and operations planning. Academic director Freek Aertsen about the key drivers and key questions that are a basic starting point for designing the planning process.

The level at which decisions are made (strategic, tactical, operational) determines the   way that the forecasting and planning process is organized. The throughput times of planning processes in many industries, including medical devices, have to be restricted to an absolute minimum. At the same time, key value drivers should be managed in an interdisciplinary way. Companies should therefore define key drivers as a basic starting point for designing the planning process.

Key questions to be addressed are:

• What decisions have to be made?
• Where will these decisions be taken?
• What information is required to make these decisions?
• Who is doing what and when?

The decision-making structure should be formalized in a cross- functional meeting.

First and foremost, the information required for decision making at consensus meetings needs to be identified. Second, the information source needs to be determined, as well as the person(s) responsible for maintaining the information. Key in this is that only one person is responsible for each data element.

Assign roles and responsibilities, and clearly communicate these to all parties. Accountability leads to increased sales-forecast commitment.

Planning meetings often become discussions about data and its validity, so automate as much as possible. Make sure that data collection is final and complete when decision-making starts, which should be as close as possible to the moment of the decision-making meeting.

When it is known what decisions need to be made, the source of the information and who is assigned to provide it, the detailed process can be designed.

Short planning cycles can only be established when a strict planning calendar is prepared for all activities. This should be adhered to and compliance measured. The effectiveness and value add of every activity should be evaluated in a Plan-Do-Check-Act (PDCA) cycle to drive continuous improvement.

Aggregated planning

For mid-to-long-term decisions, not as much detailed information is required as for the short term, so it is important to aggregate the planning where possible. This is possible within most organizations when the mid-to-long-term decisions are not related to information at SKU (stock keeping unit) level. This gives a number of benefits that translate into a more efficient process:

• Improved long-term forecastability.
• Better alignment with business processes.
• Reduced effort and increased focus for sales & marketing.
• Less data to manage.

First article in a series about sales and operations planning (S&OP)
Today, S&OP is considered as being the key means to execute corporate strategy. A successful S&OP process aligns an organization strategically to execute tactically. The implementation of the S&OP process requires changes to processes, organizations and systems.13 building blocks are identified that compresses the path for companies towards achieving game-changing benefits by following a step-by-step approach to S&OP success.

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