What is SIOP?
“S&OP” stands for Sales and Operations Planning. Depending on the industry or organization, you may also hear it referred to as “SIOP” or Sales, Inventory, Operations Planning (SIOP). Sometimes, it is even referred to as “IBP” or Integrated Business Planning. Typically, they mean the same thing.
The most important words to emphasize are planning and alignment. In S&OP, the goal is to have Sales, Operation, R&D/ New Products & Finance, all planning together. The mission is to align a sales plan and the associated operations plans, to provide superior customer service and profitability.
How Do You Benefit from SIOP?
Sales & Marketing
Sales and Marketing leaders will gain high levels of service for their customers with on-time-in-full (OTIF) levels in the high 90’s, shorter lead-times, and high ratings on customer scorecards. They also will gain improved levels of responsiveness to customer needs and confidence in new product rollouts.
Engineering
For engineer-to-order (ETO) and configure-to-order (CTO) businesses, Engineering leaders will gain visibility into workload requirements to support drawings, customer approvals, and bill of material designs. They will be able to plan for the appropriate level of engineering capacity and capabilities.
Manufacturing
Manufacturing leaders will gain visibility into work center, machine, equipment, tooling, maintenance, staffing, and training requirements so that they can plan accordingly. They will also gain visibility into the master production schedule so that they can optimize run sizes with changeovers and costs.
Purchasing
Purchasing leaders will gain visibility into raw material, component, ingredient, and outside processing requirements so that they can work with suppliers to set up the appropriate programs and contracts to meet customer requirements. Suppliers will have visibility to capacity and scorecards.
Logistics
Logistics leaders will gain visibility into storage, warehousing, handling, picking, packing, shipping, transportation, returns, and equipment requirements so that they can plan accordingly. As gaps arise, service and cost options can be analyzed to expand capacity or capabilities as needed to support customers.
Finance
Finance leaders will gain visibility into sales forecasts, engineering and manufacturing plans, capital expenditure needs, purchase forecasts, staffing and support resource requirements, logistics forecasts, and inventory projections. Thus, they will have revenue, cost, profitability, and cash flow projections.
Planning
Planning leaders will gain visibility into the demand plan, sales orders, quotes, replenishment orders, and work order status so that they can develop the best master production schedule (MPS) to optimize customer service, operational efficiency and working capital. They will gain high service levels and increased margins.
Q&A: Why Implement S&OP?
Are you interested in the answers to any of these questions?
- Are you concerned about inflationary pressures?
- Are you concerned that inventory levels and obsolete inventory reserves are increasing?
- Do you have customer profitability analysis and forecasts needed to prioritize customers?
- Are you struggling to keep up with customer orders?
- Will your sales and operations plan support your growth and profitability plans?
- Are Sales and Operations on the same page?
Read our Q&A on why implement SIOP.
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SIOP Accolades
Qualitative & Quantitative Results
Credibility and Trust
SIOP Success
Value Statement
Client Success Stories
We asked our clients about the results we achieved together.
Rick Moroski, Sr. VP and COO, SchenckProcess
Craig Young, Senior Director of Operation, Nellson Gallery
Kelly Ford, Aerospace Executive
Jim Cenname, President, US Aluminum
Blog Posts for SIOP
Turbulent times are upon us. According to Reuters reporting from the Bank of America, geopolitics has leapfrogged inflation as the most significant risk to the market, and that was proven true as the market slumped with the expectation of Iran’s attack on Israel.
The supply chain is in a constant state of disruption. As we discussed on Supply Chain Chats, simple backup plans are no longer enough. In fact, you can look at recent events and determine if a backup is sufficient. Starting with the pandemic, of course, most if not all companies didn’t have a sufficient enough backup plan.
Clients are struggling to keep up with customer’s changing requests. Order backlogs remain relatively high (depending on the industry), but customers are pushing orders out at the last minute, pulling orders in without notice, adding future potential orders, and changing requirements on the fly. Production is scrambling to keep up.
Complimentary Discussion on SIOP Readiness
