What is the purpose of S&OP and what takes place at the strategic, tactical, and detailed planning and control levels?
What will be an ideal response?
Answer: Sales and operations planning is a business process that helps the firm plan and coordinate operations and supply chain decisions over a tactical time horizon. The objective of this is to agree on a single operating plan that allocates critical resources of people, capacity, materials, time and money to most effectively meet the marketplace in a profitable way.
Strategic decisions are made on a long-term basis, much longer than S&OP can be done practically, however the process choice and market decisions made at this level will shape the firm's ability to generate and to meet demand. The tactical level, usually four months to a year out, is where workforce, inventory, subcontracting and logistics decisions are made. Planning numbers are aggregated month by month for the purpose of generating a sales and operations plan. Finally, the time period for the detailed planning and control level may be as short as hours or as long as weeks ahead. The planning done at this level may be as simplistic as which job to run next with the capacity that was provided by the tactical level planning.
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What will be an ideal response?
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