S&OP should focus more on how the company's existing capacity can meet long-term plans.
A robust and mature S&OP process is absolutely critical to improving operating performance in critical areas such as:
- Customer service
- Inventory management
- Capex efficiency
- Profitable revenue growth
- Technology and data
Companies that manage S&OP purely as a supply chain process are not seeing the bigger picture. Today's competitive market pressures require that S&OP focus less on yesterday's back order and more on how the company's existing capacity can meet long-term plans.
Integrated business and operations planning is a more comprehensive enterprise-wide process that allows companies to function across the business. Since S&OP is a sub-process within an integrated approach to business and operations planning, short-term tactical operating decisions are not sacrificed at the expense of long-term strategic planning.
An integrated approach establishes a new forum for decision-making that allows life sciences companies to focus on long-term strategy, while keeping more senior executives engaged in short-term and mid-term operating results.
Under an integrated model, the goal is to create a single plan that reflects both short-term and long-term objectives, one understood and agreed to by all critical functions.
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