From the course: Supply Chain and Operations Management Tips

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Use sales and operations planning (S&OP)

Use sales and operations planning (S&OP)

From the course: Supply Chain and Operations Management Tips

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Use sales and operations planning (S&OP)

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- Supply chain management is full of trade-offs, and one of the most challenging is the balance between inventory and customer service levels. This really boils down to aligning supply with demand. In this video we'll look at a process called sales and operations planning, or S&OP. Many companies use S&OP as a foundation for aligning supply and demand in their supply chains. Your sales department drives the demand for your company. If your sales department is like most, they want to have a live selection of products to sell, and they want to keep all of them in stock. On the other hand, your operations team is in charge of supply. Operations is pushing to reduce inventories so they can free up working capital and increase the profitability of your company. These business goals are actually in conflict. How do you know that you're buying and making the right amount of products to meets your customers' needs but no more? That's where S&OP comes in. First, you need to decide how far in…

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