Sales and Operations Planning (SOP): The Resurgence of a 40 Year Old Idea

The way it is being touted in the press you would think that the BI related Sales and Operations Planning (SOP) is the latest new approach to managing business performance. In fact SOP is close to a 40 year old business process that allows aggregate planning to be assessed and passed down to specific finished goods planned in manufacturing companies. The early forms used planning bills of material and rough cut profiles in Manufacturing Resource Planning (MRPII) systems to generate top down plans and bottom up assessment of performance. This along with excellent master scheduling business processes were best practices at the time.

The SOP process requires top executive agreement as to how to plan for and measure by category, product and/or resource. SOP’s success hinges on the ability of executives to work together on the process.

Business Intelligence Network Infrastructures (BINI) that enable cleansing, collection and presentation of information across multiple entities seems to be driving the resurgence of SOP as a corporate approach to managing multiple entities. Even so, the process works well for small single entity companies also.

Do you use SOP business processes? How do they differ from what I have described? What software technology assists you in enabling those processes?

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