Question

How does S and OP address the silo effect at the senior levels of the sales or marketing, operations and finance functions, and how can this effect organizational performance? (75 words)

Answer 1

Sales and operations planning (SOP) is a forecasting and planning tool used in businesses to enter sales forecast, specify inventory requirements and generate an operations plan. Silo effects in a business produce lack of communication and collaboration with other functional areas. S&OP addresses silo effects because the tool needs to be experienced in each department where they work other to revise a production plan, and crosses silos to operate in the different functional areas to build bridges and solve issues. S&OP generates several versions of a production plan based on different assumptions that concern the growth of an organization. In senior levels, organizations can properly align supply levels with demand levels and create unlimited opportunities to achieve profit margins whining using the cross-functional strategy. By using the two different types of planning (standard and flexible), organizations are able to be proactive with each other and reduce last minute shuffling—when there is confusion created by silos—in manufacturing and distribution processes. S&OP can affect organizational performance by aligning different functions in organizations. The senior r levels can achieve strategic business objectives and introduces collaboration—because S&OP is cross-functional—to improve organizational performance.