SIOP (Sales, Inventory & Operational Planning) is a consensus-based, regular process that is designed to integrate various stakeholders within the company, including sales, marketing, inventory control, production, materials, and finance with rapid "what-if" analysis and scenario management. SIOP creates a rigorous process for getting sales, marketing and supply chain all on the same page to allow companies to plan more effectively, identify bottleneck/constraints, and smooth out factories’ loads while maintaining a high level of service.
Key Questions
- How will an update of the sales forecast impact key operating metrics?
- For the given forecast, what actions should be taken to improve the supply chain performance?
- What are the projected financials by month / quarter / year?
- How does actual performance compare against as planned?
- What actions should be taken if customer requirements change?
SIOP and SimFlex
SimFlex can be used for maintaining a status quo “model” of the existing supply chain including suppliers, manufacturing sites, logistics centers and customers in different geographies. An update of the sales forecast triggers a new SIOP analysis, which projects future performance within the current framework. Although some elements in the chain are fixed, others can be adjusted to carry out “what-if” analyses.