You’d think an operationally focused industry like the aggregates business would also be planning focused, but you’d be wrong. Organisations in the industry are particularly bad at sales and operations planning (S&OP), but it’s hardly surprising as most would rather be in the quarry making products, or out in the market selling them.
However, S&OP is the key to market success; it is essentially about matching supply with demand to reduce uncertainty. It’s only when you take the time to consider the pitfalls of not doing S&OP well, that you realise the serious impact it can have on your business in terms of reduced value due to high stock levels, unhappy investors, increased by-product waste, missed higher pricing and lost market opportunities.
So, how to prevent planning to fail? Firstly, gain a thorough knowledge of your customer and market to aid sales forecasting, make the forecast a key part of the business routine and cycle, then establish a robust and reliable forecasting process using a diverse range of independent thinkers. It’s important to remember, however, that you will never be 100 per cent accurate – but that’s not an excuse not to bother.
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