This strategy is greatest used for companies who both cannot maintain stock. Otherwise, to take action is extraordinarily costly, whereas modifications in production cost very little. OP provides the basis and justification for annual working budget requests.
It is an iterative process in which results from one planning cycle are in contrast with the following to provide administration with trend info from across the enterprise. Participants consider time-phased projections for supply and demand to ensure that the tactical plans in all business features and geographies align and support the company’s strategy. Identifying and solving any problems associated to realising plans or attaining targets is crucial to the S&OP process.