Wilfong Week 3 Sales and Operations Planning

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Running head: SALES AND OPERATIONS PLANNING 1 Sales and Operations Planning Daniel Wilfong Maryville University

SALES AND OPERATIONS PLANNING 2 Abstract The success of a supply chain is determined by the success of other departments. Two of those departments are sales and operations. The sales and operating departments each create a plan to help ensure the goals of the department and organization are met. But in order for the overall goals of the organization to be met the sales and operating team must share and align their plans with each department. If the plans are not aligned, this can cause issues for the organization and downstream issues in the supply chain. In order for success, collaboration and coordination are keys that the sales and operating teams are aligned.

SALES AND OPERATIONS PLANNING 3 Supply chain is a major function of most organizations. In order for the supply chain to be successful, the supply chain has to be an integrated function in the organization. By an integrated function, the supply chain and other parts of the organization must be connected and communicate with each other. Two of those functions are sales and operations. As part of the supply chain functions, sales and operations have to be connected and communicated with each and developing plans to meet demand and production. These two functions have to be involved and know each other’s plans as that can make each function successful, the supply chain successful, and the overall company successful. If the sales teams put together a sales plan that the operations team cannot meet, both teams will not be successful, and the company will struggle to meet demand and keep customers happy. Sales Planning Sales planning is a blueprint that sets specific sales goals for the business and helps the sales team achieve the goals. For a sales plan to be effective, the plan should include realistic goals, have tools to help track the progress and sales, future expectations, commission structure, and training programs to help the sales team. The keys steps to follow when developing a sales plan are to refer to overall business plan and goals, make sure the objectives are clear, use prior sales data to develop sales forecast, outline the commission structure for the sales team, and be clear about how progress is being measured so the teams understands how they will be measured (Veras, 2023) . In order for a plan and goal to be met, people have to buy in and be able to achieve it. If the sales team cannot achieve the plan and goals, the sales team will not even try. Also, providing a monetary incentive for the sales team helps to motivate them to achieve it. A sales plan is essential to support the growth of the organization. If the organization does not have a plan to grow their sales, it is going to be difficult for the organization to grow. Growing the sales in turns will grow the rest of the organization. The sales plan details the overall sales strategy of the organization which includes the revenue objectives and how the sales team will meet the goals. The sales plan may also include the revenue goals, the target audience, and tools the sales team can use in their day to day activities. The sales plan will also include examples of hurdles and pain points the team might encounter

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SALES AND OPERATIONS PLANNING 4 as well as contingency plans to overcome the challenges (Veras, 2023) . The sales plan should include the tools to help the team do their day to day, plan to achieve goals, potentially challenges, and how to overcome those challenges so that the team has the ability to perform the plan and achieve the plans. Operations Planning In order for the sales team to achieve their plan, the sales team has to work with the operations team and the operation team will need to make a plan to support the sales team. An operation plan is an extremely detail=oriented plan that clearly defines how a the operation team contributes to achieving the organization’s goals. The operation plan outlines the daily tasks required for running the business. An operating plan makes sure that each manager and employee knows their specific tasks as well as how each task should be performed and the order the tasks are performed. Mapping out the day-to-day tasks ensures a clear path for the operation and is essential for the organization’s success. On a daily basis, the operation plan should answer these crucial questions to keep the organization running. The questions are “What are the strategies and tasks that need to completed or achieved?,” “Who are the individuals responsible for those tasks and strategies?,” “When must each strategy be completed?,” and “How much will it?” (Board, 2020) These four questions help to define each person’s activities and when the activities should be completed. This is important as you do not want people duplicating tasks or doing tasks out of order as that will disrupt the organization and cost more money. At the end of the day the operation plan is the manual that ensures the organization, and all its employees execute the day to day operations in that way the helps the overall organization reach their goals and be successful. Challenges to Sales and Operating Plans Operation and sales plans are closely linked. A sales plan should outline the actions that the sales team will take to achieve the company’s goals. A sales plan differs from the operation plan but in the end they are both working towards the same goal, the overall company’s success. Because each plan is set by different teams and each team has different objectives, there are challenges to the operating and sales plan. One challenge is that the sales teams put forth a sales plan that makes the operating team

SALES AND OPERATIONS PLANNING 5 unable to achieve the plan and goals. The sales team is so focused on the growth of sales that they do not coordinate with the operations team to ensure the operations team can meet the sales forecast. This is a challenge for the entire company because the entire company’s success is dependent on how successful the sales team is and how to turn those sales into profits. If the operation team cannot meet the sales plan and forecast, then that means that the company will be leaving money on the table in lost sales. This could have a major impact on that company cannot keep up with demand and customers could choose to leave and find another company that can meet the demand and satisfy their needs. This could turn into a long-term challenge as gaining customers back could take time and lead to lower sales for years to come. Another challenge in trying to achieve the sales plan and operating plan goals is a misaligned operation plan. The operating team could be trying to achieve production efficiencies that lead to production, warehouse, logistics, and supply chain issues that cause the organization to miss sales or incur extra cost in warehousing or logistics. If the operating team does not coordinate their operating plan with the sales team and their plan, operations could be producing products the sales team is not trying to sale or producing too much of an product that does not match with sales team plan for sales. Whether one of these cases will cause the company to incur more costs and reduce profits. If the operating team is not matching the sales team, products that are produced that are not being sold will incur additional storage and warehouse cost and potentially transportation cost if these products have to be moved to a storage warehouse. As you can see a misalignment and coordination of the sales and operation planning can be very costly and cause organizations to be unsuccessful. In order to overcome these challenges, the organization has to ensure the each team is collaborating and coordinating. If the teams are working together, these challenges can be overcome, and any sales or operation challenges should be minimal. The benefits are clear to their organization with the teams working together but these challenges will never be able to be totally eliminated because some people have their own thoughts about how to do these plans and will not change. A person may have been successful at another organization with an operating plan and thinks that plan will work at the next organization but since each company’s supply chain is a unique process that plan may not work. It is clear that sales and operations working together is the best

SALES AND OPERATIONS PLANNING 6 for the organization but not all people see that. Sometimes they have to fail but they can see their faults. That is why some of the challenges cannot be fully eliminated even though the benefits of working together clearly outweigh the individual success these people may achieve. Marketing Promotion In order for the organization to grow sales and meet the forecast, sometimes organizations use marketing promotions to boost sales. Marketing promotions can be a good benefit for the organization but the marketing promotion has to be coordinated with the sales and operating teams in order for the promotion to be successful. If the marketing promotion does not coordinate with the sales and operating teams, all three teams could have issues. If the marketing team puts together a promotional campaign for a product that the operating team does not have a plan to increase production, then the promotion campaign will have issues. The campaign is going to drive customers to purchase the product but there may not be enough products to satisfy the demand the campaign has produced. This is going to upset customers and could cause bad publicity. When the sales team works with marketing to put together a marketing promotion, there has to be coordination with the operating team so that all three teams are on the same page. Through collaboration, the marketing team will understand the goals and plans of the sales team so they know what products and tactics to use in a marketing promotion, sales team will know how the marketing team is planning to promote the products, and the operating team will know what products are being promoted and when to ensure that the operation plans aligns and the products will be available. For example, the marketing team decides to run a coupon promotion campaign. The marketing team will talk with the sales team about the products that need to have coupons and promotions to help the sales team meet their goals. After the marketing and sales teams meet to discuss the coupon campaign, both teams meet with the operating team to discuss the coupon campaign. The marketing and sales team discuss what products will be in the coupon campaign, when the coupon campaign will start, and when the coupon campaign will end. The operating team then can review their operating plan and make the necessary adjustments to ensure production of the products in the coupon campaign align with the timeframe. This collaboration and alignment helps to ensure all three departments are aligned and are

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SALES AND OPERATIONS PLANNING 7 able to discuss any potential issues and have contingency plans in case any issues occur during the coupon campaign. Conclusion A supply chain is a function that relies on many different departments and teams. In order for the supply chain to be successful, all of those teams must collaborate and coordinate to ensure that the supply chain is functioning as needed. Two of these teams that are important to the supply chain success and overall success of the company are the sales and operating teams. When the sales teams produce their sales plan which outlines the sales forecast and revenue projections, that sales plan must be shared with the operating team to ensure that the operating team is aligned with production. The same can be said about the operating team. When the operating team is putting together its operating plan and outlining the operating schedule, that operating plan must be shared with the sales team so that everyone is aligned. If there are miscommunications that can lead to challenges and issues with the sales and operating teams and cause issues further down the supply chain. When the sales forecast and operating plan are not aligned it can also cause additional costs to the organization. There could be additional production costs, warehousing costs, and transportation costs as the company could have too much inventory needed or not enough inventory needed. This can also get complicated by the use of marketing promotions. Marketing promotions can give the organization a boost in sales, but the marketing promotion has to be aligned with the sales and operating team. If the three teams do not align, there can be some of the same issues with production, warehousing, and transportation. But if the three teams algin and coordinate with each other the organization can be setup for success as the company will produce the products needed for the marketing promotion when needed to meet the sales forecast ending in a successful marketing promotion. Collaboration and coordination are keys to success and the overall success of the company.

SALES AND OPERATIONS PLANNING 8 References Board, T. A. (2020, February 20). What an Operating Plan is and Why You absolutely Need One. Retrieved from The Alternative Board Blog: https://www.thealternativeboard.com/blog/operating-plan Chopra, S. (2019). Supply Chain Management Strategy, Planning, and Operation. Boston: Pearson Education. Veras, E. (2023, January 23). How to Write a Sales Plan. Retrieved from Business News Daily: https://www.businessnewsdaily.com/15773-how-to-write-a-sales-plan.html

Wilfong Week 3 Sales and Operations Planning

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