A well-designed Sales & Operations Planning (S&OP) scorecard is essential for measuring the health of a business and aligning sales, operations, and financial planning. Here are the key metrics every scorecard should feature:

• AOP vs S&OP

Tracks monthly sales and year-to-date (YTD) sales against what is outlined in the budget or annual operating plan (AOP). This highlights how well a business is performing relative to its planned financial targets.

• Capacity Utilization

Capacity utilization is a key metric in the S&OP scorecard. It assesses how efficiently a company is utilizing its production capacity. Understanding current utilization levels is essential for planning future demand and ensuring that production capacity aligns with it.

• Inventory Turns

Think of inventory turns as your measure of agility. If your stock moves quickly, that means you're adapting well to customer needs. If it’s slow, it might signal overstocking or weak demand.

• Fill Rate (OTD)

Monitors order fulfillment performance and customer satisfaction. High fill rates and OTD indicate a well-coordinated supply chain that meets demand effectively.

• Forecast Accuracy

Assesses how well sales forecasts align with actual demand. Forecast accuracy should encompass both sales insights and data modeling using various quantitative techniques.

• Schedule Adherence

With a solid forecast and a well-structured plan, it’s crucial to ensure that the factory produces according to the forecast and that suppliers deliver as expected. Failure to adhere to the schedule can lead to stockouts.

• Warehouse Utilization:

This is cost and transportation metrics. While it helps to measure various sub-processes within S&OP or components of the supply and fulfillment process, it is not considered as major or critical metric.

Why Sales Should Take Center Stage?

Imagine this: perfect forecast accuracy, near-perfect fill rates, and stellar warehouse performance—but a steady drop in sales. You're headed for trouble. Even the most finely tuned supply chain can’t make up for declining sales or lost market share. Sales metrics, particularly sales versus AOP and capacity utilization, should take precedence on your scorecard. They provide the first signs of business health and growth potential.

The S&OP process is not just about supply-side optimization; it’s about enabling the business to respond to market changes. Focusing too heavily on operational KPIs, without a sales-driven lens can lead to the perfect execution of an unsustainable strategy. Make sure your S&OP scorecard reflects both sides of the business - sales and operations - in a balanced way.

For the detailed information, please check out the video below:

Not sure if your S&OP scorecard is driving the right results? Let’s review and fine-tune it together to ensure it reflects your strategic priorities. Balancing growth with execution is the key to sustainable success.

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