What the world needs is another acronym, right? Normally, I would say no way, but this one – "SIOP" – is a good one because it helps organizations of all types evolve to solve problems quicker and with more foresight.
"Sales, Inventory & Operations Planning" used to be called "S&OP" for "Sales & Operations Planning." But more and more, I am seeing forward-thinking businesses couch their strategies in a broader context that involves world-class inventory management.
Simply defined, SIOP is an integrated business management process through which the executive/leadership teams continually achieve focus, alignment and synchronization among all functions of the organization. We’re learning these days that the smartest companies cross organizational boundaries to solve problems in strategy, planning, managing inventory, sales and manufacturing.
In its most basic form, SIOP was developed to address these types of situations; however, it is impractical to do so at the SKU or transaction level. Accordingly, SIOP provides a structured business process that facilitates addressing problems at the product family or group level ahead of time whenever possible.
To gain greater insight, the Tompkins Supply Chain Consortium recently performed an analysis of the level of communication that takes place between functions to address SIOP issues. Data collected from a recent Consortium survey indicates that more than 80% of participating companies have a formal SIOP process in place, and there is virtually no difference in the use of an SIOP process at retailers or manufacturers.
If you’d like more information on the survey and SIOP, you can download the Executive Briefing, Sales, Inventory & Operations Planning: Crossing Organizational Boundaries.
Is your company doing SIOP, and if so, what have you learned?
More Resources
From the Tompkins Supply Chain Consortium: Inventory Management Tops 'Critical List' for Companies in 2010
Lessons from the Benchmarking and Best Practices Leaders, from the The Global Supply Chain Podcast (listen here or see the text transcript)
Photo credit: Tim Brauhn