Why is Integrating Sales and Operations Planning So Difficult?

One of the most difficult challenges for many manufacturing facility managers is integrating the functions of their sales and operations teams. On the surface, this can seem like a relatively simple issue; the sales team produces orders and the operations team fulfills them. In practice, however, lulls and sudden rushes in the number of orders received can create havoc on the production floor.

Getting all of your departments on the same page

The truth is that the business world just doesn’t behave optimally for top production efficiency. While the goal of many production teams is the steady and uninterrupted flow of product, real-world sales tend to come in discreet quantities. That means the production team has to contend with lulls in orders, followed by periods in which they are hard-pressed to get product out the door and to the customer. Production may issue requests for the sales team to increase or decrease their order output, but due to various reasons—both from inside the company and from the outside—these two departments are rarely on the same schedule or may not share the same goals.

For the management team, these disagreements are more than squabbling between departments—they represent real issues that impact the production process. When sales are low, production lines are sitting idle, wasting valuable human resources and capital. A burst in new orders is celebrated, but it can lead to raw material being purchased at high prices and workers being paid overtime in order to meet demand.

Integrating sales and operations planning

Getting these two departments to align their schedules requires the use of an ever-changing algorithm that takes into account nearly every department in the company. Simply collecting up the orders at the end of each week and taking them to the production floor is not a practical solution. Instead, consider a software system that is able to accurately predict incoming orders, based on historical records.

By reviewing the orders received over the past several months or years, a good, integrative production planning system can detect sales patterns. Seasonal surges in orders or slower periods that occur when clients go through their own market slumps are easily detectable to a computer program that can analyze and sort thousands of orders in a matter of seconds. Based on this data, it is possible to predict the flow of orders that your company will receive before the sales department has even contacted the client.

That means your production team can work with a schedule that paces the manufacturing process so that employees and equipment are not over or under-worked. When orders are expected to pick up in a few weeks, your production floor will already be busy making product with materials that were purchased at some of the lowest prices available on the market. When those orders are actually received by the sales department, the product can be shipped immediately. That will make your product one of the most cost-effective ones in its sector, and will keep your customers happy.