{"id":11206,"date":"2023-06-06T10:19:09","date_gmt":"2023-06-06T17:19:09","guid":{"rendered":"https:\/\/www.qad.com\/blog\/?p=11206"},"modified":"2023-06-06T10:23:05","modified_gmt":"2023-06-06T17:23:05","slug":"connecting-the-gaps-between-financial-planning-operational-planning","status":"publish","type":"post","link":"https:\/\/www.qad.com\/blog\/2023\/06\/connecting-the-gaps-between-financial-planning-operational-planning","title":{"rendered":"Connecting the Gaps Between Financial Planning & Operational Planning"},"content":{"rendered":"

[vc_row][vc_column][vc_single_image image=”11207″ img_size=”full”][vc_column_text]Many businesses today still allow internal departments to work independently of each other, causing daily functions to shift into silos and creating disconnects in processes and, inevitably, the supply chain. This is especially true for <\/span>sales and operations planning<\/span><\/a> (S&OP) and financial planning. However, considering today\u2019s volatile global supply chain, financial planning must be integrated with sales and operations during the planning process to align both department\u2019s goals.<\/span><\/p>\n

Where the Gaps Exist<\/span><\/h2>\n

In essence <\/span>S&OP<\/span><\/a> is all about collaboration. The problem is that what exactly collaboration should entail is sometimes unclear. Many companies believed collaboration should occur amongst sales forecasting, operations planning and procurement planning teams. However, companies today are now beginning to realize that the collaboration must include the complete ecosystem of an organization, including key trade partners, throughout the whole process.\u00a0<\/span><\/p>\n

Many manufacturers today still use past decision-making methods, which is a disconnected model that leads to critical departments, like finance and operations, being isolated from one another. In most cases, this model excludes any input from the finance team beyond the annual static budget recommendation.\u00a0<\/span><\/p>\n

If the gaps between these groups were minimized, businesses could determine the impact of supply chain decisions early in the planning process and at all levels of planning: from strategic to tactical through execution. For seamless operations, businesses must have the ability to make cross-functional decisions.\u00a0\u00a0<\/span><\/p>\n

The Silo Problem\u00a0<\/span><\/h2>\n

An excellent example of what can happen to a business that doesn\u2019t make cross-functional decisions is a company that produces a specialized variety of deli meats. Demand for this product was predominantly found in major U.S. metropolitan areas and in a distinct demographic. The particular deli product, which was a low seller for the company, was prone to many production issues, including:<\/span><\/p>\n