The main purpose of S&OP is to align supply and demand by integrating sales forecasts with production planning, ensuring optimal resource allocation and minimizing risks.

S&OP ensures that production and inventory levels are closely aligned with customer demand, minimizing excess inventory while ensuring product availability.

Forecasting plays a key role in S&OP by predicting future demand, helping businesses plan for capacity, inventory, and production needs effectively.

S&OP integrates sales, marketing, production, finance, and supply chain functions, ensuring that all departments work toward common goals based on shared forecasts and plans.

Cross-functional collaboration ensures that all departments align their goals with the overall business strategy, leading to improved decision-making and efficiency in meeting demand.

Changes in demand can require adjustments in production, inventory, and supplier coordination to meet new customer needs while avoiding stockouts or excess inventory.

S&OP is closely linked to financial planning, as accurate forecasts and plans ensure that businesses can meet financial goals, allocate resources effectively, and manage costs.

Inventory management ensures that businesses can meet customer demand without overstocking or understocking, which is a critical part of the S&OP process.

Performance evaluation ensures that the S&OP process is effectively aligned with organizational goals, allowing for adjustments to improve future forecasts and operations.