Describe the role(s) and objective(s) of sales and operational planning in the healthcare industry. Why is this important for you to know as you prepare to become a Healthcare Manager/Administrator?

Sales and operational planning is when management teams come together to review projections for supply and demand and revenue from these activities. This process is often carefully carried out, monitored and directed by management to ensure conformity with overall organizational objectives. The sales and operations planning process is newer to the healthcare industry than other industries, its’ “practice includes other departments outside sales and operations like marketing, procurement, manufacturing, transportation and finance” (Rouse & Essex, 2018). Sales and operational planning process is a collaborative process, thus it is interconnected to other key business processes in the organization, its’ focus is matching demand and supply at aggregate levels and the removal of constraints through cross function consensus on long term views and goals.

 "Distributors and manufacturers in health care widely use sales and operational planning because of the huge array of stock-keeping units in multiple distribution locations." (Langabeer & Helton, 2016)

According to Langabeer & Helton, the objectives of sales and operational planning are:

1. "Provide a common base of information around the immediate market dynamics."
2. "Manage the performance of the supply chain."
3. "Collaboratively manage product portfolios."
4. "Creatse shared business plans and scenarios."

The sales and operational planning process can be divided into phases: business planning, to demand analysis, to supply analysis, to balancing and then to decisions.

The importance of sales and operational planning process cannot be overemphasized, because it is a formalized cadence of Sales, Marketing and Operations looking ahead at demand together so Operations can better plan resources (Wahba, 2013)

As a manager in the healthcare industry, the relevance of sales and operational planning knowledge is to enable me align sales and operations teams, also the alignment of other cross functional processes; by clearly communicating the operating strategy of the organization. Also teaches me to extend my focus to the translation of planning to execution (Cecere, 2015). I will be able to improve product management, increase my budget forecasting capabilities, improve promotional planning, and minimize unnecessary buildups of inventory by improving product lifecycle management process (Murray).  All these will in turn boost my organization’s working capital by tying less money in inventory, whilst increasing customer satisfaction and sales, a corollary of which is the increase in market share due to the effectiveness of output of the organization.

As with most processes in recent decades, sales and operational planning process has increasingly included advanced analytics, I as a manager will employ tools that will drive my team and organization to performance excellence based on my organization’s needs and capacity for example Rouse & Essex, believes using specialized sales and operational planning software to automate the process can shorten planning cycles, thereby reducing labor costs and boosting productivity as employees are relieved of the cumbersome, often manual work involved in preparing forecasts and collaborating on a unified plan.

Reference

Cecere, L., (2015, January 21^st). Why Is Sales and Operations Plannning So Hard? Retrieved from        https://www.forbes.com/sites/loracecere/2015/01/21/why-is-sales-and-operations-plannning-so-hard/#178aff31265d

Langabeer, J.R. II. & Helton, J. Jones & Bartlett Learning (2016).  Health Care Operations Management: A Systems Perspective. 2. Pp 265-275

Murray, M., (2018). Sales and Operations Planning: What is S&OP? Retrieved fromhttps://www.thebalance.com/sales-and-operations-planning-2221398

Rouse, M. & Essex, D., (2018). Sales and Operations Planning (S&OP). Retrieved from https://searcherp.techtarget.com/definition/sales-and-operations-planning-SOP

Wahba, B., (2013, December 5^th) A Sales and Operational Planning Opera. Retrieved fromhttps://www.lean.org/LeanPost/Posting.cfm?LeanPostId=114

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