Very few businesses only offer a single product or service. In a majority of businesses the complexity caused by the numbers of combinations of products and/or services is one of the primary causes of waste effort and cash. Traditional businesses tend to believe that they are running to a business plan, usually they are attempting to run the operation with nothing more than a budget and a lot of wishful thinking.

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In a majority of businesses the business planning/budgeting process, sales (Demand) and operations (Supply) operate independently. When links are made they tend to result in conflicts (the severity of which is highly dependent on the culture and individual personalities). Even some organizations that have good informal communication channels can have problems since no one has an overall picture of what is happening or is going to happen. Disconnected businesses are less effective and less efficient than connected ones. This is given in a diagrammatic form opposite,

What is really needed is a system that ensures that all parts of the business are involved in the process such that discrepancies between the Demand and Supply sides of the business can be addressed at a very early stage, thus ensuring that there are no nasty surprises. A Sales and Operation Plan (SOP) is basically a process that ensure the sales and operational parts of a business are pulling in the same direction. It is regarded by a majority of people as being the most significant step along the route to Business Excellence. Since, when well implemented, it provides all of the following,

A common language for all parts of the business
A link between the Business Plan and the real world of sales and products
An agreed plan for capacity planning
An agreed plan for material purchase
A means of modelling the future
A viable replacement for the annual "budgeting" process

An important element of a viable SOP process is the sharing of forecasts/prediction. Most small businesses say that they can’t forecast since volumes are low, customers are unpredictable etc. In reality we all make forecasts that affect the way in which we provide or act on information, in the disconnected business above each area makes its own forecast in isolation, the usual result is a series of unpleasant surprises. In the connected business the surprises still happen but they tend to be smaller and/or less frequent.

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