Sales & Operational Planning

Unlocking Business Potential with Sales & Operational Planning (S&OP) 

In a rapidly evolving business environment, alignment between sales, operations, and finance is critical. Many companies struggle to meet customer demand while managing production capacity, optimising inventory levels, and balancing costs. This is where Sales & Operational Planning (S&OP) comes into play—a structured, integrated process that synchronises all key areas of your business to deliver a clear and actionable plan. 

At its core, S&OP is about improving decision-making and ensuring that every department within the business is working toward a shared set of goals. It can transform how you manage demand, production, inventory, and financial performance, ultimately creating a more agile, responsive, and profitable operation. 

So, what does an effective S&OP process look like? Let’s break it down. 

1. Product Review: Managing Your Portfolio 

The first step in any S&OP process is reviewing your product portfolio. The goal is to assess how well your current and future products are performing in the market and align them with your business strategy. This involves looking at: 

• New product development: What new products are in the pipeline? When will they launch, and what’s the expected impact on demand and production? 

• Product lifecycle management: Are there products nearing the end of their lifecycle? Is there an opportunity to reduce inventory for obsolete items? 

• Discontinuation: What products should be phased out? Clearing these from inventory frees up cash and space for faster-moving or higher-margin items. 

This review ensures that you are focusing on the right products and investing your resources in the areas that will drive the most growth and profitability. 

2. Demand Review: Forecasting with Confidence 

Once you’ve reviewed your product portfolio, the next step is assessing demand. This is about more than just forecasting future sales; it’s about creating a realistic, data-driven plan based on market conditions, customer behaviour, and upcoming events. A comprehensive demand review should include: 

• Sales forecasts: Based on historical data, market trends, and sales team input. 

• Marketing activities: Upcoming promotions, advertising, or product launches that could impact demand. 

• Customer insights: Changes in customer buying behaviour, won or lost customers, or external market shifts. 

• New product introductions: How will new products perform compared to existing items? What’s the likely impact on demand for similar SKUs? 

The demand review ensures your forecasts are aligned with reality, minimising the risk of stockouts, overproduction, or excess inventory. 

3. Supply Review: Aligning Capacity with Demand 

Once the demand forecast is in place, the next challenge is ensuring you can meet that demand. The supply review focuses on aligning your production, inventory, and distribution capabilities with forecasted needs. It should address: 

• Production capacity: Do you have the resources to meet forecasted demand? Are there bottlenecks or constraints in your production process? If so, what’s the plan to mitigate these risks? 

• Inventory levels: Are your current stock levels aligned with forecasted demand? Should you increase or reduce inventory for specific items? The goal is to optimise inventory to avoid carrying excess stock or running into shortages. 

• Supplier management: Can your suppliers meet your needs on time? Are there potential disruptions in your supply chain? Clear communication and collaboration with suppliers are critical to managing risk and ensuring that supply aligns with demand. 

A well-executed supply review keeps your production plans realistic, aligns resources with forecasted demand, and ensures you can deliver what your customers need—when they need it. 

4. Financial Review: Balancing Costs and Revenue 

The financial review is where the numbers come together. It’s not just about reviewing past performance; it’s about aligning your operational and sales plans with financial targets. Here’s what to consider: 

• Revenue and profit targets: Are your sales and production plans aligned with financial goals? Does the current plan help achieve your growth targets while keeping costs in check? 

• Cost vs. profitability: How does the current plan impact your bottom line? Can you reduce costs without sacrificing product quality or customer satisfaction? Are there opportunities to invest in areas that will drive profitability? 

• Cash flow: Are you carrying too much or too little inventory? How do inventory levels impact your working capital and cash flow? 

The financial review ensures that your S&OP process doesn’t just meet operational and customer needs but also aligns with your overall business strategy, helping to drive profitable growth. 

5. Executive S&OP Meeting: Aligning the Entire Organisation 

The final step in the S&OP process is the executive review. This is where all the inputs—product, demand, supply, and financial—come together for leadership to review, align, and make key decisions. The executive S&OP meeting should include: 

• Decision-making: Setting the final, agreed-upon plan for the business based on the inputs from each department. 

• Risk assessment: Identifying any potential risks in the plan and developing mitigation strategies. For example, what happens if demand outstrips supply? What are the contingency plans for major supply chain disruptions? 

• Communication: Ensuring that all departments are aligned and understand their roles in executing the plan. This is key to building organisational buy-in and maintaining accountability across the business. 

By bringing all stakeholders into the same room, the executive S&OP meeting ensures that everyone—from sales to operations to finance—is working from the same playbook. The end result? A clear, actionable, and realistic plan that drives the business forward. 

Why S&OP is Crucial for Business Success 

When executed well, S&OP transforms how your business operates. It creates a shared vision, breaks down silos, and ensures every department is working toward a common set of goals. More importantly, it makes the business more predictable, enabling better decision-making and resource allocation. The benefits of S&OP include: 

• Improved customer satisfaction: You can more consistently meet customer demand by ensuring that sales forecasts align with production capacity. 

• Better resource management: S&OP allows you to optimise production, inventory, and workforce planning, reducing waste and inefficiency. 

• Increased profitability: Aligning operational plans with financial targets helps maximise revenue while keeping costs under control. 

• Enhanced agility: With clear visibility into demand and supply, your business can respond faster to changes in the market, customer needs, or supply chain disruptions. 

Getting Started with S&OP 

Implementing S&OP may seem daunting, but the key is starting with a simple, structured process and building from there. The first step is establishing a regular cadence—typically monthly—to review product, demand, supply, and financial performance. Over time, the process will evolve, becoming more sophisticated and better aligned with your business needs. 

S&OP isn’t just a one-off meeting or a task to check off the list. It’s a continuous process that requires commitment from all levels of the organisation. But when done right, it’s a game-changer for creating a more resilient, profitable, and customer-focused business. 

Ready to get started? Reach out, and I can guide you through setting up an S&OP process tailored to your organisation’s needs. 

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