Sales & Operations Planning S&OP

S&OP Process: Structuring Mid-Term Management

Sales & Operations Planning (S&OP) is the central mid-term planning process for a business. A true backbone of the supply chain, it ensures alignment between sales, production capacity, procurement, and inventory, serving the company’s overall strategy.

Recent S&OP Implementation References:

Why Implement an S&OP Process?

Primarily to satisfy customer demand at the best cost. More specifically, a structured S&OP process allows you to:

  • Reconcile strategy and operations: through an integrated S&OP plan covering sales, production, logistics, procurement/purchasing, and finance, with a clear vision of priorities and trade-offs.
  • Align key business functions: sales, marketing, supply chain, production, finance, and general management.
  • Make informed and rapid decisions: based on complete and reliable data.
  • Project realistic performance: by relying on the reality of sales and industrial capacities to set a financial commitment.

Pillars of an Effective S&OP

A high-performing S&OP process relies on:

  • A structured monthly iterative cycle: centered around key validation meetings (forecasting, planning, load/capacity, trade-offs).
  • A rolling forecast over a mid-term horizon: 3-18 months (horizon and cycle frequency vary depending on the sector, such as aeronautics).
  • Prepared trade-off meetings: involving business stakeholders and senior management, focused on analyzing objectively measured deviations and operational scenarios (customer service, costs, etc.).
  • Continuous and impartial process animation: integrating more agility during periods of instability (VUCA context).
  • Exception-based management: focused on current issues, with clear and shared indicators.
  • Broad and structured communication: of decisions, coupled with monitoring of their application and effectiveness.
  • Decision-support tools: adapted to the size and maturity of the company.

What can you observe in a Mature S&OP Company?

In a mature organization, you will notice:

  • Efficient and concise meetings focused on operational decision-making.
  • Fluid inter-departmental collaboration.
  • Increased accountability at operational levels.
  • Enhanced agility and greater responsiveness to unforeseen events.
  • Mutual commitment from involved functions.
  • Improved budget and sales reliability.

Symptoms of a Failing or Non-Existent S&OP Process

In your organization, you may notice:

  • Obsolete and unattainable budgets from the first months of the year?
  • Imbalanced inventories: excesses on some items, shortages on others?
  • Production poorly calibrated to meet sales?
  • Poor cooperation between different functions?
  • Chaotic product launches or poorly anticipated production stoppages?

Do you recognize yourself in some of these symptoms? Contact us to share your vision and discuss your challenges.

S&OP FAQ

When should you call on Newton.Vaureal Consulting’s S&OP experts?

  • To resolve recurring malfunctions: shortages, internal tensions, production delays, low visibility.
  • To overhaul planning processes following acquisitions, mergers, or restructurings.
  • To support supply chain transformation projects.
  • S&OP is not always the initial reason for our supply chain consultants’ intervention with a client, but is often identified as a key solution to the dysfunctions observed during a global supply chain diagnosis.

Is S&OP only for manufacturing companies?

No. It is the cornerstone of operational efficiency in manufacturing, but is also increasingly prevalent in retail and service activities, where the management of inventory, procurement, and capacity is also a major challenge.

How long does it take to implement an S&OP process?

On average, 2 to 4 months, depending on complexity (single/multi-site, national/international, centralized/decentralized operation, etc.). Follow-up support during the first three monthly implementation cycles is recommended. For an existing but inefficient S&OP process needing revitalization, one month is usually sufficient to conduct a diagnosis and initiate operational relaunch over three cycles.

Is a digital tool necessary to get started?

In any case, the process prevails over the tool; the tool should be chosen based on the process, not the other way around. Simple tools (Excel, Power BI) may suffice for simple structures (SMEs, single-site, etc.). For more complex structures, an Advanced Planning System (APS) should be considered once the S&OP process is stabilized.

Is S&OP relevant only for large companies?

No. Although often associated with large corporations, S&OP is equally relevant for SMEs and mid-sized companies. It is even recommended to start pragmatically, with a simple structured Excel file, a well-defined monthly routine, and clear governance. The key lies in regularity, process rigor, team commitment (sales, supply, finance, management), and the ability to make aligned decisions.

What are the prerequisites for implementing an S&OP process?

  • Management’s commitment to position S&OP as the central planning process for the business.
  • Designation of an S&OP process manager (Supply Chain Director or other central function).

Is the S&OP process still relevant in a VUCA context?

Absolutely. S&OP remains an essential tool for aligning key business functions and coordinating decisions, especially during periods of instability. Its rhythm must be more agile by adapting operational plans without waiting for the following monthly cycle and by creating reactive bridges between short and medium term. Short-term routines (Master Production Schedule, Scheduling) allow for real-time measurement of the impact of short-term operational decisions on mid-term commitments resulting from the S&OP process.

What are the key questions our experts ask during an S&OP mission?

  • How to make it a lever at the service of the company’s strategy?
  • How to integrate the S&OP process into the heart of the company’s decisions?
  • How to anchor it in the company’s management culture?
  • How to support key players in implementation?
  • What decision-support tool to sustainably support the approach?
 
 

We operate in various sectors

Distribution

Large groups, institutions, SMEs ; we have the resources to support companies of all sizes and in all circumstances (from long-term vision to crisis support)

Industry

Supply chain is becoming an integral part of industrial sites. Managing site supplies means working more closely with suppliers, and integrating factory workflows into the supply chain.

Public institutions and communities

Our work focuses on issues relating to the organization and management of physical flows, as well as on forward-looking studies linked to territories. Our areas of expertise include urban logistics, modal shift and carbon footprint.