The Keys to Effective Sales and Operations Planning

S&OP is an ongoing process that never stops.

S&OP simplifies the companys business plan by identifying what resources are necessary to achieve a company’s goals. The process requires ongoing effort, but it is worth it.


Need Help Automating Your Sales Prospecting Process?

LeadFuze gives you all the data you need to find ideal leads, including full contact information.

Go through a variety of filters to zero in on the leads you want to reach. This is crazy specific, but you could find all the people that match the following:Ā 

  • A company in the Financial Services or Banking industry
  • Who have more than 10 employees
  • That spend money on Adwords
  • Who use Hubspot
  • Who currently have job openings for marketing help
  • With the role of HR Manager
  • That has only been in this role for less than 1 year
Just to give you an idea. šŸ˜€

Sales and Operations Planning Best Practices,

The S&OP process helps with many things, including enhancing productivity. Some of the benefits are that it helps synchronize all aspects of an organization and makes them more productive.

  • Better forecasting of sales and budgets.
  • The demand and supply of a product are important to know when making informed decisions.
  • Improved inventory management
  • Improved communication between departments is critical.
  • Improved customer experiences
  • Products often have a longer life cycle than you might think.

S&OP is broken down into three key aspects, and there are several best practices to follow.

Product review

The first phase of S&OP is to analyze the current demand for your products. You will create a forecast based on sales and other factors such as holidays, seasonality, and trends in the market.

Also, examine product pipelines and set specific dates for new production. Prioritize the development of new products while also analyzing current market health to see if a different product might be better suited.

Demand review

When you have a plan, involve team members from different departments to review it. This way they can help determine whether there are any errors in the demand forecast.

During this phase, you need to take into consideration some key variables. You must account for trends, marketing and new products during your analysis.

Supply planning

The goal of this phase is to identify the demand and supply plan. This will be done by having representatives from finance, operations, and materials evaluate capacity.

Two key elements to fulfilling the demand plan are:

  • Knowing the inventory levels and how it is distributed throughout the supply chain can help you make decisions on when to order more.
  • Productionpurchasing optimization: Is production or purchasing enough to meet the demand plan?

Use these questions to help you create a supply plan that meets demand.

We all get stuck when it comes to what-ifs. When you use good planning software, you will be able to run the numbers and test different scenarios.

Such scenarios include:

  • Taking on a new supplier
  • New competitive entrants
  • Employee skills and training is important for businesses.
  • Budgets could change because of anything that affects them.

You need to reduce risk as much as possible in your business, and you have the option of making wide-ranging adjustments within it.

Financial review

There is a lot of debate about when the financial review phase should happen. Some people think it should be after supply and demand are done, while others believe it’s important to include in every conversation.

In the financial review phase, analyze actual versus forecasted results. You want to get better at forecasting over time.

Pre-S&OP

The meetings in the pre-S&OP phase help to establish a company vision and address any gaps. The goal is for all leaders of your organization to be on board with this.

The team must compare the company’s actual results with projections, identify and analyze variances, keep targets in mind while ensuring budgets are met. Participants will also review key metrics such as revenues or profit margins to ensure that performance is acceptable.

Executive S&OP

The executive S&OP phase is the culmination of all phases in an organization’s production process. It takes place after every plan, forecast, and recommendation has been reviewed by management.

The executive team will review any decisions not made in the previous phases and approve the final plan. They then deploy it to all departments of the company.

Executive support is needed in order to have a successful S&OP process.

Good S&OP plans can only happen if the executives are involved. They need to give guidance and support, as well as make sure that all departments work together on a plan. At least let them have asales and operations planning example.

Sometimes there will be disagreements, but the team needs to compromise at times. The best way is for new ideas to come up in executive S&OP meetings.

Problems can arise if you don’t have a dedicated operations manager. Without someone in charge, the S&OP process will fail and there’s going to be confusion.

Benefits of Sales and Operations Planning

It is important that all team members be involved in the S&OP process. Encourage cross-functional teams and remind your employees of how their input impacts this process.

The S&OP process should be clearly defined and well-known to all employees. It’s important that the company is constantly working on improving it.

Communication is key for successful S&OP. If there isnt clear communication between departments, they can’t deliver the work needed to make it a success.

Risk management is often forgotten during S&OP planning. But it’s important to include risk mitigation plans, so that if there are any challenges, you can tackle them head on.

Constant reviews can also help you improve success, as they compare past projections to results. You want your projections to be as close as possible but even if it’s not 100% accurate, the more often you check in on progress and make adjustments accordingly, the better.

After each S&OP, review your results. See if what actually happened was different from what you forecasted it to be.

What caused the discrepancies? Was it because of internal factors (staffing, management changes)? Were there external factors outside your control that were at play (supply chain management)? Did competitive forces create a need for change in product or service offerings? Were customer wants and needs changing due to varied reasons beyond our company’s control (

By understanding the differences between our past forecasts and actual results, we can better predict what will happen in the future. The more accurately we forecast, the less likely it is that any of these things will happen: Decreased profits Poor planning Increased costs

S&O planning vs. Business Planning

Sales and Operations Planning is a very comprehensive process, pulling input from every department. It mostly replaces traditional business planning but not entirely.

An S&OP is a business plan for the near future.

  • A strategic plan that will help the company to grow
  • Ensures that the company’s vision is communicated to all employees.
  • Presenting forecasts for sales and finances.
  • The article talks about how the industry, customers and competition are all related.
  • The marketing department creates strategies to increase product demand.

However, whats lacking from the S&OP is a good business plan. A company needs to know where they are now and then have a five-year goal for how they want their company to be in that time period.

You can’t effectively set sales and operations planning if you don’t first complete the business plan. Once your one-year goals are clear, then you’ll know what to do next.

The takeaway

The S&OP planning process is a great way to measure the success of departments in achieving their goals. This tool helps leaders communicate company values and objectives, which can help align entire teams.


  • Sign in to comment. Comment Comment Show: Oldest Newest Most Upvotes
  • Need Help Automating Your Sales Prospecting Process?

    LeadFuze gives you all the data you need to find ideal leads, including full contact information.

    Go through a variety of filters to zero in on the leads you want to reach. This is crazy specific, but you could find all the people that match the following:Ā 

    • A company in the Financial Services or Banking industry
    • Who have more than 10 employees
    • That spend money on Adwords
    • Who use Hubspot
    • Who currently have job openings for marketing help
    • With the role of HR Manager
    • That has only been in this role for less than 1 year
    Just to give you an idea. šŸ˜€
Editors Note:

Want to help contribute to future articles? Have data-backed and tactical advice to share? Iā€™d love to hear from you!

We have over 60,000 monthly readers that would love to see it! Contact us and let's discuss your ideas!

Justin McGill
About Author: Justin McGill
Justin McGill is the Founder of LeadFuze - a lead generation platform that discovers new leads for you automatically. Get 25 leads free.