People. Process. Systems.

Ryan Feely
15th January 2021

Successfully Deploying S&OP Header Image
It is well documented that up to 75% of business transformations fail to meet their goals. What is required then to be successful in deploying, or improving, the Sales & Operations Planning (S&OP) process in your organisation?

Let us look at this from a People, Process and Systems perspective.



There are a number of considerations and key aspects to get right from a people perspective to ensure a successful S&OP deployment. The number one issue – is having the correct Project Sponsor to support the project. This role is critical in order to smooth out the inevitable bumps along the road. The Project Sponsor should be from the Senior Management Team and as such will already have credibility and authority within the organisation. It is critical that the Project Sponsor truly believes in the S&OP process and the benefits it brings to the business. Having conviction, the Project Sponsor will indeed ensure that any obstacles faced by the Project Manager and Project Team will be removed when issues arise that cannot be resolved by the Project Team alone. It cannot be stressed enough the importance of this role for a successful project.


The next important issue is the identification and availability of the right Subject Matter Experts (SMEs) to be part of the project – either as full-time or part-time members as required. As with the attributes of the Project Sponsor, the SMEs also need to understand and believe in the benefit of the S&OP process to ensure they fully contribute in a positive way regarding how things are done today and how a new or improved process can be developed.


The roles of the key stakeholders in the new S&OP process need to be clearly defined. This point is covered more in the process section.


Change Management is a key factor in ensuring a successful project. Effective communication within the team and to the wider stakeholder community is essential. This requires a communication strategy and plan to be developed regarding:

  • Target audience
  • Content / Messaging
  • Format / structure
  • Delivery mechanism
  • Timing


Training is key. New Process and System training will be required. Planning and creation of training materials, consideration of delivery mechanism and the number of workshops required need to be planned, scheduled and delivered. Ensure the training materials are highly visual and are ‘screenshot based’ with as few words as necessary to carry out the process successfully. The training materials may need translations to multiple languages if the project is global. Some key training-related considerations:

  • How will the training materials and delivery be incorporated within the company Learning Management System (LMS)?
  • Is online learning required?
  • How will competency and effectiveness of training be evaluated?
  • How many people need to be trained and what training do they require?
  • Can an internal ‘train the trainer’ approach be deployed?
  • How many trainers will be required?
  • Does the capability and/or capacity to deliver the training exist in-house?



In establishing the S&OP process, it is critical to remember the goal of S&OP. The primary goal is to provide information to aid decision-making in aligning the strategic, tactical, and operational plans of the business. It should not be confused with the Sales & Operations Execution (S&OE) process, albeit your S&OE process is inextricably linked and aligned to the S&OP process.

In high level terms, S&OP is strategic planning to support senior management decision-making on a longer-term planning horizon and family level of aggregation. It is typically a monthly process and cadence. S&OE on the other hand is tactical planning for operational management decision-making for a shorter planning horizon (dependent on product/service lead times) at the item/SKU level of planning. The different goals and attributes of both processes are covered in more detail in a previous Optimum PPS article “Is Your S&OP Process Actually and S&OE Process”.

S&OP should be developed around a best-practice process in terms of:

  • Reviews – New Product Introduction (NPI), Demand Review, Supply Review, Reconciliation, S&OP
  • Roles – Demand Planners, Supply Planners, S&OP Manager
  • Cadence – typically monthly for complete cycles
  • Participation – In addition to Demand/Supply Managers – Sales, Finance and Senior Management
  • Data – Source, integrity (quality), integration, digital incorporation
  • Analytics – KPIs, dashboards, drilldown, ease of ‘creation’, exception-driven
  • Digital – external and internal data sources, availability, updating, machine learning, AI


Other key process considerations that are essential to incorporate in the S&OP process are:


The forecast must be reviewed in both units and revenue.

Converting the forecast to revenue based on selling prices is paramount and a key cornerstone of S&OP. This enables the bottoms-up sales forecast to be compared with the top-down financial plans of the business. This will act as an integrity check on how realistic the demand forecast is and how well aligned the operational and financial plans of the business are.


Product segmentation based on demand characteristics

Most typically, the baseline forecast (before manual adjustment) begins with a system-generated forecast (using statistical methods) based on historical sales demand patterns creating a baseline for future demand forecast. Items with a low co-efficient of variation in demand – in simple terms, demand each period with small variation in that demand – lend themselves very well to statistical forecasting. Note this is independent of the sales value of the items and applies to low and high sales volumes and values.

At the other end of the demand variability are items with very random sales patterns and sporadic demand. These do not lend themselves to statistically generated forecast baselines and require a lot of manual maintenance to set a good forecast. In fact, many of these items would lend themselves better to an inventory planning policy and re-order point mechanism. Many S&OP processes today do not recognise the need for forecasting and planning these item-types differently and in fact some base product segmentation on value only – a major mistake. This very important topic and approach required will be covered in greater detail in a future Optimum PPS article.



The third key pillar of issues are system issues in the S&OP Process. The obvious question is – which systems are best for S&OP? Many companies first thoughts are that they should look to their primary ERP system and obtain the S&OP module as at least that will be “fully integrated”. This may not in fact be the best approach. Open systems integrate just as easily and consideration of a ‘best of breed’ application should, as a minimum, be evaluated against any proposed module that your current ERP provider could provision.


Many best-of-breed applications have been purpose built for S&OP and supply planning and will easily sit on top of existing systems and platforms seamlessly. Processing speeds are infinitely faster compared with systems in the past meaning many more items can be planned and replanned for ‘what-if’ scenario planning than was previously possible. Planning runs were typically required to be generated overnight previously due to the amount of computation capacity consumed – now such runs can be done in several minutes due to technical advances in ‘in-memory processing’. This enables multiple scenario plans to be developed with changes and comparisons evaluated to optimise decisions taken to produce the best possible outcomes in customer service levels, revenue, profitability and inventory holding costs.


A very significant development now and in the future is with digital technology. Artificial Intelligence (AI) and Machine Learning are operational and functional now – not some future vision. We are at the point where the only constraints are in our thoughts on what data is needed from where and how it can be utilised to gain better outcomes and competitive advantage in forecasting demand, planning supply, executing the plan and most importantly of all – providing customer excellence, cost-effectively. Much of the detailed changes and adjustments can be undertaken by technology leaving humans to confirm and finely adjust and hone the S&OP plan. The future is now!


A key consideration in all of this therefore is how well the selected system manages all of these aspects and how to future-proof your organisation by selecting the right, progressive, robust system that will continue to evolve and develop to suit your company’s needs and future direction.



In summary, successfully deploying S&OP requires several key ingredients. Consider these from a People, Process and System perspective as described above – they are all critical for a successful outcome.

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