🎼An Orchestra with a ScoreIn the previous lesson, we compared the Demand Planner to a conductor. Now let’s add the sheet music. What does it do? It unites all musicians: violins know when to enter, drums when to stop, and the flute when to hit a high note.

In business, this score is the S&OP process (Sales and Operations Planning). It helps all departments stay in sync: sales, marketing, finance, production, and logistics align around one common plan.

🔍 Theory: What is S&OP?

S&OP (Sales and Operations Planning) is a monthly cross-functional process where:

• The Demand Forecast is reviewed and aligned
• The Supply Plan is assessed for feasibility
• Financial targets (budget, P&L) are discussed
• Executive decisions are made and committed

S&OP is not just about spreadsheets and graphs. It’s about:

• Regular cross-team meetings
• Scenario-based analysis
• Full departmental involvement

📅 Typically, S&OP is held monthly to:

• Adjust forecasts
• Make decisions about promotions, product launches, and investments
• Synchronize plans between market and production sides

📌 Real Business Example: Danone

Danone uses S&OP as a core business process across 100+ countries. Their typical cycle includes:

1. Demand Review — reviewing forecasts, discussing deviations and root causes (promo, market, distribution)
2. Supply Review — reviewing capacities, logistics, risks, and constraints
3. Pre-S&OP — preparing balanced scenarios with financial impact analysis (P&L)
4. Executive S&OP — final approval aligned with strategic and financial goals

🔁 This cycle repeats monthly, supported by BI visualizations, SAP IBP templates, and leadership involvement.

🛠 ToolsSAP IBP S&OP Template

• Used to model demand-supply balance
• Visualizes gaps, risks, and opportunities
• Includes workflows: status, owner, deadline, comments

Decision Boards & Presentations

• Executive S&OP isn’t just about numbers — it’s about action
• Tools include: scenario comparisons, Plan B outlines, and margin impact charts

🚫 Myth Myth: Forecast = Supply Plan
Reality:

• The forecast is what we expect to sell
• The supply plan is what we can actually produce and deliver

These plans often don’t match, especially if:

• The plant is at full capacity
• There are raw material or logistics constraints
• Demand suddenly spikes

💡 The role of S&OP is to reconcile these two realities.
🧠 Practice TaskYou are a participant in S&OP at an ice cream company:

• Forecast shows +40% demand for July
• Plant is already running at 95% capacity
• Finance asks not to increase logistics costs
• Marketing insists on launching a new flavor

📌 What compromise would you suggest?
📌 What scenario would you present in the Executive Review?
📌 What risks should be recorded?
📌 Key Takeaways

S&OP is the heart of business planning, where numbers and people meet

• It’s not just Excel and slides — it’s a decision-making process
• A successful S&OP = everyone playing in rhythm, like a well-scored orchestra

📅 What is an S&OP Meeting?

An S&OP meeting is the core monthly planning event of a company. Its purpose is to align across departments on:

• Demand Forecast
• Supply Capability
• Financial Targets
• Executive Decisions

It’s not just number reporting — it’s a cross-functional decision-making process.

🧭 Meeting Agenda & Discussion Topics

Demand Review

Questions:

• Which categories/SKUs show deviations?
• Where did actuals outperform or underperform forecast and why?
• Are there unaccounted activities (promo, distribution, launches)?
• What’s changing in market dynamics, customer behavior, macroeconomic factors?

Key KPIs:

• Forecast Accuracy (%)
• Forecast Bias
• Volume vs LY (Last Year)
• % Promo Sales

Supply Review

Questions:

• Any production/raw material/logistics constraints?
• Can we fulfill the current forecast?
• Where are potential shortages or overstock?
• What’s our inventory level and turnover?

Key KPIs:

• Service Level
• Capacity Utilization
• Inventory Coverage (days)
• OTIF (On Time In Full)

Scenario Planning (What-if)

Questions:

• What if demand goes ±10%?
• Do we have a Plan B for supply disruptions or failed promotions?
• How do scenarios impact:
• sales volume,
• logistics cost,
• margin?

Tools:

• Excel / BI-based scenario planning
• Power BI dashboards
• Financial modeling

Executive Review

Questions:

• Which forecast becomes the official plan?
• What actions are approved and launched?
• What risks are recorded and who is responsible?

Outcomes:

• Finalized demand/supply plan for the period
• Risk register and action log
• Confirmed KPI targets

📝 Meeting Output

Every S&OP meeting ends with documented outcomes:

• Who owns what actions
• What data needs recalculating
• Which strategy goes forward
• Topics for next month's agenda