supply chain

Sales & Operations Planning (S&OP)

Harmonising Supply, Demand, and Strategy

An effective S&OP process is a powerful tool that aligns supply and demand plans over the mid‑ to long‑term horizon. At EAL, our consultants design and deliver S&OP frameworks that not only balance operations with sales but also integrate financial reporting, market planning, new product development, and business strategy.

While S&OP has been widely deployed since the 1980s, its role has evolved from a simple supply‑demand balancing act into a comprehensive business‑wide process. Today, it is often referred to as Integrated Business Planning (IBP), reflecting its expanded scope across finance and strategic direction.

The best S&OP processes are built from the ground up — tailored to the unique needs of each business. We work closely with stakeholders to design platforms that reflect functional nuances, ensuring consensus across departments. Importantly, S&OP is not about buying a system first and then shaping a process around it. Instead, it’s about designing a bespoke process, testing it, and then configuring systems to support it.

By deploying this approach, we help organisations achieve clarity, alignment, and confidence in their planning, enabling them to respond to market changes with agility and precision.

Our approach

We Deploy a 5-step S&OP Process

S&OP is a series of logical steps deployed each month to ensure that the functions within a business are all working towards the same goals. As a minimum, S&OP should be comprised of a 5-step process.

1. S&OP Portfolio Planning - What do you plan to sell

The S&OP process needs to be based on an accurate reflection of the company’s product portfolio. Each month, as the first step in the S&OP process, the portfolio should be reviewed with the aim of flagging new product introduction, identifying delist requirements, adding new SKUs and updating ABC classifications. The reviewed and validated portfolio can then be used as the foundation for the next step, Demand Planning.

2. S&OP Demand Planning - How much do plan to sell ?

In this step the unconstrained demand forecast is developed and agreed. This is where the long-term sales forecast is updated, including baseline growth or contraction, new product impacts, market promotions and extrinsic trends. For a truly effective S&OP process this demand plan should focus on a mid-to-long term horizon, usually at least a rolling 18 months at an aggregate level i.e. product families. The longer the planning horizon, the better it is for the supply chain. New assets such as warehouses and production facilities can have a long commissioning lead time: A S&OP process looking at just 6 months is of little use if it takes 12 months to commission new assets.

3.S&OP Supply Planning - How will you supply the planned sale ?

Using the information from Step 2 the operations team now review how they will meet the required demand plan and what level of resource will be required. These resources may include people, handling equipment, material, production equipment, warehouse capacity and transport capacity. If there is significant growth in the Demand Plan from Step 2, then the Supply Planning Step can require a significant level of operational modelling. Of course, it’s relatively easy to be reactive with resources in supply chain. Temporary labour, vehicle spot-hire and 3rd party storage can all be deployed quickly as a contingency measure, but at an additional, and usually unbudgeted, cost. Instead, when given the opportunity to plan events through an S&OP process, the supply chain and operations teams can ensure that demand fluctuations are planned for more efficiently. warehouse capacity and transport capacity. If there is significant growth in the Demand Plan from Step 2, then the Supply Planning Step can require a significant level of operational modelling. Of course, it’s relatively easy to be reactive with resources in supply chain. Temporary labour, vehicle spot-hire and 3rd party storage can all be deployed quickly as a contingency measure, but at an additional, and usually unbudgeted, cost. Instead, given the opportunity to plan for events through an S&OP process, the supply chain and operations teams are able to ensure that fluctuations in demand are more efficiently planned for.

4. S&OP Optimisation - Balancing Sales and Supply

In Step 4 the key stakeholders involved in the first three steps meet to discuss the outputs of their respective steps and agree the ‘non-negotiable’ elements alongside the trade-offs. For example, the demand plan may reflect a sales forecast that will exceed production capacity for a short period of time. In the Supply Plan this sales requirement may have been met by using overtime, or external production capacity at additional cost. However, it may be agreed during this optimisation step that the forecast can be met by pre-building inventory in a quieter period and hence the requirement can be met at a more favourable supply cost.

5. S&OP Executive approval

Step 5 is the opportunity for the company’s executive team to review the plans from the preceding steps and provide decisions where required. This may encompass reviewing the Demand Plan to ensure it fits with the business strategy and authorising requirements within the Supply Plan that may incur additional costs i.e. new equipment, premises, inventory, outsourcing capacity etc. Any changes or decision made at the Executive approval stage are then fed back to all stakeholders and incorporated within the planning of the next S&OP cycle.