The Pace Logistics Lab

Exploring Today’s Marketplace Through the Lens of Logistics

The Revival of Sales and Operations Planning

What is Sales and Operations Planning?

Invented almost forty years ago, Sales & Operations Planning (commonly referred to as S&OP) was conceived as a method to “force” isolated enterprise business units to work together. Across countless industrial sectors many companies’ business unit workflows and processes ran on their own – “in silos” – with little cross-functional communication and collaboration. Functions such as production, procurement, finance, and sales were on their own islands. 

Each would have their own “truth” or “North Star”, and perhaps none of these truths were guiding the business as a whole. S&OP was devised as the fix. The delivery of a single, reliable view of production and sales was the goal. Demand would drive supply. There would be no guessing about orders, resulting in driving out production cost inefficiencies. Demand planning, supply planning, and inventory management benefited.

How Sales and Operations Planning Works

In the early years of S&OP cross-functional teams would meet monthly, or sometimes even quarterly. Gradients of S&OP proficiency were created. The Sales & Operations Planning process included five levels: 

  • Sales forecasting
  • Demand planning
  • Supply planning
  • Plan reconciliation
  • Plan implementation

A level five S&OP practicing company demonstrated a thorough process up to and including extended supply chains with customers and suppliers included in the equation, and its finance function was fully engaged.

The Role of S&OP Planning in Today’s Marketplace

Fast forward thirty years. For many, S&OP became “so 80’s” and was considered a thing of the past. However, the last decade has witnessed the global supply chain adapting to rapidly shifting consumer trends, news cycles, geopolitical pressures, and escalated product innovation timelines. As e-commerce companies move toward a previously unthought objective of delivering ordered products in one hour, the pressures in the supply chain appear to escalate exponentially. Customized product demands add to the pressures. The time window from product conception to market is smaller than ever. Market share depends on finely tuned anticipation of consumer shifts and the ability to shift, scale, and respond rapidly.

In this landscape there is a renewed interest in the old-fashioned and fundamental S&OP. It seems that regardless of the latest deployed technology and systems, it’s ever more important to collaborate cross-functionally and to work from data and numbers that are “the truth.” In fact, that source of truth has never been more illuminating nor accessible than today with data and business intelligence opportunities at our fingertips. Working in silos was never a good thing. To compete in today’s marketplace, working in synergy across departments is the ticket to successful business outcomes.

Whether you call it Sales &Operations Planning (S&OP) or the more recently-dubbed Integrated Business Planning (IBP), what’s important is cross-functional collaboration with honest and agreed-upon data and an integrated effort. The S&OP process, when expertly practiced, provides discipline in knocking down silos. Running the five step S&OP sequential loop of sales forecasting, demand planning, supply planning, plan reconciliation, and plan implementation sets the stage for the achievement of operational and strategic business goals.  

The lesson? Sometimes an old-fashioned way of doing things proves to be a good way of doing things. Revisit Sales and Operations Planning as a strategy for breaking down silos and working collaboratively across your business.

Search
Latest Logistics Lab Posts

The State of Returns

Shoppers sent back nearly 17% of the total merchandise they purchased in 2022, totaling $816 billion, according to data from the National Retail Federation, up

Read More »

Privacy Policy

PACE takes your privacy very seriously; in general, you can visit PACE websites without telling us who you are and without revealing any information about yourself. There are times, however, when we may need information from you.

PACE does not rent, sell, or share personal information about you with other people or nonaffiliated companies except to provide products or services you’ve requested, when we have your permission, or under the following circumstances:

  1. We provide the information to trusted partners who work on behalf of or with PACE under extremely strict confidentiality agreements. These companies may use your personal information to help PACE communicate with you about offers from PACE and our marketing partners. However, these companies do not have any independent right to share this information.
  2. We have a parent’s permission to share the information if the user is a child under age 13.
  3. We respond to subpoenas, court orders, or legal process, or to establish or exercise our legal rights or defend against legal claims.
  4. We believe it is necessary to share information in order to investigate, prevent, or take action regarding illegal activities, suspected fraud, situations involving potential threats to the physical safety of any person, or as otherwise required by law.
  5. We transfer information about you if PACE is acquired by or merged with another company.

You may choose to give us personal information, such as your name and address or e-mail id that may be needed, for example, to correspond with you, to download our white papers or to provide you with a subscription. If you tell us that you do not want us to use this information as a basis for further contact with you, we will respect your wishes. We intend to protect the quality and integrity of your personally identifiable information.

We will make a sincere effort to respond in a timely manner to your requests to correct inaccuracies in your personal information. To correct inaccuracies in your personal information please return the message containing the inaccuracies to the sender with details of the correction requested.

Terms of Use

The following terms and conditions will be deemed to have been accepted by the User on usage of the website pacedelivers. You are requested to read them carefully before you use the services of this site.

  1. The term User shall refer to the user who is browsing the site. The term PACE shall refer to PACE Inc. The term Site refers to http://www.pacedelivers.com owned and monitored by PACE.
  2. By using the Site, you agree to follow and be bound by the following terms and conditions concerning your use of the Site. PACE may revise the Terms of Use at any time without notice to you. Areas of the Site may have different terms of use posted. If there is a conflict between the Terms of Use and terms of use posted for a specific area of the Site, the latter shall have precedence with respect to your use of that area of the Site.
  3. PACE may terminate User’s access at any time for any reason. The provisions regarding to disclaimer of warranty, accuracy of information and indemnification shall survive such termination. PACE may monitor access to the Site.
  4. All content present on this site is the exclusive property of PACE. The software, text, images, graphics, video and audio used on this site belong to PACE. No material from this site may be copied, modified, reproduced, republished, uploaded, transmitted, posted or distributed in any form without prior written permission from PACE. All rights not expressly granted herein are reserved. Unauthorized use of the materials appearing on this site may violate copyright, trademark and other applicable laws, and could result in criminal or civil penalties. PACE is a registered trademark of PACE Inc. This trademark may not be used in any manner without prior written consent from PACE.
  5. PACE does not make any warranties, express or implied, including, without limitation, those of merchantability and fitness for a particular purpose, with respect to any information, data, statements or products made available on the Site.
  6. The Site, and all content, materials, information, software, products and services provided on the Site, are provided on an “as is” and “as available” basis. PACE expressly disclaims all warranties of any kind, whether express or implied, including, but not limited to, the implied warranties of merchantability, fitness for a particular purpose and non-infringement.
  7. PACE shall have no responsibility for any damage to User’s computer system or loss of data that results from the download of any content, materials, information from the Site.
  8. PACE may change or discontinue any aspect of its website at any time, including its content or features. PACE reserves the right to change the terms and conditions applicable to the use of the Site. Such changes shall be effective immediately upon notice, which shall be placed on the Site.
  9. In no event will PACE be liable for damages of any kind, including without limitation, direct, incidental or consequential damages (including, but not limited to, damages for lost profits, business interruption and loss of programs or information) arising out of the use of or inability to use PACE’ website, or any information provided on the website, or in the Products any claim attributable to errors, omissions or other inaccuracies in the Product or interpretations thereof. Some jurisdictions do not allow the limitation or exclusion of liability. Accordingly, some of the above limitations may not apply to the User.
  10. User agrees to indemnify, defend and hold PACE harmless from and against all losses, expenses, damages and costs, including reasonable attorneys’ fees, arising out of or relating to any misuse by the User of the content and services provided on the Site.
  11. The information contained in the Site has been obtained from sources believed to be reliable. PACE disclaims all warranties as to the accuracy, completeness or adequacy of such information.
  12. PACE makes no warranty that: (a) the Site will meet your requirements; (b) the Site will be available on an uninterrupted, timely, secure, or error-free basis; (c) the results that may be obtained from the use of the Site or any services offered through the Site will be accurate or reliable.
  13. The User’s right to privacy is of paramount importance to PACE. Any information provided by the User will not be shared with any third party. PACE reserves the right to use the information to provide the User a more personalized online experience.
  14. The Site provides links to web sites and access to content, products and services from third parties, including users, advertisers, affiliates and sponsors of the Site. You agree that PACE is not responsible for the availability of, and content provided on, third party web sites. The User is requested to peruse the policies posted by other web sites regarding privacy and other topics before use. PACE is not responsible for third party content accessible through the Site, including opinions, advice, statements and advertisements, and User shall bear all risks associated with the use of such content. PACE is not responsible for any loss or damage of any sort User may incur from dealing with any third party.

We got your message!

Thank you – we’ll be in touch soon.

Thanks for your interest!

We will keep your information on file and let you know if an opportunity becomes available in your area.