Supply Chain · Forecast
S&OP Meeting Design
Set up the monthly Sales & Operations Planning rhythm: demand review, supply review, and one reconciliation meeting with real trade-offs.
- Time1 h 30
- FormatTeam
- StageForecast
S&OP Meeting Design: what it is and why it works
Sales and Operations Planning (S&OP) is a monthly management process that aligns demand, supply and financial plans on a single set of numbers. This card sets up a lean version with three linked meetings. The demand review agrees an unconstrained forecast. The supply review tests that forecast against capacity, materials and inventory and surfaces gaps. The reconciliation meeting, which some organizations call the executive S&OP meeting, decides the trade-offs the other two cannot settle: which orders get priority, whether to add overtime or build inventory, and which service or cost targets flex. Decisions and open conflicts are written on one page and reviewed at the start of the next cycle.
S&OP works because many supply chain problems are not analytical but organizational. Sales is measured on revenue and wants stock; operations is measured on cost and efficiency and wants long runs; finance wants less working capital. Without a forum with authority over the trade-offs, each function optimizes its own number and inventory absorbs the conflict. The discipline of one dataset and a fixed calendar matters more than sophisticated tools. The process builds on a working demand review, draws on forecast accuracy data, and can later extend to customer collaboration such as CPFR. Its outcomes are tracked through a KPI tree linking service, inventory and cost.
What you need
- A monthly calendar with fixed dates for the three meetings
- A single consolidated dataset: forecast, open orders, inventory, capacity and key material constraints
- A named owner for each meeting and a senior leader with authority for the reconciliation meeting
- A planning horizon, typically at least several months ahead, at family level
- A short set of KPIs: forecast accuracy, service level, inventory, and plan adherence
What you get
- An agreed demand plan and a supply plan that is feasible or explicitly gapped
- A decision log of trade-offs with owners and dates
- A one-page summary of decisions and unresolved conflicts
- Follow-up on previous decisions at the start of each cycle
When to use it
When sales and operations each optimize their own number and inventories pay the price.
How to do it, step by step
- Fix one monthly calendar: demand review, supply review, reconciliation meeting.
- Bring one set of numbers to all three — same forecast, same inventory, same capacity.
- Give the reconciliation meeting authority over trade-offs: service, inventory, cost.
- Document decisions and unresolved conflicts in one page.
- Follow up on last month’s decisions before opening new ones.
Worked example: Launching S&OP at a packaging plant
Illustrative scenario — figures are realistic but not from a real company.
A plant producing corrugated packaging for food and consumer goods had frequent end-of-month rushes, with overtime on two lines while finished goods inventory stood at about 28 days. Sales and production each kept their own spreadsheets with different forecast figures.
- The general manager set the calendar: demand review in week one, supply review in week two, reconciliation meeting in week three, each lasting no more than 90 minutes.
- The planning team built one workbook combining the sales forecast, open orders, inventory by family and line capacity. The sales and production spreadsheets were retired.
- In the first supply review, the data showed that the forecast for printed boxes exceeded line capacity by about 12% over the next two months, while plain boxes had excess capacity.
- At the reconciliation meeting, leadership decided to pre-build plain box stock in the slack weeks, add one weekend shift on the printing line, and ask sales to steer two customers toward a later delivery window.
Result. Decisions were logged on one page and checked at the next meeting. After four cycles, end-of-month overtime dropped by about a third and finished goods inventory fell to around 21 days. The team found that the one-dataset rule caused the most resistance at first and delivered the most value later.
Common pitfalls and how to avoid them
- Letting each function bring its own numbers to the meetings.Build one shared dataset before the demand review and retire parallel spreadsheets.
- Holding a reconciliation meeting without anyone who can make trade-off decisions.Ensure a senior leader with authority over service, inventory and cost chairs or attends the meeting.
- Turning S&OP into a detailed scheduling meeting at item level.Plan at family level over a multi-month horizon; leave item scheduling to the master schedule.
- Opening new topics every month without closing previous decisions.Start each meeting by reviewing last cycle's decisions and whether they were carried out.
Frequently asked questions
What are the steps in the S&OP process?
A typical monthly cycle includes gathering data, a demand review to agree the forecast, a supply review to test it against capacity and materials, a pre-meeting or reconciliation step to prepare options, and an executive meeting to decide trade-offs. Many companies also add a product review for launches and phase-outs. This card condenses the cycle into three meetings for a first implementation.
What is the difference between S&OP and IBP?
Integrated Business Planning is generally described as an evolution of S&OP that integrates financial planning, portfolio and strategic decisions more fully, often with a longer horizon and stronger executive ownership. The monthly rhythm of demand, supply and executive reviews remains. In practice the labels overlap, and what matters is whether one set of numbers drives real decisions.
How long does it take to implement S&OP?
A basic monthly cycle can run within a few months once the calendar, dataset and owners are in place. Getting reliable data, trust in a single forecast and genuine executive decision-making usually takes longer, often several cycles or more. Starting simple, with one dataset and three meetings, and improving each month tends to work better than designing a complete process on paper first.
Origin
S&OP — Dick Ling and Oliver Wight, 1970s–80s.
Used in these playbooks
S&OP setup quarter 1 quarter
Install the monthly S&OP rhythm in one quarter: demand review, supply review, one reconciliation with real trade-offs.
Related methods
- Monthly Demand ReviewCompare forecast and actuals item by item, flag the big misses, and capture the reasons before re-forecasting.
- Collaborative Planning (CPFR)Share forecasts and plans with key customers and suppliers so the whole chain plans from the same numbers.
- Supply Chain KPI TreeDecompose one top goal — cost, service or cash — into driver KPIs each team can actually move.
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