Principles of Executive Sales and Operations Planning

  1. Hear from our customers:

    "I found the Principles of S&OP on your website to be very helpful  since we recently started the process.  The Study Guide has been helpful also.  Now  we are studying to get "Certified"."- Steve
    Executive S&OP requires the hands-on participation of executive management, up to and including the leader of the business (president, COO, CEO, general manager, managing director, etc.).

  2. Executive S&OP is a decision-making process that balances demand and supply at the aggregate level, aligns operational planning with financial planning, links strategic planning with day-to-day sales and operational activities, and sets the tactical direction of the business.

  3. The Executive S&OP planning cycle is monthly, with provisions for mid-period revisions when major changes occur. 

  4. Executive S&OP is an aggregate planning tool. It focuses on aggregate volumes, and only rarely looks at issues of mix, i.e. individual products, stock keeping units, customer orders and so on. 

  5. The volume plans authorized in Executive S&OP direct the plans and schedules for mix. Therefore, tight alignment between volume plans and mix plans is essential out to a point called the Planning Time Fence, inside of which individual product requirements must be known. 

  6. Executive S&OP must function in multiple units of measure – to support demand, supply, finance, logistics, and so forth. There must be tight alignment between the operating plans and the financial plans through appropriate unit of measure conversions into currency. 

  7. S&OP is cross-functional and collaborative. It involves, at a minimum, Sales/Marketing, Operations/Supply Chain, Product Development, Finance, and General Management. 

  8. Executive S&OP by its nature will trigger disagreement between various parts of the business, and thus an organization must learn how to openly welcome and resolve these differences. 

  9. S&OP puts a spotlight on accountability. The sales plans and operations plans in Executive S&OP represent commitments by Sales/Marketing and by Operations/Supply Chain respectively to achieve those plans.

  10.  Product groupings (families) in Executive S&OP should be based on how the marketplace views the company's products. Other processes exist within S&OP to convert those market-facing families into meaningful groupings for Operations and Supply Chain.

* Executive S&OP is the term given to the higher-level, volume planning section of the overall set of Sales and Operations Planning process.