What is Sales and Operations Planning? An Overview of S&OP Best Practices

Many organizations say they have an sales and operations planning (S&OP) process.

The real question is whether the S&OP process is built on best practices that drive measurable results, or whether it's simply a recurring set of meetings and reports.

When you invest significant time and effort into S&OP, it’s essential to ensure the process aligns with proven practices that create a more aligned organization.

At the center of good S&OP is one non-negotiable truth: an effective Executive S&OP process is one where the person who is managing the business (Senior Executive, CEO, President etc.) is also leading the S&OP process. If this isn’t happening, the business needs to figure out why and adjust.

What is Sales and Operations Planning?

S&OP is a management decision making process that provides management the ability to strategically direct their business to achieve a competitive advantage on a continuous basis.

Without executive engagement, you are not unlocking the full potential for Executive S&OP as a decision-making management process.

4 Must-Ask Questions to Improve Your S&OP Process

1. Is your Senior Executive engaged? Do they require the monthly Executive S&OP meeting?

2. Does your team make decisions in the S&OP meeting (It’s not a report out)?

3. Does your S&OP presentation cover the entire business in 1 hour to 1.5 hours?

4. Does everyone walk out of the meeting on the same page and know what they need to do to execute the plan?

If you answered “yes” to the questions above, it is very likely you have an effective S&OP process.

If you answered “no,” there's room for improvement, and the fastest path forward is implementing a set of key S&OP best practices.

8 Best Practices for Effective Executive S&OP

1. S&OP Family Structure 

• All the decisions (flow rate, buffers, accountability) are set by family.

• Families are segmented by constraint

• The families are consistent across sales and operations

• Families are discussed in the same units of measure throughout the S&OP presentation

2. Monthly Process

• The monthly process is regular and purposeful: a plan is created, then executed, results are assessed, then next month, the plan is redone or adjusted

• The monthly cadence supports accountability and forward planning across the planning horizon.

• The planning process should move from unconstrained demand, to supply, to constrained demand, and end with the Executive meeting

• The plan should be well documented and understood by the team

3. Executive Presentation  

• As the culmination of the monthly process, the Executive Presentation – where the decisions are being made – is where the executive intersects with the process

• The structure and format must provide a clear “story” for the business (by family) in the past, present and future with supporting data

• The presentation follows a standard format that covers the S&OP plans family by family for Sales and Operations

4. Planning Horizon  

• Since S&OP is a forward-looking process, it needs to support planning far enough out in the future to support both execution and strategy

• This should be at least 12-months rolling and cover the cumulative supply chain lead time (CSCLT)

• The team needs to understand the planning zones – where changes can be made and the trade offs of a change

  

5. Responsibility and Accountability

• Accountability (who the executive is expecting to deliver the results) and responsibility (who has to get it done) for the plan is clearly defined and documented

• Sales owns the booking plan, Operations owns the supply plan and the shipping plan is an outcome of the process

• If the plans are out of tolerance – the accountable person should know why. This is understood by everyone and reinforced by the executive

  

  
  

6. Supporting Data

• The S&OP process pulls data from your ERP system

• If the data is bad, S&OP should highlight that a data clean-up needs to happen

• Actual historical data (bookings, shipments, aged backlog, production) is used to evaluate the performance to plan

  
  

  

7. Measurements

• S&OP should deliver results like improved customer service, reduced expedited freight, right-sized inventory

• Before you get results, you need to make sure you are doing the right things (a good process) and the right things are being done right (effectively)

• Measurements are used to improve the process, and reinforce accountability

• Measurements should be at three levels: the process, effectiveness, results

  • Process measurements include tracking meeting attendance and data gathering

  • Effective measurements evaluate plan accuracy

  • Results should be tied to families so that they are actionable.

    
    

8. Executive Engagement (Ownership) 

• The person running the business uses the Executive S&OP meeting as a critical management meeting

• They attend and/or run the meeting, hold the team accountable, and sign off on the S&OP plans.

  

Incorporating these elements ensures a more effective implementation of your S&OP process and increase executive engagement

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Watch our related video, Good S&OP: 8 S&OP Best Practices, which also covers implementing these points into your S&OP process.

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Build a Strong, Future‑Ready S&OP Process

An effective S&OP process aligns your teams, empowers leaders to make confident decisions, and drives measurable business results. Our emPPPower program provides the structure, tools, and hands‑on support you need to build a sustainable process—every step of the way.

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