The Monthly Process Guide for your Sales and Operations Planning (S&OP) Process

Our last article, Stop Avoiding Product and Family Design in your Sales and Operations Planning (S&OP) Process, we identified the key characteristics required to have an effective Executive S&OP process, particularly around the design of product families. In this article, we will dive into the best steps to follow for an S&OP monthly process.

Overview of the Executive S&OP Four‑Meeting Monthly Process

The monthly meeting cycle provides a data-driven decision-making framework to move from an unconstrained demand plan through to a balanced family plan. The process culminates in the Executive S&OP meeting where the business leader signs off on the proposed plan. The diagram below shows the meeting cycle.    

A brief outline of each step in the process and how it is tied to establishing RACI is provided below. For each meeting, the steps, outlined as a checklist, should occur to move you through a well-executed S&OP process.

Additionally, the accountability and responsibility within a RACI (responsible, accountable, consulted, and informed) framework should be clearly defined for each meeting. Accountability refers to the person that is held to account for the outcome of the process (the final plan), while responsibility refers to the person that that makes sure the task gets completed or develops the plan.

At DBM, we provide your team with coaching and the tools needed to run an effective S&OP process. One of our key tools puts all the critical data in one place on the 5-Section Sheet so your team can get to the true story of the business. Throughout this article, we use the 5-Section Sheet to show which plans to focus on for each meeting.

1. Pre-S&OP Demand Meeting:

   • Meeting Checklist:

     • Review last month’s performance

     • Review bookings, shipments, and backlog plans by demand stream

     • Check reasonability of overall demand plan (sum of the demand streams), adjust if required

     • Update Risks and Assumptions

     • Approve unconstrainted demand plans

   • Outcome: The outcome of the pre-S&OP demand meeting should be an unconstrained demand plan. This plan should include projected bookings, shipments and backlog and be segmented by major demand types (demand streams).

   • Accountability: Sales Leader (VP of Sales)

   • Responsibility: Demand Planner/S&OP Coordinator

2. Pre-S&OP Supply Meeting:

• Meeting Checklist:

  • Review last month’s performance

  • Determine ability to support the unconstrained demand plans, create constrained plan if required

  • Update Risks and Assumptions

  • Approve supply plans

• Outcome: The primary output is an agreed-on supply plan by family and site that respects your current or planned capability. In the case that supply is constrained, a recommended constrained shipping plan should be developed.

• Accountability: Operations Leader (VP of Operations)

• Responsibility: Master Scheduler or S&OP Coordinator

3. Pre-S&OP Meeting:

• Meeting Checklist:

  • Finalize plans

  • Identify any unresolved issues

  • Identify the story for each family

  • Finalize Risks and Assumptions

• Outcome: A proposed plan for each family that includes: a constrained shipping plan, booking and backlog plans, production (supply) plan, inventory plan, and capability plan.

• Accountability: Team ownership by VP of Sales and VP of Operations

• Responsibility: S&OP Coordinator

4. Executive S&OP Meeting:

• Meeting Checklist:

  • Review plans family by family

  • Issues needing resolution are presented

  • Action items captured

  • Agreed sign off on each family plan

• Outcome: Plans for each family, site, and identified actions to achieve these plans are agreed on.

• Accountability: Business Leader (CEO/President)

• Responsibility: S&OP Coordinator

Recommendations

• Define clear ownership and outcomes for each meeting of the process. This will ensure the right people are present and there are clear objectives in the meeting.

• Ensure that people come prepared to each meeting. For example, the demand meeting is not where the demand plan is developed, but rather where it is reviewed, validated, and agreed on. This means that data should be prepared and available in advance of each meeting (at least 24 hours recommend) to ensure that all can review it before coming to the meeting.

• Schedule the meetings six to twelve months in advance. This will ensure that the meetings get on peoples calendars well in advance, so schedules can be worked around the S&OP meetings.

• Allow time between the meetings for preparation and to resolve issues.

• Measure your adherence to the cycle. We recommend three areas for this: Participation, Data and Schedule (see our article: The S&OP Meeting Scorecard: Measuring the Fundamentals of S&OP).

Establishing a monthly cadence, along with the recommendations, will be foundational for your S&OP process. The monthly process is just one of the key elements that make your S&OP a more effective process and help increase executive engagement.

You also can watch our related video, S&OP Process Explained: Monthly Process, Best Practices & Meeting Structure, which expands on implementing these points into your S&OP process.

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