S&OP

What is S&OP?

S&OP (Sales and Operations Planning) is a recurring monthly planning process in which sales, production, procurement, finance, and company leadership jointly align the sales plan with real capacity and financial constraints. The result is one consensus plan — how much will be sold, how much will be produced, how much will be purchased, and how much it will cost — over a horizon typically of 12 to 18 months.

A typical S&OP cycle in a mid-sized company has five phases: (1) data preparation and forecast update, (2) demand review with account managers, (3) capacity review with production and procurement, (4) financial review, and (5) the executive S&OP meeting where the final decision is made. A well-functioning S&OP dramatically reduces both overstocking and stock-outs.

When it is used

S&OP makes sense from the size where sales forecasts stop “sorting themselves out” — typically from around 30 employees, and earlier in seasonal businesses. It is introduced primarily in manufacturing, distribution, and FMCG.

See the Planning module and the distribution industry page.

Related terms

• MRP — follows S&OP at the operational level. See /en/glossary/mrp.
• ERP — S&OP runs on top of ERP data. See /en/glossary/erp.
• Gantt chart — visualisation of the S&OP outcome. See /en/glossary/gantt.

In Modulario

In Modulario, S&OP can be implemented in the Planning module — forecasts are imported from CRM, capacities from Production, and financial impact from Accounting. The dashboard displays differences between plan and actuals at product group level.

The S&OP dashboard in Modulario displays a forecast vs. actuals comparison at SKU and product family level, flags capacity bottlenecks, and allows scenario simulation (“what happens if sales raises the forecast by 15%?”). Once the S&OP plan is approved, the outputs automatically flow into the operational MRP cycle in the Production module.

A growing trend is IBP (Integrated Business Planning) — an extension of S&OP incorporating strategic and financial planning with a 2–3 year horizon and scenario modelling. Gartner estimates that companies with a mature S&OP/IBP have 15–20% lower inventory at the same service level.