S&OP Principles: The Foundation for Success

A Word about Terminology: The common usage of the term “Sales & Operations Plan- ning” has broadened to include tools and techniques that operate at both the aggregate and the detailed levels of supply-chain man- agement. In this piece, when we use “S&OP” we’re talking about the executive component of Sales & Operations Planning, which deals with aggregate or volume planning involving top management.

S&OP continues to be one of the most pro- lific targets on the corner-office radar screen. That’s because it’s one of the most perfor- mance-enhancing activities an organization can undertake.

While S&OP is fundamentally a simple pro- cess, it is not easy to implement correctly. “Simple” and “easy” are very different when it comes to application, and being simple is far from easy. This column will present 10 simple principles that form the foundation for success with S&OP. We will explain why they are important, how they get complicat- ed by their application, and how companies have effectively applied them.