Sales and operations planning (S&OP)is an integrated business management process through which companies are able to focus resources toward the achievement of its end goals. S&OP begins with a FORECAST of expected sales which then become the basis for inventory planning, capacity planning, staffing, supply chain requirements, and ultimately the forward looking financial plan of the company to include profit and loss, cash flow, capital investment and balance sheet performance. 

With historical sales as the basis , a statistical model uses that history to predict future sales or demand across a rolling time horizon, typically two years, and to this statistical model managerial intelligence is added.  The result is the Managerial Forecast. The primary focus is on longer term future actions and anticipated results that all work toward achieving the company’s objectives. 

There are software tools that are designed to generate these forecasts, but the capability of generating a useful forecast resides in Excel.  Models can be designed based on the specific requirements of the company.  Using Excel functionality, products and customers can be included or excluded in the forecast using filtering, seasonality calculated and accounted for, and  either unit/case and/or dollar forecasts generated. 

S&OP is very useful cross functional tool benefiting management, operations, HR, finance, sales, marketing, and supply chain partners as it provides a plan against which coordinated action can be taken.

CategoryMaster can work with you to define and establish your S&OP process beginning with a demand forecast, from which a more robust process can be built.