Ok, I think it is fairly clear I am a big fan of S&OP.  In companies without structure and process this is a way to establish a solid operational framework in a business and this does not actually cost a lot of money or need expensive or complicated IT. Even in more organised companies the S&OP discipline will enhance data and information flow and timeliness. Placing the best information in front of the right people at the right time will bring success.

Let us look at important requirements in some individual S&OP elements before considering the most important.

1. NPD/Product Change Review: What is coming down the innovation pipeline? Are the development and supply networks on time? When can the business expect the new product or adjusted product to be available?
2. Demand Review: What does the market want? What is being pulled off the shelves and not pushed into reluctant distributors or outlets? What can really be sold and not “what I need to sell to get my bonus”.
3. Supply Review: When compared against the demand signal, what is available? What is in transit and available to promise? What quantities are free to sell? What extra stocks above forecast can be made available?
4. Financial Review:Sales and Supply have a plan. How does this convert to top and bottom line performance? Is this in line with the company budget? Gaps are identified. 
5. Pre S&OP meeting: Now it is time for all the different functions to bring their best information to the same table and thrash out a consensus plan for proposal to the Board S&OP meeting – Sales & Operational Planning. There may be gaps and this team has to propose options to fill those volume/value gaps for consideration by the top team. 
6. Board S&OP meeting:No delegation in attendance. The senior team must receive the Pre-S&OP plan as a key part of the monthly business management meeting. Rarely will the Pre-S&OP proposal go through without need for debate. The top team has to decide on suitable initiatives to close any gaps and give the ok for resources to be deployed. The entire business then works to deliver the plan and start the process once again and again and again.

So what is the most important element here? All are certainly vital to any business wanting to get its skus onto the shelves for consumers to buy. However, if the demand signal is poor then the action you take will seldom be successful even if you work extremely hard. No, we are not looking for nor expect 100% forecast accuracy but any gross inaccuracy here turns the relationship between sales and the rest of the business into something like a pair of trousers flapping on a washing line in a force 10 gale – complete chaos and difficult to bring back under control.

What you really want your business S&OP to look like is a well oiled zip fastener that brings everyone and everything together smoothly and in time towards the same agreed objective.Is your business a pair of flapping trousers or a zip?