Sales and Operations Planning

S&OP keeps marketing, purchasing, and finance working from one plan, so promotions do not outrun stock and inventory does not outrun cash. Each month, the team reconciles the demand plan with supply, warehouse capacity, and the budget, then records decisions. For example, if marketing plans a November promotion expected to add 8,000 units and the supplier needs 60 days plus a month of transit, the purchase order must be approved by early August. Without that meeting, the promotion may run on stock that never arrives.

Sales and operations planning was developed in the 1980s by consultants at the Oliver Wight firm, notably Richard Ling, to link sales forecasts with production and inventory plans.

What happens in an S&OP meeting?

The team reviews last month's forecast versus actual sales, updates the demand plan for upcoming promotions and launches, checks whether supply and warehouse capacity can meet it, and agrees on decisions such as extra purchase orders or markdowns.

What is the difference between S&OP and demand planning?

Demand planning produces the forecast. S&OP is the broader monthly process that takes that forecast and agrees on the supply, inventory, capacity, and financial plans to meet it.

Does a small ecommerce brand need S&OP?

Not a formal program, but even a small team benefits from a monthly meeting where marketing, operations, and finance review the forecast, inventory, and cash together. The habit matters more than the software.

• Demand ForecastingEstimating future sales by SKU
• Open-to-BuyOTBBudget left for buying new inventory
• Purchase OrderPOA buyer's order document to a supplier