Implementing S&OP - Recommended Structure and Steps

The DemandCaster 5-Step process is made up of multiple sub-steps that are executed at the beginning of each planning period.

When establishing your process it is important to consider who is responsible for each step of the process, what hand-offs will be required, what meetings should be scheduled, and how changes are communicated throughout the process. In addition, it is important to set a rule around how many forward periods (weekly or monthly) demand plan edits will not be allowed. This value is set in system settings.

Use the following process overview as a template to define roles, responsibilities, and timing of each step after the close of each month. The steps and responsibilities should then be loaded into a shared calendar with reminders, meetings, and attendees (responsibility) scheduled. Steps that are not tied to the beginning of the month and are managed on an ongoing basis are noted with the designation: On-Going.

DemandCaster Sales and Operations Planning Process

S&OP Roles and Responsibilities

Executive Management – CEO/Leader

  • Chairs the Exec. S&OP meeting and serves as ultimate decision making arbiter
  • Holds organization accountable to plan
  • Key contact for dispute resolution throughout S&OP process

Sales & Marketing Leader

  • Sets the expectation with the sales team members that they are going to perform sales forecasting and work to improve forecast accuracy
  • Owns and speaks to sales performance and forecast in the Executive S&OP meeting
  • Ensures that forecasting is a once per month (or periodic) process
  • Key contact for issues related to strategic sales/customer decisions

Demand Planner

  • Presents the demand plan information in a timely, fit‐for‐use, accurate condition
  • Does some of the pre‐plan analysis and statistical forecasting
  • Interacts with Sales to complete Data Collection and Demand Planning
  • Focuses on issues and disconnects with the future forecast
  • Key contact for issues related to roll-up of sales forecasts, analysis of forecasts and development of ultimate demand plan

Sales People

  • Gather intelligence from assigned customers and integrates findings into demand planning
  • Perform sales forecasting for their assigned customers, markets or other sales segmentation
  • Sales people must know the actual vs. forecast performance for sales, the reasons and the corrective actions
  • Update the sales forecast monthly and speak to the above in the corporate sales review meeting
  • Each individual will be the key contact for issues related to their segments’/customers’ detailed sales forecast #’s

Operations Leader

  • Set the expectation with the production and materials team that they will help with developing the supply plan according to the process and run to that plan
  • Ensures the aggregate level data to be presented is linked to all of the derived detailed planning
  • Chairs the monthly or periodic Supply Planning meeting
  • Speaks to inventory and backlog performance versus forecast in the Executive S&OP meeting
  • Presents the actual vs. forecast performance for inventory
  • Key contact for issues related to strategic operations/supply decisions

Supply Planning and Master Scheduling

  • Update the inventory plan monthly or periodically
  • Maintains safety stocks, production rates, vendor performance, lead times and other supply planning attributes
  • Speaks to the inventory detail in the Supply Planning meeting
  • Review orders, due dates and inventory and determines via analysis what to build, when to build and where to build per Supply Planning process
  • Key contacts for issues related to orders, inventory and Supply Planning Process

DemandCaster Demand and Supply Planning Progress Tool Bar

The S&OP process includes a tool-bar at the top of the Demand and Supply Planning view. It helps users easily see how the process is progressing through the planning workflow and follows the classic Wallace & Stahl S&OP work flow.

  1. Data Gathering is handled by the data load, revenue and statistics calculation, and any automation set in system settings related to S&OP. This step also includes additional analysis and optional processes as defined below.
  2. Demand Planning is handled in the Demand Planning step. As an option, you may also run the revenue and statistics step that calculates errors, average pricing, and others sales and cost values up and down the hierarchy.
  3. Once the Demand Plan is approved, the Supply Plan step is executed.
  4. The Supply Plan includes the Requirement Review step. Requirement Review is the rendering of Demand and Supply through a requirement plan to understand its impact on material and capacity. This information is used in the Pre-S&OP Meeting. A separate capacity review may also be run at this time.
  5. The Approval step follows the S&OP meeting. Once the plans are approved by management, the plan is approved in DemandCaster to drive the day to day requirement plan in DemandCaster and/or your ERP.

The toolbar sections illustrate what needs to be run via the color coding and timestamps. In short, anything that is yellow or red should be run prior to approving the plan. If a process is updated before step 5, all the subsequent steps need to be run again.

  • Green: Updated.
  • Yellow: Needs to be run. A process that precedes it has been run but there has been no change to the base data.
  • Red: Data out of date, needs to run.

Step 1: Data Gathering/Management

This step collects data on past sales, analyze trends, and assesses forecast accuracy. Much of these happen automatically via the regular data upload process and built in reports. Additional data maintenance steps noted in the steps below are performed manually on an ongoing as needed basis.


  • Who is Responsible? Demand Planner
  • Who will be Supporting? Sales and operations.
  • When are the process steps due by?

Step 1.1: Manage New Items or Existing Item Changes (On-Going)

This includes old to new linking and assigning new items to the planning hierarchy, and entering birth dates and discontinue dates for items being discontinued. These are typically directed by sales or product management.

Step 1.2: Run Analytics

At the beginning of the planning period, run the analytics as described in the Analytics Logic article. Please note that some analytics apply the change to the next requirement plan depending on the options set. For example, safety stocks may be updated depending on the method chosen. As a result, we recommend making changes to Order Points only after reviewing the results in the Order Point Review to determine if a change needs to be made.

Analytics may also be scheduled via DemandCaster's automation process.

Step 1.3: Review Performance Measures

This can be done within the the Demand and Supply Planning Interface or via the downloaded custom reports spreadsheets. Each level has a spreadsheet that may be downloaded to review results. Edits to the forecast may also be made within the spreadsheets after the appropriate columns are removed and uploaded back to DemandCaster.

Sales and/or operations input may be needed to help review and address performance issues or questions.

Step 1.4: Adjust Item Level Supply Attributes

After running the Analytics, review the results of the Order Point Review and make adjustments as required. Input from operations may be required during this step.

  1. Set the appropriate supply policies i.e. stocking requirements, lead times, etcetera. A description of the requirements are described in the basic order quantity logic article. Must review and maintain this data on a monthly basis at minimum. Any changes made in analytics will be immediately applied to the next requirement plan. Changes made in the requirement review step are sandboxed until S&OP approval as described below in the Requirement Review step.
  2. Determine the type of supply planning to apply: Demand Chase or Level Load. This can be applied by item or as an overall strategy in system settings that can be overwritten on a case by case basis. Demand Chase means that supply increases and decreases with demand on a period by period basis. Level loading means supply is level loaded between a beginning and ending inventory target.

Step 1.5: Review and Manage 4-P Plans (if applicable)

The 4-P plans are reviewed and adjusted as required. Unapproved 4-P's may be updated at anytime, however, going live (approving) the 4-P must be done prior to the next demand plan cycle commencing (prior to step 2). Input from Sales may be required during this step.

Step 2: Run New Demand Plan

Demand Planning includes validating forecasts, understand sources of demand, account for variability, and revise customer service policies;  Layer on 4-P Plans including promotion plans, one time events, and new product and customer launches. It is important to define who is responsible / accountable to report on sales performance and forecasts.

To run the Demand Plan click on Run Demand Plan button. The detailed steps to run a new Demand Plan are documented here in the Running a New Demand Plan article.


  • Who is Responsible? Demand Planner
  • Who will be Supporting? Sales / Sales management
  • When are the process steps due by?
  • Are any meetings required? Yes - review with sales either one on one with sales people or with a team as needed.

Step 2.1: Run Your S&OP Review Report

The S&OP Review Report is a report template built to the companies specific needs within Custom Reports. This should be defined when building the demand and supply planning process.

  1. Run on the pre-defined working day of the month.
  2. Go to Reports >> Custom Reports
  3. Click on your named report to regenerate and download.

A sample of such a report is provided below.

Step 2.3: Forward reports / questions to sales for input (optional)

Preparing and sending reports is optional. Those responsible for forecasting can review their own reports or view the results in app.

Step 2.4: Edit Demand Plans as Required

Based on the input of 4-P, performance measure reviews, and any sales related information, the demand plans are edited as required per the steps described in the demand planning process and the report review process above.

We recommend that a frozen period that is approximately equal to the longest cumulative lead time be established to prevent editing of demand plans within lead time. With this said, we recommend at least one month frozen period be applied in system settings.

Step 2.5: Review and Finalize Consensus Demand Plan

On the pre-defined working day of the month, the demand planning meeting with sales is held.

This is accomplished in a demand planning meeting with sales management and sales as required. A suggested agenda is offered below:

  1. Past month’s performance is reviewed, reasons for off-plan performance are discussed and corrective actions are identified.
  2. The data submitted by the salespeople or provided statistically is reviewed, modified if necessary, and agreed upon
  3. Quantitative based assumptions are stated as to why the numbers are the way they are
  4. Once approved, meeting output is the unconstrained demand plan (or sales forecast).

Please note an unconstrained demand plan is a shipment forecast that has not had any supply limits applied against it.

Step 3: Supply Planning - Prior to demand plan approval

By the pre-defined work day of the month, the supply planning step is completed.

Supply Planning is the process of translating the Demand Plan into an appropriate Supply Plan. The process includes consideration for ending inventory targets, safety stock levels, and level loading and demand chase production methods to name a few. It also includes assessing the ability to meet demand by reviewing available capacity, inventory, and scheduling required operations via an explosion of the plan through bill of materials.

To run the Supply Plan click on Run Supply Plan button. The detailed steps to run a new Supply Plan are documented here in the Running a New Supply Plan article.


  • Who is Responsible?
  • Who will be Supporting?
  • When are the process steps due by?
  • Are any meetings required? Only if input is needed on setting new safety stocks and supply plan attributes.

Step 3.2: Review Requirement Review Results and Capacity Plan (optional)

  1. Upon completion of supply plan, review requirement review and assess any shortages or issues that necessitate a change in the demand plan
  2. Run capacity plan and identify any capacity issues as required.
  3. Make any supply adjustments in capacity planning and requirement review as necessary. These changes will be sandboxed until S&OP approval.

Step 4: Reconciliation of Plans - Pre-S&OP Meeting

On the pre-defined work day of the planning period, the Pre-S&OP meeting is held.

Recommended Agenda:

  1. Sort through supply side issues to determine if the sales plan can be accommodated and inventory and backlog objectives can be met
  2. Supply performance from the previous month is reviewed and forecasts are presented
  3. Any materials, capacity, supplier, and/or tooling issues that surface are discussed and resolved (or escalated)
  4. The primary outputs are production rates by line or cell and production rates for key suppliers
  5. Sales people will be called in to revise the sales plan based on unsolvable capacity or constraint (i.e., material) issues.
  6. Roll all information together to prepare financial model and any associated investments in inventory or capital goods.


  • Who is Responsible? Head of Supply
  • Who will be Supporting? Sales and operations folks as needed
  • When are the process steps due by?
  • Are any meetings required? Yes, Pre-S&OP meeting

Step 5: Finalize and Release - Executive S&OP

Once the demand and supply plans are reconciled and finalized, the result is presented to the executive team. Following the KISS principle should be used as a guide.

The Executive S&OP meeting is held on around the 10th day of every month. The output of the meeting is a final demand and supply plan that is approved in DemandCaster.


  • Who is Responsible? S&OP Leader
  • Who will be Supporting?
  • When are the process steps due by?
  • Are any meetings required? Yes - Executive S&OP meeting

5.1: Suggested Executive S&OP Agenda

  1. Review S&OP Calendar – Critical Dates
  2. S&OP Aggregate Summary
    1. Actual to Plan Budget, Sales, Supply
    2. Performance Metrics – on time, stock-outs, and inventory levels (excess and obsolete)
    3. Review applicable action items related to this section
  3. Last Month Performance - Actual to Plan Review by Category
    1. Sales and Operations Deltas
    2. Causals
    3. Inventory
    4. Utilization
    5. Review applicable action items related to this section
  4. Review 12 Month Rolling Demand and Supply Plan by Category including;
    1. Short term concerns
    2. Capacity and scheduling challenges and plan of action
    3. New products introduction
    4. New or lost critical customers
    5. New or lost critical suppliers
    6. Product transfers from one facility to another
    7. Inventory and supply projections / targets
    8. Other major risk factors in the business
    9. Review applicable action items related to this section
  5. Summary of new Action items
  6. Final approval

5.2: Approve S&OP

Once the S&OP plan is approved with any required adjustments, the plan is approved in DemandCaster to allow the new plan to drive the Requirement Plan. The plan is the approved demand plan (forecast) from S&OP and supply plan safety stock, inventory target, and level loading objectives.

The output from DemandCaster to the ERP (if DemandCaster does not run the requirement plan) could be the supply plan master production schedule, forecast by item by location, safety stock by location, and any changes in planning attributes.

Activities Between Planning Cycles

As noted, there are a number of activities that can be managed between Demand Planning Cycles. For example, updating 4-P plans and making changes to lead times and safety stocks and other parameters as needed.

One question that is often asked is how are short demand changes handled to ensure supply will be in sync. In most cases, the requirement plan will automatically adjust its requirements as real demand is entered. However, we do recommend running a supply plan on a weekly basis and making adjustments as necessary to update the MPS.

Another option is to make Demand Plan edits in the item Requirement Planning interface on an as needed basis to address short term demand that was not accounted for during the S&OP process. However, any changes made in Requirement Planning will not be propagated back to the Demand Plan. The edits will be overwritten with the next S&OP approval because the S&OP is the definitive Demand Plan source and the Requirement Plan edits are more short term reactive changes. If the edit is more long term in nature (beyond the frozen Demand Plan period) we recommend adding the edit to the Demand Plan in advance of the next approval.

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