Software for Sales & Operations Planning

Sales & Operations Planning (S&OP) is an integrated business planning process that aligns strategic goals with day-to-day objectives by optimally balancing supply and demand. The goal of S&OP is to establish regular, cross-functional coordination meetings between sales, procurement, logistics, and production, and to align them with a common plan. This creates a uniform, transparent basis for decision-making that takes into account both market requirements and capacities. Sales & Operations Planning is used to avoid bottlenecks, increase service levels, and optimize costs by linking forecasts with realistic production and delivery capacities. To implement S&OP as effectively as possible, an increasing number of companies are using specialized S&OP software that enables continuous, transparent management and evaluation of planning results.

The monthly S&OP process is individually tailored to the specific challenges of each company. As an example, it can be broken down into the following five steps:

• Collect and evaluate information: All information regarding past sales as well as marketing, sales, production, purchasing, and logistics activities is collected, sorted, and evaluated for relevance. Market and competitive intelligence is also taken into account in this step.
• Demand Review: The performance of current sales is analyzed, while simultaneously forecasting how items and product groups are expected to sell across different countries and channels. The figures are then compared to determine whether more or fewer goods were sold than planned. Based on this forecast, an optimal demand plan is derived for purchasing, production, and logistics. Constraints due to limited capacity are not yet taken into account at this stage.
• Supply Review: The utilization of purchasing, production, and logistics capacities is reviewed to determine whether the demand forecast by sales and sales planning can actually be met with current resources. Among other factors, personnel capacity, logistics capacity, and production machinery capacity are taken into account. In this step, the supply plan and demand plan are reconciled and aligned.
• Pre-S&OP-Meeting: A target-actual comparison is conducted, deviations are analyzed, and, if necessary, recommendations for action are developed for senior management. The goal of the Pre-S&OP Meeting is to create a decision-making document for senior management.
• Executive S&OP-Meeting: The decision-making document, which outlines the current situation and includes recommendations for action, is presented and discussed. The measures developed take into account the associated opportunities and risks. Management makes its decision, thereby immediately giving the go-ahead for the operational implementation of the proposed steps, and, if necessary, adjustments are made to the plans.

S&OP software is a specialized IT solution that digitally maps and supports all phases of Sales & Operations Planning. It links relevant data from sales, production, warehousing, and finance into a central platform, thereby creating a single source of truth. The S&OP software ensures that all stakeholders work with the same, up-to-date information, enabling them to centrally plan and coordinate supply and demand. It complements the theoretical preliminary considerations and provides employees with integrated tools—for example, for sales planning, replenishment planning, logistics and production planning, etc.—that support them in their specific tasks within the overall process as well as in team coordination. Modern S&OP software also offers features such as strategic budget planning, merchandise planning, rolling sales planning, AI-based forecasts, automatic replenishment, and size and variant codes.

Yes, with its Sales & Operations Planning software, REMIRA offers a complete solution for robust and holistic planning. The standard system is an add-on for any common ERP system and, as a cloud solution, can be quickly adapted to a company’s processes without programming. The software offers full flexibility and an exceptionally broad range of functionalities, from planning and forecasting to replenishment. Industry-specific input data can also be incorporated, helping to ensure high-quality demand planning. REMIRA’s S&OP software serves as the hub for sales, product management, procurement, marketing, production, and logistics.

S&OP Software optimizes the development and integration of sales, production, procurement, and logistics planning, as well as product management. It improves planning and increases transparency and control over business processes. In addition, deviations or market changes are identified early, and appropriate measures can be implemented more quickly. By using S&OP software, companies gain a competitive advantage because the best possible information is consolidated, and everyone is on the same page (one-number principle). All of this leads to sustainable inventory management while avoiding out-of-stock situations.

With S&OP software, companies can therefore...

• achieve higher inventory availability while simultaneously reducing working capital,
• ensure the achievement of corporate goals,
• obtain reliable planning figures through AI-based forecasting,
• digitize and automate their processes,
• conduct planning holistically and in an integrated manner across all departments and processes,
• create a better focus through management by exception,
• identify opportunities and risks early on,
• reduce time-consuming, manual work.

S&OP aims to achieve optimal alignment between demand, supply, production capacity, and inventory levels. Other key goals include greater planning accuracy, faster and better decision-making, lower inventory levels, and improved delivery capability. In addition, costs are reduced and greater transparency is created throughout the supply chain. S&OP helps ensure that planning errors are identified early and corrected in a targeted manner, which not only increases efficiency but also improves the speed of response to market changes. In the long term, a professionally implemented S&OP process also helps secure the company’s strategic competitiveness and establish stable decision-making structures within the organization.

S&OP focuses on operational planning, while IBP (Integrated Business Planning) builds upon these core processes by also linking long-term business strategies, financial planning, and product and portfolio developments.

Differences between S&OP and IBP at a glance:

• S&OP aligns supply and demand in the short to medium term, with a focus on sales, operations, and finance. IBP takes a more comprehensive approach that aligns financial, strategic, and operational plans over the long term.
• S&OP optimizes inventory levels and production capacities to efficiently meet demand. IBP aligns operational plans with strategic goals, focusing on overall business performance, profitability, and growth.
• While the S&OP approach is typically led by supply chain managers, IBP is championed by senior management and driven by finance leaders.

IBP creates greater transparency and flexibility, particularly in companies with complex, international structures. Both S&OP and IBP aim to optimize collaboration across departmental boundaries. However, IBP is more strongly focused on strategic decisions and company-wide value creation.

S&OP software is particularly useful for medium-sized and large companies with complex supply chains and fluctuating demand. Companies in retail, manufacturing, and logistics, in particular, benefit greatly from the possibilities of structured, collaborative planning processes thanks to S&OP software. In general, implementing S&OP software is beneficial for companies that want to improve the quality of their forecasts, optimize inventory, and enhance collaboration between sales, supply chain management, and finance. Companies with large networks of locations, international markets, and extensive production and distribution networks also achieve measurable efficiency gains through the use of S&OP software. The REMIRA S&OP software is particularly well-suited for retail, wholesale, manufacturing, food, fashion, and logistics-related industries. The solution is especially relevant for companies with complex inventory and planning processes. Some software providers, including REMIRA, offer modular S&OP solutions that are also suitable for smaller companies.

S&OP software uses data analytics and forecasting models to improve forecasts. The analysis of historical sales and order data is made possible by the AI and big data approach of S&OP software solutions. By combining historical data with current market information, forecasts are continuously optimized. Deviations can be identified early and corrected accordingly.

When companies want to implement Sales & Operations Planning, three factors must be considered holistically: the PPS success formula. The S&OP implementation is a change management process.

The PPS success formula:

• Process: Sales & Operations Planning is first and foremost a conceptual approach. The fundamental prerequisite for success is establishing a structured, integrated, and transparent process with clear responsibilities for each step. It helps make decisions significantly faster. An efficient S&OP process is a crucial foundation for companies to gain a competitive advantage.
• People: The second success factor is the company’s employees. They are an integral part of the S&OP process and must fully support it and the procedures defined within it. In the individual process steps, they collect data, evaluate it, and thus create the basis for decision-making for the executive board.
• System: A major success factor is choosing the right S&OP system. The greater the need for coordination to align products with market demand, the more advisable it is to implement a specialized solution that can map the processes out of the box without requiring extensive customization.

After carefully selecting the right S&OP system and completing the preparatory work, the software is implemented in phases. Employees must be trained by the software provider so they can work independently with the software. A pilot phase ensures that potential issues can be identified and resolved before the rollout or go-live.

S&OP software improves, among other things, forecast accuracy, customer service levels, inventory metrics, and plan variances. These and other KPIs (Key Performance Indicators) help to measurably manage the planning and implementation of S&OP within the company. Forecast accuracy, in particular, can be significantly increased through consolidated data and automated analyses, leading to better demand and production planning. At the same time, inventory metrics such as inventory turnover and stock coverage are optimized, as excess inventory and stockouts can be identified and resolved early on. The customer service level—that is, on-time order fulfillment—improves because the entire supply chain becomes more transparent and coordination processes are made more efficient. Lead times and planning cycles are also reduced, as S&OP software enables faster processing and analysis of relevant information, allowing decisions to be made more quickly.

Yes, modern S&OP software is generally cloud-based these days. The REMIRA S&OP software is also a cloud solution, enabling fast access, easy updates, and high flexibility as requirements grow. The REMIRA S&OP software utilizes the latest technology, supported by AI. In addition to proven algorithms, it also features new AI functions to further improve forecasts and automate processes.