Sales and Operations Planning (S&OP) is probably the most important planning process of any company. It will determine the difference between success and failure in the years to come.

Usually, the S&OP includes a list of open sales deals, an updated sales forecast, production plan, inventory plan, customer lead time (backlog) plan, new product development plan, strategic initiative plan and the resulting financial plan.


Simplified, S&OP designates business planning at a strategic level. Sales & Operations Planning has two primaries, close-related elements: sales planning (related to sales and marketing) and operations planning (related to order-fulfilment, stock and logistics).

The chief goal of Sales & Operations Planning is to bring the three most essential but competing company’s goals into line: customer satisfaction, inventory optimisation and sales productivity. S&OP is an integrated business process that touches every aspect of the short and long-term well-being of an enterprise. It forms the basis for a demand-oriented planning, a trouble-free sales planning and the financial development of the business.

Companies not paying enough attention to its S&OP will face tough choices between making customers happy or increasing sales productivity, for the S&OP links monthly sales and marketing planning directly to the operations side of their business.

Chance does not determine the success of an S&OP. A successful S&OP starts with a deterministic approach to sales planning. Companies can implement it successfully according to given rules. In this article, we present you with the five most important Qymatix’s principles for successful S&OP – known as the SALSA principles for Sales & Operations Planning: Simplicity, Analytical, Loved, Standardized, Action-Oriented.

Principle 1: Your Sales & Operations Planning should be SIMPLE.

Simplicity is an essential principle in any planning process, and it is critical in S&OP. Sales and planning teams will follow a simple process. Moreover, a simple process will add more value to an organisation than a complex one. It is a well-known fact in B2B that sales teams love straightforward procedures.

Salespeople love simplicity – what is simple is used. For example, if you simplify your sales planning process, adoption from your sales team will increase. Mutually, adoption will strengthen the commitment of your sales team to your sales planning process. If your sales team is not committed, then your sales planning process will undoubtedly fail.

Simplicity means you will have to compromise. For example, if you are tracking open sales deals, every Key Account Manager would like to see different characteristics of your sales planning software, such as deal status, deal size, type of products, reasons for not buying, decision-makers involved, chances, etc. This list can go forever. If you want a receipt for failure, try pleasing all your salespeople at once.

“Simplicity means you will have to compromise.”

What should a sales leader do? Sales managers should adopt as many criteria or characteristics in their sales planning process as needed; as few as possible.

You will have to think like a designer. Thinking like a designer means finding compromises between what is necessary and what is possible. Discuss this dilemma with your sales and operations planning team; simplify as much as you can. And remember: less is always more.

Principle 2: Your Sales & Operations Planning should be ANALYTICAL.

One cannot improve what you can’t measure. The fundamental goal of S&OP is to increase customer satisfaction, optimise inventory and improve sales productivity. Therefore, a B2B sales leader should define the right set of Key Performance Indicators for her S&OP.

Setting the right KPIs is not an easy task, but it is a critical one. Again, here simplicity is of the essence. If a company needs 256 KPIs to monitor its S&OP, most likely it will not be able to improve it. A sales leader should instead find the right balance between what she needs and what she wants. Bear in mind that each KPI your sales team needs to measure adds costs to the whole sales operations process.

There are two common risks when adding analytics to an S&OP. We mentioned above the first one: monitoring too many unusable KPIs. The second one? Lack of transparency.

“Once an S&OP becomes analytical and transparency kicks in, an organisation can start calling itself ‘data-driven’.”

Everyone along the S&OP chain should know what is going on. One cannot have blind spots. That is a critical characteristic of successful S&OP (and almost any other analytical process)

For example, if demand is increasing for some of your products or services, marketing will probably notice first. If marketing is already sensing some changes in product demand, how long should it take until the order-fulfilment team is informed? Should they wait for the customer himself to file a complaint? Or better to know right away how product demand is progressing?

Once an S&OP becomes analytical and transparency kicks in, an organisation can start calling itself “data-driven”. Moreover, measuring and analysing a limited set of critical KPIs will enable cost-efficient forecasting features or predictive sales analytics.
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Principle 3: Your Sales & Operations Planning should be LOVED.

Adoption is not enough. If you want you S&OP to thrive, your sales team should genuinely like it. As we all know, love rarely happens. It takes time and dedication, patience and communication. Sales leaders should involve their sales and operations teams at every stage of the S&OP definition. Getting everyone on-board will drive adoption and engagement.

In many cases, especially in large organisations, upper management defines S&OP top-down. Once they establish this process, it is difficult to change it or to work around it. If this is the case, sales leaders should familiarise with the logic of the planning process and adopt them as their own. Remember, nobody chooses the family, but we still love ours.

“Adoption is not enough. If you want you S&OP to thrive, your sales team should genuinely like it.”

A successful S&OP should run like a well-oiled machine. The marketing department feeds new opportunities to the sales force, presumably after a qualification. Your sales team will discover and qualify new leads and opportunities. They will move projects along their pipeline. Finally, the Operations department will ensure customers get what they are expecting on time, controlling stock levels and deliveries. You can only achieve this level of coordination only if everyone along the line cares about your S&OP.

Principle 4: Your Sales & Operations Planning should be STANDARDIZED.

Standardisation requieres everyone working consistently. It is, in a sense, related to simplicity. If a sales planning process is standardised and straightforward, then you will force all your key account managers to follow the same ideas in sales planning and operations.

How do you achieve standardisation or consistency? First, of course, by keeping things simple. Second, employing sales coaching and discipline. Sales leaders need to coach their Key Account Managers into the benefits of having a standard sales planning and operations process. Sales leaders should make them accountable for the quality of the information they feed into the process.

“How do you achieve standardisation? By keeping things simple.”

Standardisation will make your sales planning process usable, especially when it comes to forecasting and analysing sales data. If only half of your sales team takes a standard approach to your sales process, but the other half doesn’t, your sales data will not be usable for predictive analytics.

Only if your sales data is usable, you will be able to make reliable predictions and to help your operations planning team. For example, it is a common practice to use probabilities in sales planning. “What are the chances of closing this project?” is probably one of the most secretly feared questions in any sales meeting.

A better approach to this issue is to determine uncomplicated standard options, i.e., “Good Chances”, “Bad Chances”, or “Neutral”. By using fewer choices, and by unambiguously defining their meaning, your sales team will work in a standard fashion. Your Key Account Managers or sales reps cannot decide between “Bad Chances” or “Neutral”? Force them to choose. They are the ones in the best position to discern.

Standardisation is hard to achieve because we are all different. Sales managers must coach their team about the benefits of working in the same way. Only standard processes are successful in the long run.

Principle 5: Your Sales & Operations Planning should be ACTION-ORIENTED.

It is not enough to measure sales KPIs and to have a standardised planning process if your S&OP is not action-oriented. What does it mean an action-oriented S&OP? It means chiefly two things.

First, an action-oriented S&OP means involving practical action to deal with problems, changes of a request, forecast, etc. Second, it needs a sales team willing to take these concrete measures to address any situation that can arise in your S&OP.

If a customer is delaying a buying decision, there is an increased demand or some products will not be available, your sales team should do something about it.

If the planning of a project is becoming tight, or your sales KPIs are going red, your sales team cannot passively wait for the problem to go away. It must be willing to undertake a particular action that will ensure the attainment of the S&OP.

Having an action-oriented S&OP is harder than it sounds. First, a sales manager should hire entrepreneurial Key Account Managers willing to go an extra mile to close a deal and to have tough talks with unhappy customers. However, a sales leader cannot build an S&OP full of exceptions and loopholes, for it will make everyone’s life harder. A process is a process, and your team should follow it. The tension between these two aspects – allowing for exceptions and shortcuts while keeping a standardised S&OP – represents one of the most challenging issues of an action-oriented sales team.

“Your S&OP should involve practical action to deal with problems, and your sales team should be willing to take these concrete measures.”

An experienced sales manager knows by heart that she cannot please every Key Account Manager. Sales leadership means making difficult decisions, prioritising, embracing opportunities and taking calculated risks. Similarly, there will be plenty of occasions when an action-oriented sales team puts the S&OP owner under pressure. Here hard decisions will be made to keep the Sales & Operations Planning on track. Therefore, the management should set priorities and review them regularly. Is customer satisfaction more important than inventory coverage? Is the risk of customer attrition worth a 10 % increment in product lead time? Furthermore, making (sometimes unpopular) decisions and setting priorities in an on-going manner requires a sales manager to take calculated risks. Not every customer will migrate if they should wait an extra week for a product, but some will.

In the end, only action-oriented S&OP is successful, for planning is always a contingency. The plan itself is not as important as the planning process. To be ready for action, to prioritise, if necessary to change the course, differentiates between good and bad strategic and operational sales planning processes.

The SALSA principle of Sales & Operations Planning – Conclusion

Sales and Operations Planning (S&OP) is perhaps the most critical planning process of any company. It comprises two close-related fundamentals: sales planning and operations planning.

The primary goal of S&OP is to bring together three critical but competing goals into line: customer satisfaction, inventory optimisation and sales productivity.

Chance does not determine the success of S&OP. It starts with a deterministic procedure for sales planning. Sales leaders can successfully implement it by following the SALSA principles for Sales & Operations Planning: Simplicity, Analytical, Loved, Standardized, Action-Oriented.

What is simple is used. A simple S&OP is easy to implement and will add value to the sales organisation. It increases utilisation and adoption.

Nowadays, any Sales & Operations Planning process should include analytics. Analytics allows controlling, transparency and efficiency.

The sales team should love your S&OP. Crafting a business process that salespeople love is easier to write than to achieve. However, any key account manager will support a process that is simple to use, increases customer satisfaction and offers tangible financial benefits.

To implement a standardised Sales & Operations Planning process, sales leaders should find compromises. An excessive amount of KPIs and details will increase complexity and reduce adoption. Make your S&OP standard across your sales organisation and teach your sales team how to use it.

Finally, a Sales & Operations Planning process should be action-oriented. Action-oriented means two related things. It should include specific activities, and the sales team should be willing to take them.


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Sales & Operations Planning Principles