The Crucial Role of the CEO in Sales & Operations Planning
Active involvement from top management is essential for the success of Sales & Operations Planning (S&OP). This applies to both large multinationals and medium-sized wholesalers. A good alignment between strategy and operations can only be achieved with the support of the CEO and a clear structure.
Summary
- The support and participation of top management are crucial for a successful S&OP process.
- Companies should not only focus on forecasts but also on managing inventories.
- A clear division of roles and shared performance indicators are essential for cross-functional collaboration.
Support from Top Management
In the world of S&OP, the support of the CEO or owner is of great importance. Without this support, the process often devolves into endless discussions. Jan Kraaijeveld, sales director at Slimstock, notes that many companies are primarily focused on daily operations and struggle to translate strategic plans into concrete actions.
S&OP as a Connector between Strategy and Operations
A well-functioning S&OP process helps organizations bridge the gap between strategic plans and daily activities. However, this requires an investment in people and skills so that companies can break free from short-term thinking. Effective structural conversations are crucial in this regard.
The Differences between Multinationals and Medium-Sized Companies
Kraaijeveld and his colleague Sandeep Walia discuss in webinars the differences in S&OP between established multinationals and ambitious mid-sized companies. The latter group often focuses on the short term, while larger companies realize that S&OP can create value by making strategic long-term decisions.
The Role of Inventory in S&OP
Many companies focus on improving their forecasts. However, Walia argues that a higher inventory can sometimes be a better solution when volatility is too great. In this light, optimizing inventory management is often more effective than solely focusing on accurate predictions. This underscores the importance of a robust supply chain.
The Importance of Data and Reviews
The S&OP process includes various steps, with product management review often being overlooked. However, this phase can be crucial for a good plan. Walia and Kraaijeveld emphasize that insight into the forecast and the product life cycle is essential for a successful S&OP implementation.
Cross-Functional Alignment
A common issue within S&OP processes is the lack of clear roles and responsibilities, leading to silo formation within companies. A clear definition of everyone’s role and responsibility can contribute to smoother collaboration, which is essential for an effective S&OP process.
The Impact of Performance Indicators
An important success factor for S&OP is the use of shared performance indicators. Walia shares his experience in which the CEO of an international consumer products manufacturer held management accountable for linking forecast accuracy to bonuses. This led to increased engagement and better discussions about improvement.
Return on Investment and Significance of S&OP
The Return on Capital Employed (ROCE) is a key indicator that shows how much value a company creates with its working capital. This helps to clarify the current value and impact of S&OP, which is crucial for effective management in operations. The S&OP process can improve financial performance, but it requires involvement from all levels within the organization.
Source: Henrieke Wagenvoort, Wed, 10 Dec 2025, link
