When Sales and Operations Stop Talking: An S&OP Reset Story
By the start of 2022, a regional distributor of building products had quietly given up on planning. Lead times that used to be three weeks were now anything from eight to twenty, materials prices jumped between quotes, and the sales team had learned to over-order — if you ask for double, maybe you get half. Operations, meanwhile, was sitting on a warehouse full of the wrong things while customers waited on the right ones. Nobody was lying; the two halves of the business simply were not talking, and the volatility of the moment had turned that gap into a crisis.
What pulled them out was not a new system. It was sales & operations planning done properly — a monthly cadence that forces one company-wide plan instead of two that quietly contradict each other.
What S&OP actually is
Sales & operations planning is a recurring decision process that reconciles demand and supply into a single agreed plan, usually looking out a rolling twelve to eighteen months. It is not a forecast and it is not a production schedule; it is the meeting and the discipline that connect them. Done well, it gives leadership one set of numbers — expected demand, planned supply, inventory, and the money behind both — and a place to make the trade-offs out loud.
The distributor's old habit was to treat the sales forecast and the purchasing plan as separate documents owned by separate people. S&OP's whole point is to refuse that separation.
The monthly cycle they put in place
They built a standard five-step cycle, the same shape most mature S&OP processes follow:
Gather demand. Pull a statistical baseline from history, then let sales adjust it for what they actually know — a contractor's project starting, a product being discontinued — and record who changed what and why.
Plan supply. Operations tests whether that demand can be met given the new, longer lead times and supplier reliability, flagging where capacity or inventory falls short.
Reconcile the gaps. A working session where supply and demand are laid side by side and the conflicts — not enough product, too much cash tied up, a margin squeeze from rising costs — are made explicit.
Decide at the executive review. Leadership picks among the trade-offs: hold more safety stock, accept some lost sales, raise prices, or pre-buy ahead of an increase. One plan leaves the room.
Publish and measure. The agreed plan becomes the number everyone works to, and last month's plan is checked against what really happened so the process keeps learning.
The hard part was not the steps. It was getting sales to stop padding orders and operations to stop hoarding. That only changed once both sides saw the same numbers in the same room and watched leadership own the trade-off instead of pushing it down to them.
What changed, and why it held
Within two cycles the over-ordering eased, because sales no longer needed to game a system they did not trust. Inventory shifted toward what customers actually bought. When a key supplier announced another price increase, the decision to pre-buy was made once, with eyes open, instead of a dozen times in panic. The volatility of 2022 did not go away — but the company now had a single forum for facing it, which is exactly what S&OP is for.
If there is one lesson, it is that S&OP is a behaviour, not a spreadsheet. The cadence and the shared numbers do the work; the tool is secondary. Start monthly, keep the executive review honest, and measure last month's plan against reality every single cycle.
If demand and supply keep pulling your organization in opposite directions, XNM's procurement, sourcing & contract management can help you build an S&OP rhythm that holds under pressure.