The relationship between project management and sales and operations planning (S&OP) is an undervalued connection in the world of supply chain. The disciplines are rarely discussed in tandem, yet their integration is crucial for success. By aligning the tactical, short-term execution of project management with the strategic, long-term focus of S&OP, organizations can ensure that their initiatives directly support overarching business objectives.
It’s not difficult to find key logical intersections between the two disciplines. Yet most S&OP guidelines barely mention project management. This is a disconnect — and a bit of a surprise — as most organizations have a never-ending list of pressing projects, many with supply chain impacts.
This, then, begs the following questions: Which organizational projects call for discussion within the S&OP process? Is there a set of best practices governing which criteria to use? And what role does the project management office have in the S&OP process?
3 rules for project management and S&OP
Consider the following three simple rules for incorporating project management within S&OP meetings:
1. The project must have reasonable potential for significant impact — positive or negative — on supply or demand.
2. The project must affect the strategic direction of the organization and correlate to measurable supply chain metrics.
3. The project must be substantial in either organizational reach or financial implication.
There are some projects that clearly belong to the S&OP meeting agenda. For instance, starting up a new production line, reconfiguring a distribution network or implementing a tool to optimize new inventory would all be obvious choices. Then, by using the S&OP process to keep focus on the progress of such projects in real time, a business can flex and adjust their demand plans, inventory buffers or sourcing strategies to minimize any disruption associated with the project.
By contrast, there are many organizational projects whose impact on S&OP isn’t immediately clear. Launching a new corporate logo, for example, could have an impact on supply — whether it be in the form of a packaging change or something that draws consumers to the business in a new way. Likewise, a sustainability project to remove chemicals in product formulations could pose a problem if the company stands to incur excessive disposal costs for raw materials from the older formulation. An enterprise resource planning (ERP) implementation might lead to delayed production or shipments.
The common thread across these projects is that they have operational dependencies that are not obvious and might be overlooked. For example, a delay in deploying a new ERP system or meeting timeline milestones for an acquisition integration can subtly strain resources, trigger unplanned volatility in demand or lead to data flows out of alignment. A prudent S&OP leader should anticipate such hurdles and work with project managers to determine whether any projects pose such concerns. And if so, the organization should proactively raise these problems during S&OP to properly create contingency plans.
The benefits are worth the effort
The true value of integrating relevant projects into the S&OP process is that it provides cross-functional visibility for decision-making. This practice helps ensure projects are vetted against operational realities before they create issues. The goal of an effective S&OP meeting is to proactively eliminate surprises before they disrupt the business, and project updates serve that exact purpose.
A project management update within S&OP doesn't have to be complex. It's often a simple, straightforward list of projects that includes associated costs and a red/yellow/green status to quickly identify potential delays or cost overruns that could impact supply or demand. Typically included as a simple slide at the back of the deck, it's a tool used for discussion only when a project is material to the business. If a project issue, such as a delay in a production line redesign, is significant enough, it can be escalated to an executive review. This process ensures that common sense governs what gets discussed and how.
On balance, including relevant project updates in S&OP builds trust in both the project's execution and the S&OP process itself. When leaders see projects are on track, it reinforces confidence across the organization. Likewise, when stakeholders know that projects are being tracked and that issues will be addressed — not hidden — if something goes wrong, it ensures leaders have a full 360-degree view of all supply chain-relevant initiatives. This leads to faster, better-informed decisions.
Ultimately, incorporating project management insights into the S&OP process isn't about adding complexity. It's about surfacing the right conversations early to avoid surprises. Done well, this approach leads to better alignment and transparency, transforming S&OP from a static planning meeting into a living, strategic forum that connects day-to-day execution to long-term vision.
