Gathering data with regards to past sales enables organizations to create forecasts for future sales and the supply required to fulfill them. It is at this stage where current trends are analyzed, along with any internal and external factors.
Cross-functional involvement is leveraged in order to analyze forecasted numbers and make alterations based on the demand for a specific product. Inventory may be adjusted based on demand during this process.
To effectively identify supply constraints, sales, finance, operations and other departments evaluate the organization's capacity in terms of human resources, suppliers and manufacturing. At this stage, both supply and demand plans can be finalized.
Forecasts are compared to the supply and demand plans to determine how the plans will affect the organization's financial positioning.
Executives review all of the plans, forecasts and recommendations that have come out of the pre-S&OP meeting. The goal is to develop a final plan to be acted on.
After approval has been granted, the plan is finalized and put into action with evaluations scheduled for continued monitoring and success.