**Global:** As economic uncertainty persists, supply chain leaders focus on improving sales and operations planning (S&OP) to better balance demand and supply. expert Sarah Gilchrist highlights three key trends: longer-term planning, collaborative decision-making, and targeted stakeholder communication to enhance business outcomes.
As economic uncertainty continues to challenge organisations globally, supply chain planning (SCP) leaders are increasingly focusing on enhancing sales and operations planning (S&OP) processes to better balance demand and supply while aligning operational activities with broader strategic business goals. Sarah Gilchrist, a director analyst at Gartner within their Supply Chain practice, emphasises the growing importance of this approach in the current landscape.
Gilchrist highlights findings from a recent Gartner survey revealing that organisations with well-designed S&OP procedures are 1.2 times more likely to outperform competitors across critical metrics such as on-time, in-full (OTIF) delivery, cost management, and inventory control. Furthermore, companies consistently demonstrating effective S&OP behaviours have a 1.1 times greater chance of achieving superior outcomes in their planning processes.
In light of these insights, SCP leaders are encouraged to strategically direct their efforts within the S&OP framework to maintain a competitive edge and drive enhanced results. Gilchrist identifies three key trends influencing S&OP effectiveness that will be discussed at the upcoming Gartner Supply Chain Symposium/Xpo.
Firstly, there is a pressing need to move beyond a narrow focus on short-term objectives. According to Gartner data, 42% of supply chain organisations struggle to shift the emphasis of S&OP planning towards mid-term and long-term horizons. Gilchrist notes that many companies remain fixated on immediate goals, which can restrict the capability to respond to evolving market complexities and uncertainties. She explains, “Planning beyond short-term objectives involves aligning S&OP processes with mid-term financial objectives and business strategies,” which includes understanding supply chain capabilities and constraints as well as anticipating shifts in consumer demand and competitive pressures. This longer-term orientation enables proactive resource allocation, risk mitigation, and opportunity identification conducive to sustainable growth.
Secondly, enhanced collaborative decision-making and transparency across organisational functions stand out as essential factors. Gartner research indicates that high-performing organisations cultivate behaviours characterised by openness, accountability, and reliable data sharing, while limiting counterproductive aspects like poor communication and inconsistent information flows. Gilchrist asserts, “Open sharing of relevant information and data across departments is critical for a successful S&OP process.” This transparency also extends to recognising risks and formulating mitigation strategies collectively, improving the quality and agility of decisions made throughout the end-to-end supply chain.
Thirdly, Gilchrist underscores the significance of increased and targeted communication with stakeholders to embed and advance S&OP initiatives effectively. Surveyed supply chain leaders rank active stakeholder communication among the top factors influencing business outcomes, with 45% citing it as a top-three priority. She advocates for communications that are contextualised with current market conditions, organisational objectives, and customer impacts to clearly demonstrate how S&OP supports these elements. Gilchrist comments, “Identify which metrics matter to each stakeholder and create a linkage to show how a good S&OP process would support these metrics.” For example, framing forecast accuracy not in technical terms but rather by illustrating its influence on revenue, inventory, working capital, and margins makes the benefits more tangible to non-specialist audiences. Regular reinforcement of these points through various meetings and discussions helps galvanise stakeholder engagement.
Sarah Gilchrist brings her expertise to this analysis as a director analyst specialising in demand and supply planning, S&OP, sales and operations execution (S&OE), and customer collaboration within Gartner’s Supply Chain practice. Her insights reflect a broader industry recognition that evolving the S&OP process is key to navigating current supply chain challenges and positioning organisations for future success.
Source: Noah Wire Services
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