S&OP Is Couples Therapy for Your Forecast and Your Factory

Meet the couple

Forecast: Big dreamer. Believes next quarter will be “our time.” Owns 27 colors of the same bar chart.
Factory: Pragmatic introvert. Can lift heavy things, but only if given heads-up, changeover time, and a BOM that isn’t secretly three versions old.

They’re perfect together, but they fight over service levels, inventory, and expedite spend. Enter S&OP—group therapy with spreadsheets.

Red flags you’ve definitely seen

“We’re totally aligned!” (…and then OTIF is 84% with ten hot lists.)
Safety stock = emotional support inventory.
Finance built a “one number plan”… in a file called Final_FINAL_really.xlsx.
Sales promises Q4 miracles; the plant calls it “fiction.”

The therapist’s office: S&OP, done right

Think of S&OP as a monthly ritual (with weekly MPS in between) that forces Forecast and Factory to speak in the same units, on the same timeline, to the same reality.

The 60-minute agenda that actually works

10 min — Last month in a meme:
Service %, OTIF, revenue vs plan, inventory turns, expedite $, scrap %.
15 min — Demand review:
Top movers, promotions, lost deals, new wins. AI callout: flag forecast bias and outliers automatically.
15 min — Supply review:
Capacity by constraint (people/machine/tooling), changeover windows, supplier risk. AI callout: simulate sequence that maximizes OEE and service.
10 min — Reconciliation:
Price-volume-mix bridge; cash impact (working capital).
10 min — Decision log:
Freeze window, SKU substitutions, make-vs-buy switches, expedite approvals (yes/no—no “maybe later”).

Rule: everything lands in one published plan of record. No side quests.

The minimum viable data pack (keep it boring, keep it consistent)

Demand: 13-week rolling forecast (units and revenue), ABC by revenue and by variability.
Supply: Weekly capacity by critical resource, planned downtime, changeover matrix, supplier OTIF/lead time.
Inventory: On-hand, WIP, safety stock by SKU family; aged inventory and pending E&O.
Finance bridge: Price vs volume vs mix, margin, cash delta (AR/AP/Inventory).
Risk board: Top 5 risks (supplier, route, asset) with probability/impact and mitigations.

Where AI actually helps (and where it doesn’t)

Great AI fits:

Demand sensing: Pull short-term signals (orders, POS, seasonality) to adjust the next 2–6 weeks.
Bias & outlier detection: Sales optimism filter on; remove “hockey sticks” unless supported.
Sequence optimization: Suggest production sequences that cut changeover time and lift OEE.
Reorder points: Tune safety stock with variability & service targets.
Risk signals: Flag supplier/route disruptions before your morning coffee.

Not magic (yet):

Relationship politics, hero culture, and someone who renamed the ERP item master to “test2_final.” That’s still… you.

The KPI couple’s therapy scorecard

Track these four and your arguments get shorter:

Service: OTIF %, stockouts by A-items.
Stability: Schedule adherence %, reschedules/week.
Efficiency: OEE on constraint asset, changeover hours vs plan.
Cash: Inventory turns, E&O $ trend, expedite $ trend.

Pro tip: If service is low and inventory is high, your couple isn’t communicating—S&OP is theater, not therapy.

Working capital tie-in

S&OP decisions move cash, not just parts:

Lower WIP with better sequencing → fewer partials and faster throughput.
Right-sized safety stock on volatile SKUs → less money on the shelf.
Lead-time hygiene + reliable suppliers → AP terms you can actually use.
Next week we’ll pull these levers (inventory, AR, AP) with examples and a 90-day cash sprint plan.

Common fights & how to mediate

Fight: “Sales sandbagged; Ops overbuilt.”
Move: Publish the forecast accuracy by family (MAPE) and mix error. Celebrate accuracy, not just volume.
Fight: “We can’t make that promo.”
Move: AI proposes a substitution plan and timeline; Sales approves the script before the email blast.
Fight: “Capacity is fine” (it isn’t).
Move: Constraint-based capacity model, updated weekly. If the bottleneck is labor, show skill matrix & cross-train plan.
Fight: “Safety stock is too high/low.”
Move: Make the service vs inventory curve visible; pick the point together and log it.

RACI (so decisions don’t evaporate)

Accountable: Ops leader + Commercial leader (co-own the plan).
Responsible: Demand planner (forecast), Master scheduler (supply/sequence).
Consulted: Quality, Procurement, Finance.
Informed: Plant leads, Customer service.

Final word (and a nudge)

S&OP is couples therapy your business actually needs: the safe room where Forecast and Factory stop arguing about feelings and agree on facts. Bring one plan, speak one language, decide in the room, and let AI do the heavy lifting on data and optimization.

Want the 90-day S&OP reboot plan and Working Capital Levers playbook next? Subscribe to The MANUF-AI Edge and I’ll send the 90-day cash sprint checklist with it.

ManufAi