*By Carlos H. M. Aravechia

The pandemic has made it very clear that no matter how thorough our plans are, we are still vulnerable to uncertainty. The author Nassim Nicholas Taleb synthesizes it clearly in his book “On Robustness and Fragility, Deeper Philosophical and Empirical Reflections (Black Swan)” that we humans are incapable of “predicting the unlikely”. Yet, the act of planning is still an essential part of both our personal and professional lives.

After COVID-19, other events such as the blockade of the Suez channel in March 2021 and the truck drivers' strike in May 2018, all highlight the importance of mastering the process of planning.

Within this context, the process of Sales and Operations Planning (S&OP), which first emerged in the 80’s, remains efficient when it comes to dealing with the unpredictable.

The evolution of S&OP

Along its evolution throughout the last decade, S&OP brought forth other planning processes, such as Integrated Business Planning (IBP) and Sales and Operations Execution (S&OE). And even despite all this, many companies still find it hard to execute S&OP neatly.

In order to execute S&OP successfully, companies need to focus on three fundamental pillars: process, people and technology. Vamos falar de cada um deles.


The process begins with sales planning,making use of statistical models to elaborate predictions, followed by operations planning, with an analysis of any production restrictions as well as an elaboration of different scenarios with financial projections. Lastly, by selecting the plan which will then be communicated to the organization, the company’s executives can make their decision.

There are some details that contribute towards a successful sales planning. Such details include a prior alignment between the product portfolio and the participation of commercial agents in the elaboration of predictions. The unrestricted demand plan must be a combination of statistical analysis with predictions from those who are in close contact with the products, sales and marketing campaigns.

In this stage of the process a consensus regarding the demand is established, starting from a prediction and adding building blocks that represent the actions which will influence sales. Thus, it’s possible to contemplate feasible publicity campaigns, marketing actions, discounts and other such events, all from what we infer from the predictions.

The aim is to construct an unbiased forecast, regardless of goals or budget. That does not mean that these should be ignored. If a prediction indicates complications in meeting a goal, or keeping operations within a budget, an alternative scenario must be created, with the definition of specific actions which will favor the accomplishment of such goals. Participants of this process must have clear and well-defined actions. The process then advances to operations planning..

Do you want to know more about the subject? Continue reading the second part of this article in the link.

*Carlos H.M Aravechia is a Production Engineer, Solutions Architect in SCM and operates in the Innovation area at Numen.