Many companies today are trying to move from traditional Sales & Operations Planning toward Integrated Business Planning (IBP).
In principle, the idea is simple:
align commercial ambition, operational capability, and financial impact into one coherent plan.
In practice, it is much harder.
More than 12 years ago, I had the opportunity to build and lead an S&OP governance model in a make to order manufacturing organization that connected six marketing organizations with operations.
At the time we did not call it IBP.
But the core principles were already there.
Building the Planning System
The objective was to transform fragmented demand signals into a reliable operational plan.
Demand collection came from six different markets, each with different dynamics. Forecasts had to consider multiple external and internal factors:
- Weather conditions
- Market incentives and promotions
- Interest rate trends
- Historical performance
- Capacity constraints
- Supplier availability
At the same time, we needed to understand the financial implications of planning decisions. Inventory levels, working capital exposure, and service levels were part of the conversation.
To support this process we developed internal analytics tools combining SQL-based data extraction with advanced Excel modelling. These tools allowed us to simulate different demand and capacity scenarios.
But technology was not the difficult part.
The real challenge was building a governance system that supported decision making.
The Governance Layer
A successful S&OP process is not just about forecasts.
It requires a clear structure:
- Demand review with market organisations
- Supply review with operations and suppliers
- Scenario modelling and financial implications
- Executive decision alignment
The process had to translate commercial expectations into operational reality.
Can we produce it?
Can suppliers deliver it?
What will it do to inventory and cash?
These questions were at the heart of every planning cycle.
The Impact
After two years of running the S&OP governance model, the operational impact became visible.
By improving alignment between demand, capacity, and supply constraints, we reduced overtime costs across operations by more than 50%.
Years later, after joining Novo Nordisk, I experienced again how powerful strong planning governance can be.
By strengthening planning alignment at the manufacturing site and improving operational cadence, planning adherence increased from 70% to 90%.
The Real Lesson
Over the years I have come to one conclusion.
S&OP is not a forecasting process.
It is a business decision system.
When done properly, it connects:
- commercial ambition
- operational capability
- financial reality
into a single decision framework.
When done poorly, it becomes just another meeting on the calendar.
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