What Integrated S&OP Actually Looks Like (and Why Almost Nobody Runs It)

What Integrated S&OP Actually Looks Like (and Why Almost Nobody Runs It)

Category: Best Practices Written by: Thilo Hamann, Head of Demand Planning at Confido

I spent twelve years at Philips, most recently running Philips' largest Supply Chain Planning transformation before joining Confido. In that time I observed dozens of monthly S&OP cycles across multiple business units, sat in executive S&OP meetings, and saw the value robust S&OP discussions can drive. Over the past months I have been working closely with supply planners across the Confido customer base, and the pattern is remarkably consistent.

Walk into any growing brand and you will find a leadership team that knows what S&OP is supposed to look like. The CFO has seen it work at large CPGs such as Mars or Unilever. The VP of Operations brought it from PepsiCo. And yet, week after week, the planning process collapses into the same pattern: sales lands a promo, supply scrambles to react, finance finds out about the cash impact when the invoices land. The intention and willingness to do S&OP is there, but given the nature of data integration and work mainly living in Excel spreadsheets, the execution drifts.

Understanding what it actually takes to close the loop is the difference between a brand that runs its plan and a brand that gets run by it.

The S&OP Loop That Actually Defines the Process

S&OP is not just a meeting. It's a five-phase monthly decision-making cycle that was formalized at large CPG companies in the 1980s and has not changed materially since. The cycle exists for a reason: each phase produces the input the next phase needs, and the loop closes when finance reconciles back to where the cycle began.

Portfolio Review. In the first step, sales, product management, and supply chain align on the product roadmap: launches, ramp-downs, new versions, certifications. This defines the baseline for what products need to be planned for.

Demand Sign-off. Secondly, demand planners build unconstrained forecast scenarios (typically shipment-based) based on historical shipment patterns, sales intelligence such as promo lift, opportunities and risks, and pipefills. The output is a decision on a single consensus demand plan in units. The demand plan is a reflection of what the brand THINKS it will sell.

Supply Review. Thirdly, supply planners take the consensus demand plan and translate it into capacity-constrained supply plan scenarios covering all aspects such as production and procurement constraints. After final review, the output is a rolling supply plan with capacity, inventory, and material requirements identified. The supply plan builds realism into the demand plan and determines what the brand CAN sell.

Pre-S&OP / Integrated Reconciliation. Fourthly, cross-functional leaders consolidate the plan, translate it into dollars, identify gaps against budget, and prepare decisions for the executive review.

Executive S&OP. Finally, executive leadership reviews the consolidated plan, approves trade-offs, and locks in the next cycle.

Establishing this closed-loop S&OP is the most valuable planning process for any CPG company. When the loop stays open, firefighting is the norm, people and incentives are misaligned, and low service levels and high inventory of unwanted items are the consequence.

The Maturity Gap

There are four stages of S&OP maturity; most CPG brands operate at Level 1 or 2:

• Level 1 (Reacting) – Short-term firefighting. No formal planning cycle.
• Level 2 (Anticipating) – Monthly cycle on paper, but tools still separate.
• Level 3 (Collaborating) – Cross-functional cadence with demand-driven supply plans.
• Level 4 (Orchestrating) – Profit-focused trade-offs. Strategy linked to execution.

The leap from Level 2 to Level 3 is the leap that defines a brand's planning maturity. It is also where integration becomes non-negotiable: you cannot run cross-functional cadence on disconnected tools.

Where the Loop Stays Open at Most Fast Scaling CPG Brands

The phases above describe the textbook process. The reality looks different at most brands under $1B.

Sales, demand, supply, and finance run on separate tools. Trade promotion is managed in a unified system, ensuring seamless integration across all planning phases. lives in one system. Demand planning lives in another. Supply planning lives in Excel. Finance lives, again, in Excel. None of them read from a single source of truth.

The supply planner becomes the human integration layer, pulling forecasts from a CSV, on-hand inventory from a 3PL portal, open POs from an ERP, lead times from a supplier email, and reconciling the result "every Monday morning". By the time the supply plan is ready, the demand plan it was built against is four days stale.

Planning on single numbers. While the value of scenario planning is clear, the reality is that scenario planning is not possible without an integrated data layer that connects sales, demand, and supply. Thus, planning is done on a single number rather than a range of numbers.

No Pre/Exec S&OP. Decisions land inside the execution window. Most fast-scaling CPG brands either skip Pre-S&OP entirely or run it as a status meeting instead of an integrated reconciliation. Critical decisions fall into the operating horizon, leading to firefighting.

Why Automation Alone Does Not Close the Loop

Most CPG brands trying to fix S&OP add a tool to one phase. They buy a demand planning system, a supply planning system, or a TPM. The phase that gets the new tool runs cleaner, but the S&OP loop stays open, because the new tool still talks to the rest of the planning process by exporting CSVs.

The integration is the key. Without it, every phase produces an output that has to be manually reconciled before the next phase can begin. Each reconciliation introduces lag, version drift, manual errors, and the kind of cross-team friction that turns "the S&OP meeting" into a debate about whose numbers are right instead of a decision about what to do next.

A platform that runs trade promotion, demand planning, and supply planning on one underlying data set changes the math. When demand changes, the supply plan recalculates. When the supply plan moves, the dollar impact translates the same moment. The reconciliations that take days in a fragmented stack happen in the background.

That is what integrated S&OP actually means: one data set, one aligned plan.

The Bottom Line

The brands winning at S&OP today are not winning because they have more planners or a better forecast algorithm. They are winning because they collapsed the planning stack and are running an efficient S&OP.

Service-based S&OP firms add people to a broken process. Point solutions automate one phase without fixing the handoffs. The shift that has been happening across CPG over the past years is toward integrated planning platforms: one connected system where trade promotion, demand planning, supply planning, and finance are read from the same data set in real time.

That is the thesis behind introducing Confido Supply Planning. The supply plan reads the demand plan live. Recommended POs respect lead times, MOQs, and safety stock. Every supply decision translates into projected spend, so finance sees the impact before invoices land.

We did not add a supply planning module. We finished CPG's S&OP!

Want to see what your S&OP loop looks like running on one platform? Book a demo.

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