Turning Knobs, Getting Results: The Real Power of S&OP

When I talk to clients about Sales and Operations Planning (S&OP), I like to break it down to three simple "knobs" that executives can turn: work, time, and resources. Think of these as levers you can adjust to keep everything balanced in your operation. The trick? Any time you twist one of these knobs, expect it to have an impact on the others. That’s why S&OP is more than just a plan – it’s a structured way to stay flexible, keep everyone on the same page, and avoid the big surprises that can throw a wrench in the works.

Let’s dig into each of these knobs.

Knob #1: Work – Getting Aligned with Customer Requirements

The first knob is work, and that’s really about what you’re actually doing to meet customer needs. S&OP gives you a regular chance to review what’s in the pipeline and make sure you’re focusing on the right things. Are you allocating enough production to your high-demand products? Are there any customer requirements you’ve missed? Here’s where you can fine-tune your workload to stay aligned with changing demand without wasting resources on lower-priority items.

Knob #2: Time – Working the Clock to Hit the Target

Time is your second knob. Everyone has deadlines, and no one likes to miss them. But let’s be honest, sometimes schedules shift. With the time knob, you’re looking at how long you’re giving yourself to meet demand and deliver on commitments. Adjusting this knob might mean speeding up timelines if you’re aiming to meet a sudden spike in demand, or it could mean extending schedules if you need to reallocate resources to a more critical area. The important thing here is to manage time proactively, so you’re not scrambling when things get tight.

Knob #3: Resources – The Muscle Behind the Plan

Lastly, there’s the resources knob, which covers everything from labor and equipment to materials and budget. This is the muscle behind the plan. When demand goes up, you might need more shifts, overtime, or even temporary labor to get the work done on time. Or maybe there’s a sudden supplier delay, and you need to shift resources to stay on track. With S&OP, you’re always looking at what resources are available, what’s in the budget, and where you might need a bit of extra help.

The Balancing Act: Twist One, Adjust the Others

Here’s the catch – these knobs are interdependent. You can’t just change one without affecting the others. Say you want to meet demand faster (time), but resources are stretched. You might have to increase overtime or add extra shifts (resources) to get there. Or, if you’re low on resources, you may need to extend the timeline (time) to avoid overloading your team. This is where S&OP shines, giving you a clear framework to continuously review and balance these knobs to keep your plan on target.

So, Why Does This Matter?

S&OP is essentially a structured process to keep these knobs in balance. By reviewing these three variables consistently, you’re able to produce reliable results and minimize those last-minute surprises that can sideline your plans. It’s a proactive way to manage the ever-shifting landscape of demand and capacity.