Crises have become a constant feature of today’s business environment, capable of emerging at any moment. The key challenge for organizations is no longer just to detect disruptions, but to rely on a planning model that enables fast, informed decision-making under pressure.
Sales & Operations Planning (S&OP) is one of the most effective levers to manage through disruption and support a return to stability. But what does “good” look like in practice? How should S&OP evolve before, during, and after a crisis? This article explores these three critical phases through a practical lens.
1. Before the Crisis: Embedding Risk Management into S&OP
Preparation is the first line of defense against uncertainty. Risk management must be fully embedded into the S&OP process well before any disruption occurs. This starts with identifying major risks and assessing their potential impact.
One useful metric is “revenue at risk,” which helps prioritize risks based on their potential financial exposure. These risks—and the indicators used to detect early warning signals—should be reviewed monthly as part of the standard S&OP cycle.
Equally important is the development of predefined response scenarios. Organizations that have already explored alternative courses of action are better positioned to respond quickly when disruptions materialize.
Tool agility is another critical factor. While advanced planning systems are valuable, the real differentiator lies in the ability to quickly adjust key parameters—demand assumptions, capacity constraints, lead times, and transportation flows. If reconfiguring the system or generating new views is too complex or time-consuming, it will not withstand the pressure of a crisis. During COVID-19, it was not necessarily the companies with the most sophisticated tools that performed best, but those with the most adaptable ones.
2. During the Crisis: Adapting S&OP to a New Reality
Controlling inbound data: In times of disruption, information quality becomes critical. Organizations must establish mechanisms to gather reliable, validated external data while clearly separating facts from noise.
For instance, during the global semiconductor shortage, one industrial client established frequent, high-level touchpoints with key suppliers. This approach provided more reliable insights than relying solely on market reports or media coverage.
Demand forecasting also requires a shift in mindset. In crisis conditions, demand can change dramatically—sometimes overnight. Rather than relying on detailed historical models, companies should work with broader assumptions and use “what-if” scenarios to explore different demand trajectories.
One home appliance manufacturer we supported during COVID-19 faced highly fragmented lockdown policies across European markets. Instead of attempting overly granular modeling, the company focused on high-level demand patterns to guide decision-making.
Adjusting S&OP parameters: Several structural adjustments are required during a crisis. First, the level of granularity must reflect where the disruption is most impactful—whether by geography, product family, or distribution channel.
In the same home appliance case, the company shifted its analysis from product categories to sales channels, as digital and traditional distribution channels were affected very differently.
Planning horizons must also be revisited. In response to semiconductor shortages, one client extended its firm planning horizon to secure supply and stabilize pricing. Conversely, a pharmaceutical company reduced its firm horizon to 2–3 months, prioritizing short-term clarity while maintaining flexibility further out.
S&OP cycle frequency typically increases as well. Weekly cycles—sometimes referred to as “S&OP express”—enable faster scenario testing and decision-making. However, this acceleration comes with a risk: excessive focus on the short term. Maintaining a monthly cycle remains essential to step back, consolidate decisions, and prepare for recovery.
Strengthening cross-functional alignment: S&OP is inherently cross-functional, but this becomes even more critical in times of crisis. Finance, sales, marketing, and supply chain must operate in close alignment.
In many organizations, crises act as a catalyst, helping stakeholders fully understand both the value of S&OP and their role within it. Executive leadership must also be highly engaged to ensure consistent communication and alignment across the organization.
Finance plays a central role. Volatility in transportation, procurement, and operating costs can significantly impact profitability. Validating assumptions and understanding financial implications becomes essential to avoid costly missteps.
3. After the Crisis: Toward a New Standard
A return to normal does not mean reverting to previous practices. Instead, it often leads to the establishment of a new baseline.
Crises highlight the critical importance of effective S&OP and strong stakeholder alignment. Organizations should build on this momentum to further integrate finance, sales, and marketing, and to elevate overall S&OP maturity.
Beyond process adjustments, repeated disruptions are accelerating a deeper transformation in planning models. Probabilistic, simulation-driven approaches are challenging traditional Advanced Planning Systems (APS). Rather than producing a single forecast, these models generate multiple scenarios, each with associated probabilities and outcomes.
This shift reflects a fundamental reality: in a volatile environment, the pursuit of a single “perfect” forecast is no longer viable. True maturity lies in the ability to anticipate multiple possible futures and pivot quickly as conditions evolve.
Organizations that embrace these new approaches—and foster a culture of decision-making under uncertainty—will be better equipped to navigate the increasing complexity of their operating environment.
Eva Borne, Senior Manager Citwell