Demand Management 




For a number of years now, consultants have been prescribing regular Sales and Operations Planning (SOP) meetings as an effective way for management to bring together the separate, often warring factions of Sales and Manufacturing to agree on a common course of action—the Sales and Operations Plan. The primary purpose of this meeting is to sanction aggregate produc­tion plans in support of demand, to get the manufacturing com­pany's left hand and right hand working together on the same important job.

However, in today's competitive, capacity and material-con­strained manufacturing environments, there are many possible aggregate plans. How can SOP meeting participants quickly evaluate alternate plans? How can they generate feasible variants of these plans? And how can they ultimately agree upon the best plan to put into action?

Despite the importance of these meetings, participants routinely rely on preformatted reports, Rough Cut Capacity Planning, spreadsheets, and scratch pads to support the decision-making process. The fact is that without responsive, interactive Demand Management and Finite Capacity-based MPS systems to support these meetings, it is likely that the loudest voice will prevail, not the best plan.

The practical alternative to stacks of paper and shouting matches is a set of flexible, responsive systems on notebook computers that allow SOP participants to prepare for and work through these crucial meetings, using up-to-date planning data and techniques.

SOP Process Review

Numerous books and articles have been written detailing the why and how-to of Sales and Operations Planning meetings. By now, there is general agreement on who should attend, how the agenda should be set, even on how the meeting should be led or coached. Unfortunately, there has been relatively little discussion of the tool set required to support these meetings—even though the absence of such tools in standard Sales Order and MRPII systems is often noted.

If we deliberately look at SOP from a tools perspective, the following is clear. The meetings occur regularly—at least monthly, typically not daily. There are several participants includ­ing management from Sales and Marketing, Manufacturing (Pro­duction), Finance, and other departments such as Engineering. The CEO or General Manager is present to facilitate and arbitrate. The participants come prepared to discuss recent performance against plan, to evaluate and change plans based on the latest business conditions.

The SOP meeting typically begins with a review of recent performance against plan for each functional area represented. At minimum, actual customer order bookings are compared with the demand forecast, actual production is compared with the produc­tion plan and actual inventory levels are compared with planned levels.

The meeting focus then shifts to the future. Based on the latest demand forecast and any pertinent information about changing

production capacity or business strategies, the SOP participants may suggest changes to the current plan. One or more alternate plans are proposed.

Alternate plans are evaluated and compared on the basis of their feasibility and the benefits they deliver. In the end, the participants agree either to continue with the current plan or to adopt an alternative. Ideally, before they leave the room, each functional area is confident that it can support the new plan of record and committed to do so.

Let's look now at the two most important steps in the SOP process
and the types of data and tools required to support them.

To be Continued


To stay current on bullet-proofed manufacturing solutions, subscribe to our free ezine, "The Business Basics and Best Practices Bulletin." Simply fill in the below form and click on the subscribe button. 

We'll also send you our free Special Report, "Five Change Initiatives for Personal and Company Success."

  Your Name:

  Your E-Mail:



Your personal information will never 
be disclosed to any third party.

Manufacturing leaders have a responsibility to educate and train their team members. Help for developing a self-directed, World Class Manufacturing training program for your people is just a click away:


You are welcomed to print and share this bulletin with your manufacturing teams, peers, suppliers and upper management ... better yet, have them signup for their own copy at:


With the escalating spam-wars, it's also a good idea to WHITELIST our bulletin mailing domain via your filtering software or control panel: 


This will help guarantee that your bulletin is never deleted unexpectedly.

Manufacturing Knowledge you’ll not find at offsite 
seminars nor in the books at Amazon.com

Lean Manufacturing - Balanced Scorecard 
ISO 9000:2000 - Strategic Planning - Supply Chain 
Management - MRP Vs Lean Exercises - Kaizen Blitz 
Lean Six Sigma - Value Stream Mapping

All at one Website: Good Manufacturing Practices


World Class Manufacturing Menu

 Assembly Line Simulations

Lean Manufacturing Training Articles

Best Manufacturing Practices Archives

Manufacturing Best Practice Bulletin Archives

Linear Operations Survey

Lean Manufacturing Consulting

Lean Manufacturing Consultant

Kaizen Management

World Class Manufacturing Certificate Program 

Resources Links

Lean Manufacturing Training for anyone ... anywhere ... anytime
Business Basics, LLC
6003 Dassia Way, Oceanside, CA 92056
West Coast: 760-945-5596

Lean Six Sigma Training   Thinking Out of the Box   
Balanced Scorecards  Strategic Tactical Planning  
Supply Chain Inventory Management
  Total Quality Management Principles
Lean Manufacturing Implementation  Lean Manufacturing Principles

Email: Click here  Privacy Policy