S&OP vs S&OE: From Strategy to Execution

A competitive supply chain is built first and foremost on a clearly defined S&OP cycle, one that sets the company’s strategic direction and aligns Sales, Operations and Finance around a single consensus-driven plan. But this strategic compass becomes even more valuable when complemented by a Sales & Operations Execution (S&OE) process, capable of translating the plan into weekly (or even daily) adjustments that absorb day-to-day disruptions: sudden demand peaks, plant issues or logistics delays.

In this article, we break down how S&OP and S&OE work together, where their synergies lie, and the measurable benefits of having both gears turning in sync. Let’s dive in.

S&OP or S&OE? Two Processes, One Goal

At first glance, S&OP and S&OE may appear redundant, both align sales, supply and finance. However, they differ significantly in their time horizons. S&OP, which runs monthly, works on multi-month forecasts, defines product mix, scales global capacity, and sets inventory policies. S&OE, reviewed weekly, ensures the agreed plan is followed despite inevitable deviations.

In short: S&OP sets the direction (what we’ll do), while S&OE checks execution (how we’re doing and what needs correcting tomorrow). Together, they form the full plan–do–check–act cycle of supply chain management.

What is S&OP?

Sales & Operations Planning defines, month by month, how to produce and supply in order to meet expected demand in the coming quarters. It blends statistical forecasts, commercial inputs and factory capacity to balance cost, inventory and service. The output is a master plan that guides purchasing, manufacturing and distribution.

With structured meetings, S&OP consolidates fragmented data into a single scenario. This helps determine labour requirements, negotiate raw material contracts, and set budgets with reduced uncertainty, in short, it connects commercial strategy with industrial reality.

What is S&OE?

While S&OP consolidates volumes and capacities mid-term, S&OE fine-tunes daily production sequencing and resource allocation to deliver the plan with operational precision. It continuously assesses order changes, urgent requests, or material shortages, adjusting line schedules and stock assignments accordingly.

Its goal: maintain service levels without inflating stock or costs.

To do this, S&OE relies on real-time data from ERP, MES and TMS systems, alongside prioritisation rules based on customer value, promised dates and plant constraints. The result is a synchronised operational flow that absorbs volatility without compromising S&OP targets.

Forecast Horizons: From Month to Week

Different time horizons call for different approaches to uncertainty. S&OP is shaped by macro factors: price–volume elasticity, seasonal patterns, brand launches and planned shutdowns. S&OE is driven by micro incidents: a mechanical breakdown, a spike in e-commerce, or a container stuck in customs.

Time Window and Data Granularity

• S&OP: monthly buckets, SKU-family x plant x region granularity. Models average expectations.
• S&OE: 24h (or shift-based) buckets, SKU-customer x line x truck granularity. Manages queues, priorities and real lead times.

This affects KPIs: the acceptable MAPE for a monthly forecast might be ±20%, whereas an intraday Realisation Factor (RF) should be around ±5%.

Roles and Participants

S&OP involves senior leadership; S&OE is owned by mid-level managers and plant coordinators. A well-structured governance model avoids duplicating efforts: tactical decisions are recorded in S&OE and fed back into the next S&OP cycle via the Pre-S&OP phase.

Technical Comparison Between S&OP and S&OE

To understand the technical differences between S&OP and S&OE, it’s key to look at their input data, supporting tools and core KPIs.

Key Inputs: Forecast, Backlog and Events

The statistical forecast is the core input for S&OP, but S&OE enriches it with demand sensing (e.g., 7-day POS data, exogenous variables in LSTM models). Backlog is used in S&OE to allocate daily capacity, while in S&OP it’s aggregated to adjust future mix.

External events (Black Friday, regulatory changes, strikes) are flagged in both processes as shocks, but S&OE defines the immediate response: expedite, reroute or partial shipments.

Algorithms and Tools

To run a seamless S&OP cycle, the most effective approach is to implement supply chain planning software (SCM software) that brings together, in a single platform, statistical forecasting, multi-echelon inventory optimisation, finite capacity planning, and daily rescheduling based on real-time signals.

These tools unify demand, production, procurement and transport data, apply optimisation models and sequencing heuristics tailored to the required level of granularity, and incorporate a control tower with predictive alerts to correct deviations on the fly. This helps resolve common bottlenecks (such as excess inventory, obsolescence, service disruptions or underutilised resources) by ensuring that any tactical adjustment is automatically reflected in the operational schedule and vice versa, keeping planning and execution fully aligned.

To ensure a Sales & Operations Execution (S&OE) process operates with precise agility, it’s essential to rely on a finite capacity Advanced Planning & Scheduling (APS) system. These platforms connect to ERP and MES systems to receive real-time line availability, apply sequencing heuristics, and replan production every few hours, without breaching constraints related to materials, labour or maintenance. When the APS is powered by a demand sensing engine, priority calculations adapt to order spikes before they result in service failures.

The second essential component is an operational Control Tower with prescriptive analytics and automated alerts. By merging signals from WMS, TMS and external sources, the tower anticipates deviations and suggests actions: expediting a batch, reallocating stock between hubs, or redesigning transport routes. Integrating this visibility with RPA or decision bots enables direct execution of changes within the transport management system or MRP, without manual intervention, closing the S&OE loop and keeping execution synchronised with the tactical objectives set just a week earlier.

KPIs by Process

S&OP tracks aggregate Forecast Accuracy, projected Capex Utilisation, inventory coverage, forecasted EBITDA and GMROI (Gross Margin Return on Inventory Investment).

S&OE monitors daily OTIF, % of reschedules, OEE, load density and premium freight cost.

Some KPIs overlap (inventory, service), but the timeframe changes the tolerance: a 2-day backorder may be acceptable in a monthly plan if it doesn’t impact the quarterly OTIF target, for example.

Decision Map: What Gets Decided in Each Layer

While both processes aim for end-to-end supply chain optimisation, they involve different types of decisions.

S&OP: Volumes, Mix and Capacity

The executive meeting covers line investments, strategic outsourcing, SKU phase-in/phase-out, and inventory targets. Key customers are prioritised and pricing campaigns are defined. All decisions are recorded in a «frozen plan» for the coming cycle.

S&OE: Sequences, Assignments and Order Priorities

S&OE manages the daily operations: which order is produced first, which customer receives a restricted batch, which shipment is advanced or delayed, and which carrier is booked last-minute. The objective is to deliver OTIF at minimal extra cost, while respecting S&OP constraints.

S&OP and S&OE: Two Gears to Synchronise Your Supply Chain

S&OP provides long-term visibility; S&OE turns that roadmap into daily action and absorbs disruptions along the way. Relying on just one creates friction: without S&OE, the plan remains a slide deck; without S&OP, each day becomes reactive firefighting with no strategic anchor.

Excellence lies in connecting them, with unified data, clear rules and technology that enables what-if in minutes and rescheduling in seconds.

Companies that adopt both processes reduce structural inventory, improve customer service, and, most importantly, gain resilience: they can capitalise on unexpected opportunities or navigate supply disruptions with control over costs.

Ready to align strategy with execution? At Imperia, we help our clients implement integrated, scalable S&OP process. Request your free consultation with our experts,we’d love to support your transformation.