14.1 Introduction
Aggregate Planning and Sales and Operations Planning (S&OP) are foundational processes in operations management, designed to align supply and demand over a medium-term horizon. These processes play a pivotal role in ensuring that an organization can meet market demand efficiently while optimizing the use of financial and operational resources.
The primary objective of Aggregate Planning and S&OP is to develop a unified, consensus-driven business plan that integrates demand forecasting, supply capabilities, and financial goals. In essence, aggregate planning evaluates projected market demand over a defined period and formulates a strategy to fulfill that demand through coordinated production and distribution, while minimizing costs and resource utilization (Oracle, 2025).
The Aggregate Planning and S&OP process typically follows these key steps:
- Data Gathering: Collect and analyze historical sales data to identify trends and generate reliable forecasts.
- Demand Planning: Refine forecasts by incorporating market intelligence, promotional activities, and anticipated product launches.
- Supply Planning: Evaluate available capacity, inventory levels, and operational constraints to determine feasible supply strategies.
- Plan Reconciliation: Align demand and supply plans with financial objectives, identifying and resolving any discrepancies.
- Executive S&OP Meeting: Review, finalize, and approve the integrated plan at the executive level, ensuring organizational alignment and commitment.
