S&OP is a review meeting dressed up as a planning process
The real decisions in most companies happen in three other rooms. S&OP just reconciles them after the fact.
Fewer than 10% of companies achieve Class A S&OP performance, according to Oliver Wight's benchmarking of over 5,000 organisations. Class A means the plan agreed in S&OP is the plan the business executes — 95%+ adherence. The other 90% of companies have a meeting that looks like S&OP and functions like something else.
A 2023 IBF survey of 250 companies found that 68% of S&OP participants describe the monthly meeting as a "review" rather than a "decision" forum. That distinction is everything. A review forum tells you what happened. A decision forum changes what will happen next.
In most organisations, the real decisions happen in three places before S&OP ever meets.
The first is the bilateral between the senior sales leader and the CEO. When a major account is at risk, that conversation doesn't wait for the monthly cycle. The CEO calls supply chain and tells them to make it work. S&OP is informed of the outcome, not consulted on the decision.
The second is the Finance QBR. Finance owns the accountability document — the budget — and the board-facing numbers. When the S&OP forecast and the financial forecast diverge, which they always do, Finance wins. Not because Finance is right more often, but because Finance is where the consequences attach.
The third is the plant manager's phone call. When the plan hits a constraint, the plant manager and the procurement manager sort it out informally and update the system to reflect what actually happened. S&OP reads the result as if it was a planned outcome.
The S&OP meeting, in this architecture, is a reconciliation forum. The narrative is assembled after the decisions have been made.
The ownership problem is structural, not personal.
S&OP is almost always owned by supply chain — but supply chain cannot compel commercial or finance to comply with a process they didn't design and aren't measured on. Commercial is measured on revenue. Finance on working capital. Supply chain on service levels and inventory. These metrics are not aligned. When S&OP tries to produce a single integrated plan, it is asking three functions to subordinate their local metric to a cross-functional outcome that none of them individually own.
Deloitte's 2021 study of S&OP transformations identified the single highest-impact variable for success: whether the CEO or COO personally chairs the executive S&OP meeting. Not the software. Not the process design. Not the dedicated S&OP director. The chair.
McKinsey's analysis of 60 S&OP transformations found that 72% regressed within two years when executive sponsorship weakened. The process is not self-sustaining. It requires continuous executive energy to maintain cross-functional participation — and that energy almost never outlasts the executive who provided it.
The uncomfortable conclusion: S&OP is not a supply chain process. It is a general management process that supply chain has been given responsibility for running without the authority to make it work.
The companies that run S&OP well treat it as the CEO's operational management system. The CEO owns the integrated plan. Supply chain runs the mechanics. Commercial and finance participate because they are accountable to the plan — not because supply chain asked them nicely.
Until that ownership is explicit, the meeting will stay on the calendar and the decisions will keep happening somewhere else.
Full article with sources: The S&OP meeting that nobody owns