Sales and operations planning is experiencing both a renaissance and a revolutionary transition, thanks to rapid technological innovation and the aftermath of the COVID-19 epidemic. Businesses today face unprecedented complexity and volatility, making effective S&OP approaches more crucial than ever.

As the S&OP processes advance, expect to see the growing utilization of advanced analytics and artificial intelligence technology. These tools will allow firms to evaluate large quantities of data, accurately predict demand trends, optimize supply chain operations, and proactively identify potential hazards and opportunities.

The pandemic revealed supply chain vulnerabilities, prompting a shift toward greater agility, resilience and adaptability in planning. It’s clear that the role of S&OP will continue to evolve, becoming more integral to overall business strategy. Following are some key predictions for the future of S&OP, and how businesses can prepare to thrive in this new environment.

The role of S&OP will evolve and become elevated. S&OP specialists are no longer just planners; they’re now strategic consultants who use advanced analytics and business acumen to steer the organization's strategy. This advancement of the S&OP profession necessitates a new set of competencies, including data literacy, strategic thinking and cross-functional teamwork. To prepare, companies should prioritize building a culture that values collaboration and transparency. Firms should prioritize upskilling their S&OP teams and cultivating a culture that prioritizes continual learning and adaptation.

Scenario-based decision-making will become key. In a world where unpredictability is the only constant, this is becoming an essential component of S&OP. Organizations will attain a higher level of cross-functional alignment using AI-driven insights and sophisticated communication technologies, resulting in more unified and strategic decision-making. These technologies enable firms to simulate multiple scenarios and examine the possible effects on supply networks, demand projections and financial results. They’ll be able to foresee obstacles and opportunities, rather than merely react to them. To stay ahead, companies should implement technologies that allow them to simulate numerous events and their potential consequences, allowing for more proactive and informed decision-making.

Sustainability and resilience will be a priority. Companies must begin to incorporate environmental impact assessments into their planning processes and optimize their supply chains to reduce waste and carbon emissions. Supply chain planning and S&OP will incorporate environmental, social and governance (ESG) factors into their decision-making. This includes optimizing transportation routes to reduce carbon emissions, obtaining sustainable materials, and establishing resilient supply chains that can resist shocks and interruptions. To prepare, businesses should incorporate sustainability key performance indicators into their S&OP processes, and invest in technology that improves supply chain resilience.

Data will become democratized. The future of S&OP will require real-time data visibility throughout the supply chain. As supply chains become increasingly integrated and digitized, S&OP processes must evolve to guarantee seamless collaboration and information exchange across all stakeholders, both internally and externally. Integration with supply chain partners, suppliers and customers will be critical for attaining end-to-end visibility and synchronization. S&OP will increasingly democratize data access, allowing stakeholders at all levels to make informed decisions. Businesses should invest in systems that deliver complete, real-time insights and foster a data-driven culture inside the organization.

S&OP agents will rely on generative AI. Fueled by advancements in large language models, task-specific chatbots are emerging as a practical solution for enhancing S&OP processes. These chatbots, which can securely connect with internal data sources, provide unprecedented prospects for integration into S&OP procedures. Companies that use generative AI can improve planning, eliminate human error, and respond more swiftly to market developments.

The incorporation of AI, prioritization of sustainability, and transformation of S&OP are redefining the methods by which firms strategize and function. To flourish in this environment, organizations must take the initiative in embracing novel processes, acquiring new technology, promoting cooperation, and instilling resilience in their supply chains and S&OP processes. Those that embrace these changes will not only survive, but prosper in an increasingly complicated and competitive environment.

Eric Wilson is director of thought leadership at the Institute for Business Forecasting, and author of Practical Guide to Sales and Operations Planning (S&OP/IBP).