When Operations Tell a Different Story to Finance: How S&OP Brings Alignment Back
Most leadership teams assume they are aligned until the numbers expose them. Finance is working to one view of the future, operations to another, and sales to something else entirely. You see it in budget cycles, forecast reviews, and monthly reporting. The story on the shop floor rarely lines up with the story in the spreadsheet.
This gap doesn’t appear because people are incompetent. It appears because the business is running without a disciplined, trusted planning rhythm. In organisations where the operational reality is changing quickly, the absence of a strong S&OP process eventually shows up as missed forecasts, erratic cashflow, and a leadership team constantly recalibrating.
This is the point where investors start to worry and CEOs start to feel the pressure.
A good S&OP cadence is not a tool. It is a method for bringing the three most powerful engines in the business – demand, supply, and financial intent – back into alignment. And when it is done well, the whole organisation starts to stabilise.
Where the Misalignment Comes From
Different teams see different truths
Finance sees revenue signals, margin pressure, and cash timing.
Operations sees capacity strain, lead times, labour constraints, supplier delays.
Sales sees customer appetite, pipeline uncertainty, and real-world obstacles.
Each view is valid. The problem is that they are rarely reconciled in a structured way.
Assumptions drift in the background
Without a discipline that tests assumptions monthly, teams begin operating on different mental models. Over time those models become embedded, and before long the business is running on multiple versions of the truth.
Firefighting replaces planning
By the time issues reach the board pack, the operational causes have already been baked into performance. Leaders end up reacting to lagging indicators rather than shaping leading ones.
What S&OP Actually Fixes
A strong S&OP process forces the organisation to slow down long enough to think clearly, challenge assumptions, and align behind a coherent plan.
This is where alignment returns.
A single, realistic demand view
Sales and marketing stop guessing, stop inflating, and stop sandbagging. The forecast becomes a working tool, not a negotiation.
Operational feasibility becomes visible early
Operations overlay capacity, stock, labour and supplier constraints before commitments are made. Surprises reduce, predictability increases.
Financial intent links directly to operational reality
Finance no longer has to reverse-engineer why the numbers moved. Cashflow, working capital, and profitability become aligned to what is actually possible.
Leadership decisions improve dramatically
When the CEO and senior team make decisions from one unified view of the future, the business moves faster, with fewer u-turns and far less noise.
This is why I often say:
Numbers report what operations have already decided.
The truth starts on the shop floor, not in the spreadsheet.
S&OP is simply the process that reconnects the two.
Why This Matters to Portfolio Managers and Funders
Weak S&OP is one of the most common operational weaknesses in PE-backed businesses. It is often the root cause behind:
• Forecast variance
• Cash surprises
• Over-recruitment or under-recruitment
• Capacity bottlenecks
• Stock build-ups
• Teams working to different priorities
• Leaders feeling overloaded
When S&OP is strengthened, the immediate impact is clarity. But the real impact is pace. Execution becomes cleaner because everyone is working from the same assumptions.
And for investors, the benefit is simple:
A business that can plan coherently is a business that can scale coherently.
What a High-Functioning S&OP Cycle Looks Like
It runs with a four-week rhythm:
• Demand review clarifies what the market will buy.
• Supply review confirms what the business can actually deliver.
• Integrated reconciliation aligns the financial reality.
• Executive S&OP locks the plan and removes ambiguity.
No drama. No theatrics. Just disciplined leadership.
The Bottom Line
When operations and finance are telling different stories, it is not a personality problem, a capability issue, or a lack of effort. It is a system problem.
S&OP is the mechanism that brings the system back into alignment.
It restores rhythm.
It reduces noise.
It gives the leadership team a forward view they can trust.
And it builds the clarity that underpins sustained performance.
