What is the S&OP process?

Sales and Operations Planning (S&OP) is a monthly business management process that integrates quantitative data from different parts of the business, with the goal of driving better decisions around production planning, purchase order management, sales strategy, and product development. Simply put, the S&OP process refers to the regular communication between sales and operations departments to ensure smart cash decisions are being made. The S&OP process is critical for the success of CPG brands. A broken or non-existent S&OP process can lead to problems such as spoilage deductions, forecasting mishaps, and negative distributor balances. In fact, the number one reason brands reach out to advisory firms like Rodeo CPG is because something unexpected has happened that could have been prevented with a proper S&OP process.

At Branchfood, we support CPG food and beverage brands through our curated resources and connections. Given the importance of the S&OP process and the disruption caused by COVID-19, we partnered with Rodeo CPG and hosted a webinar to provide you with S&OP best practices and put your brand on the path to success. Watch the recording below to learn how to implement an effective S&OP process and optimize your brand’s cashflow for years to come. Be sure to download the Monthly S&OP Checklist for an easy-access guide to come back to each month, and check out the Q&A highlights.

Q&A:

What tools and templates are out there to track and document the S&OP process and make sure all this information is shared with the team?

Rodeo’s ongoing service offerings are built off of tools that help solve a lot of these issues. We’ve developed some simple templates that anyone can use, even those who aren’t working with us, but want to stay organized throughout the process before they begin to outsource it. We have purchase order tracking, cost estimation calculators, and other things that we can provide to anybody. If you’re interested in these tools, or in working with Rodeo, reach out to us at hello@rodeocpg.com!

What range of inventory turns per year is considered to be sufficient?

In terms of in-store velocity, it really depends on your category. Rodeo is coming out with some content with Accountfully later this month that’s all about benchmarks on velocity by category, so stay tuned! In terms of how distributors are looking at inventory turns, each warehouse is different because it’s at a different level of capacity. This also depends upon refrigerated, frozen, or shelf stable, because you’re taking up different spaces in their warehouse. In terms of turning over your own inventory, you should be aiming to move through everything before the product hits 75% shelf life. It’s good practice and it will allow you more options to sell your product if you are producing and moving within that first 25%. For example, if the product has a twelve-month shelf life, you should be producing and moving within three months.

The team at Rodeo Capital considers investment opportunities. What stage is the team looking at, and how do you evaluate those investment opportunities?

Rodeo Capital is affiliated with Rodeo CPG, but is a separate entity. A key factor for Rodeo Capital is plant-based, so they only invest in plant-based products. In terms of business operations, they’re looking for a lot of what was just presented on optimizing the S&OP process. They’re very focused on efficient use of capital. If you’re interested in getting your product considered, reach out to zachary@rodeocpg.com.

Is Rodeo taking new clients, and has COVID-19 changed anything about what you're evaluating for new opportunities?

Rodeo is taking new clients! We have also hired three people in the last two months, we are actively looking now for others, especially around digital marketing and e-commerce. That is certainly partly due to COVID. Our philosophy is really that when you dig in with brands, there’s not a hard line of needing to separate retail and digital. If you're not digitally merchandised, you're missing out on a lot of customers. That’s been important for a long time, but people are really starting to adapt.

We’ve been seeing a lot of struggles with supply chain and co-packers that had to drop brands from their line to make space for another, larger company. We’ve done a lot of co-manufacturer searches, and there’s also been a lot more focus on the S&OP process and cash cycles because people have had to extend fundraising out.

Check out our Serving Up Support webinar series for more actionable insights that can help your business grow. Learn more about Branchfood’s membership benefits, and stay informed with our newsletter. Interested in hosting an event with Branchfood? Send us an email at natasha@branchfood.com for more information.