Next year's S&OP plan, in money
Illustrative figures.
The same supplier, next year: the signed S&OP plan of 2,248 thousand cases, priced through each retailer’s own terms. It starts where “Why margin moved” ends, at a gross margin of 10,249 thousand euros.
The headline
The plan lifts gross margin from 10,249 to 11,471 thousand euros, 20.5% to 21.7% of net-net sales: higher list prices more than cover dearer cost per case.
From this year’s gross margin to the plan’s (EUR thousand)
Net-net sales, EUR thousand: 49,951 this year, 52,792 in the plan. Cases, thousand: 2,200 this year, 2,248 in the plan.
The plan, retailer by retailer, through each one’s terms
| EUR thousand, unless stated | Cases, thousand | Invoiced sales | Off-invoice terms | Net-net sales | Gross margin | Margin, % of net-net | Margin change on this year |
|---|---|---|---|---|---|---|---|
| Retailer A | 689 | 19,217 | −2,650 | 16,567 | 3,586 | 21.6% | +552 |
| Retailer B | 539 | 14,313 | −2,019 | 12,294 | 2,340 | 19.0% | +239 |
| Retailer C | 425 | 11,002 | −1,050 | 9,952 | 2,231 | 22.4% | +183 |
| Retailer D | 344 | 8,525 | −393 | 8,132 | 1,866 | 22.9% | +141 |
| Retailer E | 251 | 6,229 | −382 | 5,847 | 1,448 | 24.8% | +107 |
| All five retailers | 2,248 | 59,286 | −6,494 | 52,792 | 11,471 | 21.7% | +1,222 |
Did the planners’ changes make the forecast more accurate?
Accuracy this year, month by month: the share of cases sold that the forecast, made a month ahead, got right.
| Product | Statistical forecast | After changes | Change, points | Error removed, thousand cases |
|---|---|---|---|---|
| Laundry liquid | 88.2% | 93.4% | +5.2 | +21 |
| Laundry capsules | 89.7% | 85.6% | −4.1 | −16 |
| Dishwasher tablets | 80.7% | 89.2% | +8.5 | +25 |
| Washing-up liquid | 90.5% | 94.3% | +3.8 | +20 |
| Hand wash | 81.1% | 89.6% | +8.5 | +25 |
| Shower gel | 90.0% | 94.3% | +4.3 | +13 |
| All products | 87.3% | 91.3% | +4.0 | +88 |
Four sign-offs, one plan
The signed plan becomes next year’s budget revenue, cost of goods and stock.
What the figures say
Price carries the plan
List prices up 2.4% add 1,508 thousand euros, and dearer cost per case takes 688 thousand of it.
Retailer A’s terms reset
Capsule promotion funding at Retailer A falls from 520 to 360 thousand, display fees from 140 to 90. Its margin rises 552 thousand, the most of any retailer.
Changes measured, not assumed
The planners’ changes lifted accuracy from 87.3% to 91.3%. On capsules they cost 4.1 points: promotion volume was added twice.
Key tables export to Excel with their formulas. Illustrative figures. Price is valued at list price; discounts and rebates on the increase sit in trade terms. Mix is valued at this year’s margin per case. Forecast accuracy is the share of cases sold, product by product and month by month this year, that the forecast made a month ahead got right.
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