Ready to turn insight into action?
We help organisations transform ideas into measurable results with strategies that work in the real world. Let’s talk about how we can solve your most complex supply chain challenges.
Planning, forecasting and inventory optimisation: how to reset S&OP (and finally trust the numbers)

Most organisations don’t wake up one day and decide to “transform S&OP”.
They get there the hard way.
It starts with a few late deliveries. A couple of stockouts. Then a run of expedited freight that was meant to be a one-off, but somehow becomes standard operating procedure. Warehouse space fills up with the wrong things, while sales teams can’t get the products they actually need. Finance asks why working capital is climbing. Operations asks why the plan changes every week. And everyone quietly stops believing the forecast.
That’s the moment leaders start searching for answers:
- How do we improve forecast accuracy?
- How do we reduce inventory without blowing up service levels?
- How do we run an S&OP process that drives decisions, not just meetings?
- Do we need Integrated Business Planning (IBP), or do we just need to get the basics right?
For Australian and New Zealand organisations, these problems are amplified by geography, lead times, supplier variability, and the reality that “one network” often spans multiple states, islands, and customer expectations that keep rising.
This article is a practical playbook for resetting demand planning and forecasting, building an inventory optimisation approach that sticks, and implementing an S&OP / IBP cadence that improves service, cost, and working capital—without creating a bureaucracy.
Why planning is the highest-leverage problem you can fix
There’s a reason planners are often the most exhausted people in the business.
They sit at the intersection of sales, operations, supply, finance, and customer expectations. When planning is weak, everyone feels it:
- Customer service is stuck explaining late orders
- Warehouses get slammed with peaks they can’t resource
- Production runs the wrong sequence
- Procurement places last-minute orders at the worst possible prices
- Finance carries more inventory than it wants, and still can’t rely on availability
When planning is strong, the opposite happens:
- Inventory reduces and availability improves (because the right stock is in the right place)
- Expediting drops
- Service levels stabilise
- Decisions get faster
- People stop “working around the system”
That’s why S&OP (and its more mature cousin, IBP) consistently ranks as one of the most effective cross-functional management processes when it’s done properly.
The symptoms that tell you it’s time for a reset
If you’re seeing any of these, you’re not alone—and you’re probably overdue for a planning reset.
1) The forecast exists, but no one trusts it
- forecast accuracy is poor, or doesn’t improve over time
- planning teams spend more time explaining errors than improving the process
- the business runs on “the spreadsheet” or “the sales manager’s number” instead
2) Inventory is high, but availability is still patchy
The classic pain: “We have too much stock… just not the stock we need.”
3) Expediting is normalised
Premium freight, last-minute supplier orders, urgent production changes—it all becomes the hidden tax of poor planning.
4) You’re constantly reacting to promotions and events
Promotions, weather, channel shifts, competitor actions—if these are handled ad hoc, the plan whipsaws.
5) There’s no single view of demand
Different teams use different numbers:
- Sales has a view
- Finance has a view
- Operations has a view
- E-commerce has a view
…and reconciliation becomes the work.
6) Meetings happen, but decisions don’t
Plenty of calendar time, limited outcomes. S&OP becomes a reporting ritual rather than a decision process.
The planning myth that causes most damage: “If we buy an APS tool, it’ll fix it”
Technology can help—sometimes dramatically.
But forecasting tools, APS platforms, and planning modules don’t fix:
- unclear decision rights
- inconsistent data
- lack of accountability
- demand signals that never make it into the process
- poor inventory policy discipline
- cross-functional misalignment
The best results come when organisations treat planning as a system:
- process + people + data + governance + technology
Get the system right, and the tooling becomes an accelerator—not a crutch.
Demand planning and forecasting: what actually improves accuracy
Forecast accuracy isn’t about picking the perfect algorithm. It’s about building an environment where the forecast can improve over time.
Start with the basics: define what “accuracy” means
Many organisations measure accuracy in ways that don’t help decision-making. A practical approach includes:
- Bias (are we consistently over or under forecasting?)
- Error (how far off are we, on average?)
- Stability (how much does the forecast change each cycle?)
- Service impact (what does the error cost us in stockouts or excess?)
A small improvement in bias can have a bigger commercial impact than a flashy improvement in a single accuracy metric.
Fix the demand signals before arguing about models
In many ANZ organisations, planning is undermined by:
- promotions not shared early enough
- pricing changes not reflected in the plan
- new product introductions without realistic ramp assumptions
- channel shifts (store to online, wholesale to DTC) not separated cleanly
- one-off customer orders treated as “base demand”
A good demand planning process separates:
- baseline demand (what happens without intervention)
- uplift events (promotions, campaigns, tenders, seasonality spikes)
- one-offs (large deals, project orders, exceptional events)
Build a “forecast that’s usable”, not “forecast that’s perfect”
Operational planning needs a forecast that is:
- timely
- stable enough to plan labour and production
- granular enough to position inventory
- explainable (so stakeholders can improve it)
In practice, it’s better to have a forecast that’s 80% accurate, consistent, and acted on, than a forecast that is theoretically brilliant but ignored.
Inventory optimisation: the goal isn’t “less stock”—it’s “less waste”
Inventory optimisation isn’t a single calculation. It’s a set of policies and behaviours that balance three competing forces:
- service level expectations
- supply variability and lead times
- working capital constraints
Why “inventory down” targets backfire
If inventory reduction becomes a blunt KPI, teams respond predictably:
- they cut orders and hope
- service drops
- expedites rise
- customer dissatisfaction grows
- and inventory creeps back anyway
A more durable approach is to optimise the right stock:
- correct safety stock settings
- clear replenishment rules
- segmentation of SKUs by demand profile and criticality
- realistic lead times and variability assumptions
The inventory policies that matter most
For most organisations, the biggest gains come from tightening:
- Service level policy (what service levels do we target by product/customer segment?)
- Safety stock logic (based on variability, lead times, and service targets—not gut feel)
- Reorder points / reorder cycles (aligned to supply cadence and demand volatility)
- Min/max and order multiples (supplier constraints, pallets, MOQs)
- Lead time governance (actual vs assumed, and how often it’s updated)
- Obsolescence discipline (slow movers, end-of-life stock, returns and damaged goods)
SKU segmentation: the simplest tool that changes everything
Most businesses treat all SKUs the same, which is how you end up with:
- too much attention on low-value items
- not enough attention on high-risk availability items
Segmentation (ABC/XYZ, criticality, intermittency) helps you decide:
- which SKUs get tight service targets
- which SKUs can tolerate longer replenishment cycles
- which SKUs should be made-to-order or stocked differently
- where you need dual sourcing or risk buffers
S&OP vs IBP: what’s the difference, really?
S&OP (Sales & Operations Planning)
At its core, S&OP is a monthly (or 4-week) cadence that aligns:
- demand plan
- supply plan
- inventory plan
- capacity and constraints
- a set of decisions the business commits to
IBP (Integrated Business Planning)
IBP expands S&OP by formally integrating:
- financial planning (margin, revenue, cost, working capital)
- scenario planning and strategic trade-offs
- a stronger governance model, often with clearer executive ownership
Here’s the key point: many organisations don’t need “IBP branding” to get IBP outcomes.
They need a disciplined S&OP foundation that:
- produces one set of numbers
- makes decisions
- drives accountability
If your current process can’t consistently deliver those basics, start there.
What a “fit-for-purpose” S&OP cadence looks like
A good S&OP cadence is not about more meetings. It’s about the right meetings with the right inputs and clear decision rights.
A pragmatic structure looks like:
1) Demand Review
- baseline + uplift events
- key changes since last cycle
- risks and opportunities
- assumptions clearly documented
2) Supply Review
- capacity constraints
- supplier issues and lead time risks
- inventory outlook and exceptions
- feasible supply plan alignment to demand
3) Pre-S&OP (alignment)
- resolve cross-functional gaps
- confirm scenario options
- identify decisions required at executive level
4) Executive S&OP (decision meeting)
- agree the plan
- approve trade-offs (service vs cost vs cash)
- lock priorities and escalation paths
- confirm KPIs and accountability
The difference between a weak and strong process is simple:
- weak S&OP reports information
- strong S&OP commits to decisions
The metrics that drive better planning behaviour
Be careful: what you measure is what you get.
A balanced S&OP dashboard typically includes:
Demand
- forecast bias and error (by family/channel)
- forecast stability (change over change)
- promotion forecast accuracy (separate to baseline)
Supply
- schedule adherence (if manufacturing)
- supplier OTIF / lead time variability
- capacity utilisation and constraint weeks
Inventory and service
- fill rate / DIFOT / OTIF
- backorders and aged backorders
- days of cover / turns (by segment)
- obsolescence and slow movers
Financial
- working capital impact
- expediting cost
- gross margin impact of stockouts and substitutions
The best dashboards are exception-based. They highlight what needs a decision, not everything that happened.
A practical 8–12 week reset program that works in the real world
If you want a clear, time-boxed approach, this is a common structure.
Phase 1: Diagnose the current state (2–3 weeks)
- map planning processes and handoffs
- assess data quality and master data governance
- quantify value-at-stake: service loss, excess inventory, expediting
- identify the biggest drivers of variability (demand, supply, lead times)
Output: clear problem statements, a baseline, and priorities.
Phase 2: Redesign the planning framework (3–4 weeks)
- define demand planning method (baseline + event management)
- create inventory policy framework and segmentation approach
- design S&OP cadence, agenda, decision rights, and templates
- define core KPIs and reporting
Output: a fit-for-purpose operating rhythm, not an abstract model.
Phase 3: Pilot and embed (3–5 weeks)
- test the process on a pilot business unit/category
- refine templates and data feeds
- train teams and align stakeholders
- implement governance and continuous improvement rhythm
Output: a working process that the business adopts—not a document.
Quick wins you can deliver in 30 days (before a full reset)
If you need immediate traction, these moves are often safe and high impact:
- Align on one demand number for the next cycle (stop parallel forecasts)
- Separate baseline demand from promotions/events and document assumptions
- Create a top 20 exception list: SKUs driving most stockouts or excess
- Refresh lead time assumptions using actuals (even a simple override helps)
- Establish a weekly constraint call for the next 8 weeks (short-term execution alignment)
- Implement basic SKU segmentation to prioritise effort and service targets
- Review safety stock settings for the most critical and most variable SKUs
- Stop uncontrolled expediting by creating an approval gate and root-cause tracking
Quick wins don’t replace the reset, but they reduce leakage and rebuild confidence.
Planning in Australia & New Zealand: the local realities to design for
Planning frameworks need to reflect geography and operating conditions.
Common ANZ factors include:
- long domestic transport distances and variable regional access
- inter-island movements in NZ and weather-related variability
- port congestion or shipping schedule volatility for imported goods
- labour constraints affecting warehouse and production capacity
- high customer expectations on delivery windows (especially e-commerce)
- promotion-driven demand spikes in retail and FMCG
- regional and remote service commitments in government and essential services
A “global template” S&OP process often fails because it ignores these constraints. A fit-for-purpose approach builds them in from day one.
How Trace Consultants can help: forecasting, inventory optimisation and S&OP/IBP reset
Planning improvements only stick when they’re practical, adopted by the business, and supported by a governance rhythm.
Trace Consultants helps Australian and New Zealand organisations reset planning capability across demand planning and forecasting, inventory optimisation, and S&OP/IBP.
Support typically includes:
1) Planning diagnostic and value-at-stake assessment
- baseline performance across forecast, service, inventory and expediting
- root-cause diagnosis (data, process, operating model, governance)
- prioritised roadmap with quick wins and longer-term improvements
2) Demand planning and forecasting uplift
- baseline vs uplift event framework
- forecasting governance and accuracy/bias improvement
- demand signal integration (promotions, pricing, channel shifts)
- practical templates and routines for planners and stakeholders
3) Inventory optimisation and policy reset
- SKU segmentation and service level policy design
- safety stock and replenishment rule calibration
- lead time governance and variability handling
- slow mover and obsolescence management discipline
4) S&OP / IBP cadence design and facilitation
- fit-for-purpose meeting cadence and decision rights
- templates, dashboards, and exception reporting
- executive-level facilitation to drive decisions and alignment
- embedding accountability and continuous improvement
5) Technology and data enablement (where appropriate)
- planning data model and master data governance
- requirements for forecasting / APS tools (tool-agnostic)
- pragmatic automation opportunities that reduce manual effort
Most importantly, Trace’s approach focuses on adoption. The aim is not to produce a “perfect” model. It’s to build a planning system the business actually uses—and trusts.
Frequently asked questions
How long does it take to see results?
You can often see early improvements within one or two cycles if:
- you align to one demand number
- you reduce forecast bias
- you improve event planning discipline
- you reset key inventory policies on critical SKUs
More structural improvements (operating model, tech enablement) typically take longer, but they compound over time.
Do we need IBP?
If your organisation needs tighter linkage between financial outcomes and operational plans, IBP can be valuable. But many organisations get most of the benefit by getting S&OP fundamentals right first.
Can we reduce inventory without hurting service?
Yes—when you target the right inventory, not just “less inventory”. This usually requires:
- clearer service policies
- calibrated safety stock and lead time assumptions
- better segmentation
- improved demand signal capture
What’s the biggest cause of forecast inaccuracy?
It’s rarely the algorithm. It’s usually:
- missing or late demand signals
- unstructured event uplift management
- inconsistent master data
- lack of accountability for assumptions
- planning overridden without learning loops
The bottom line: better planning is a commercial advantage
When planning is weak, every part of the organisation pays a tax—expediting, inefficiency, customer dissatisfaction, and bloated working capital.
When planning is strong, the business becomes calmer:
- fewer surprises
- fewer firefights
- better service
- smarter inventory
- faster decisions
If your teams are spending more time reacting than planning, or your S&OP meetings feel like reporting rather than decision-making, it’s a strong signal that a reset will pay back quickly.
If you want to explore what a practical S&OP and inventory optimisation reset could look like for your organisation, Trace Consultants can help—from diagnostics and quick wins through to embedding a cadence that the business adopts.
Ready to turn insight into action?
We help organisations transform ideas into measurable results with strategies that work in the real world. Let’s talk about how we can solve your most complex supply chain challenges.








