Rapid growth—or rapid decline—can shake even the most confident companies. In younger organizations, it often leads to mixed messages, rushed decisions, and a general sense of “too much happening at once.”
Leaders don’t just need to keep the wheels on the bus. They need to keep the team aligned, protect the business, and still leave room for innovation.
Three Helpful Lenses
1. The Entrepreneur’s Dilemma
Entrepreneurs constantly juggle two tough tradeoffs:
Spend now or conserve cash?
Chase growth or protect profitability? You usually can’t prioritize both, and that tension creates pressure.
2. The Innovator’s Dilemma
Christensen’s classic idea: big companies lose ground because they keep improving high-end products, while smaller players quietly improve the low-end until—suddenly—they’re competitive. It raises a practical question: do you push the cutting edge, or deliver a simpler version that wins on cost and speed?
3. The Investor View: “RIP Good Times”
Sequoia’s 2008 memo was blunt: reduce risk, cut unnecessary spending, move quickly, and don’t assume growth will save you. The takeaway for today: speed and clarity matter. In uncertain environments, hesitation is expensive.
What Leaders Can Do Right Now
1. Make finance a true partner
Your finance team shouldn’t just report what happened—they should help forecast what’s coming, highlight risks, and support decisions.
2. Look ahead, not just backward
Companies need a shared sense of direction. Forward-looking data—not just last quarter’s results—should guide decisions.
3. Strengthen processes before buying more tools
Great software won’t fix unclear processes. Build the foundation first, then make sure your systems can scale with you.
4. Treat planning as a cycle, not an annual event
Plans should be updated often and communicated quickly. Short, frequent planning beats long, rigid plans every time.
5. Be honest about what the numbers actually say
Avoid building plans around the rosiest assumptions. Make decisions based on reality, even when it’s inconvenient.
6. Build teams you trust—and let them work
The right people make everything easier. Hire well, delegate, and avoid the trap of micromanaging.
7. Protect cash
Cash gives you options. Keep it top of mind, plan for multiple scenarios, and reduce unnecessary risk where you can.
What High-Performing Companies Have in Common
Top companies tend to be really good at a few things:
They focus the team around a clear direction
They communicate quickly and often
Their systems and processes scale
Their decisions are grounded in insight, not wishful thinking
They hire talented people and give them space to deliver
Jeff Osorio is a Consulting CFO with over 30 years of experience in operationally oriented companies ranging from pre-Revenue to $4B with over 40 ERP implementations in his portfolio. He is also an Adjunct Professor in the MBA program of the Leavey School of Business at Santa Clara University.
5David AJ Axson, “Collecting More Data But Gaining Less Insight” Financial Executive, vol. 14, no. 3, May-June 1998, pp. 16+. Gale Academic OneFile, link.gale.com/apps/doc/A20929784/AONE?u=anon~f92c2cbc&sid=googleScholar&xid=cb530cf4
6“If You’re the Smartest Guy at the Table, You’re in Trouble” Presentation by Marthin De Beer, SVP Emerging Technologies, Cisco Systems
We talk with a lot of manufacturing leaders, and we’ve noticed the same challenges come up again and again in Sales and Operations Planning. Maybe these sound familiar:
Building a “forecast” by taking one big order from a customer and dividing it by 12 months, generating an inaccurate or obsolete forecast causing unnecessary inventory build-up.
Finding out that sales and operations “leaned forward” on procurement of inventory to meet lead time on a large upcoming order, only to find out it was delayed or cancelled, uselessly tying up cash.
Planning production based on only what’s already in the order backlog, instead of aligning with true future demand, causing extended lead times and potential lost sales.
Focusing on unit volumes only, and not factoring in product mix, seasonality, or margin impact, unnecessarily constraining available manufacturing capacity to handle spikes in demand.
These kinds of shortcuts feel efficient in the moment, but they often lead to missed targets, stockouts, reduction of cash, increase in inventory and misalignment between sales, operations and finance.
These problems and more were the focus of the new Sip Club, hosted by Expandable Software and MIE Solutions (subsidiaries of Mirador Software Group) on September 18th, 2025. Once again, industry leaders gathered to discuss issues and share insights on their solutions, with David Gavlik, Chief Financial Officer of BSC Industries, as the featured guest.
So, what is sales and operations planning?
Sales and Operations Planning, or the S&OP Process, is a process by which a company consolidates forecast information from the various functions of the enterprise in a structured manner to prepare a business plan for the company and communicate and establish coordinated priorities for all parts of the organization.
“Sales and operations planning is a widely used, effective tool for gaining a greater degree of control over [a] company’s operations. Though the use of this tool, a company can coordinate the actions of each functional area through consistent, frequent links between the business plan and each department’s operations by
Orchestrating communications
Developing a realistic plan capable of achieving company objectives
Ensuring that each business decision is made with a deliberate view of its impact on the entire organization
Ensuring that purchasing is buying the correct items, manufacturing has the capacity to make items, and finance can pay for and forecast results, all in an effort to ensure customer demand is met.
“This dynamic process enables a company’s sales and marketing groups to carefully coordinate the impact of market demand with departments such as manufacturing, engineering and finance. The net result is a dramatically increased ability to anticipate changes in customer needs.” [1]
All companies perform this process in some sort of manner (though some are very informal) but if not organized and cross-functional, it can lead to incorrect, costly decisions.
Who needs to be involved in sales and operations planning?
The short answer is any function in the company that is involved with selling, producing and delivering products to customers. They include:
Marketing: Providing input regarding programs and company initiatives to promote various product lines and programs to influence future customer buying behavior.
Sales: The direct interface to the customer and product demand
Purchasing: To ensure they have the information needed to procure inventory in a timely fashion.
Operations: To ensure they have capacity and plans in place to handle upcoming customer needs.
Finance: Sometimes forgotten in this process, finance is the gatekeeper in challenging assumptions, monitoring cash flow, and updating financial projections and the impact to gross margin and overall profitability.
What are some typical S&OP failures?
Inventory buildup – With inaccurate or incomplete forecasts and being unable to react quickly enough to changing demand, inventories can increase dramatically.
Tying up available cash– “Leaning forward” on inventory purchases (aggressive forecasting) for large orders that are delayed or cancelled uselessly consumes cash.
Stock outs and/or long lead times impacting sales – Buying only to current demand and not to forecasted demand and sales can create shortages and missed revenue opportunities.
Uneven manufacturing capacity – Leading to long lead times and excess spending to compensate for demand spikes (this can occur by not considering seasonality of the industry or customer buying patterns).
To ensure and drive alignment across the organization on S&OP decisions, best practice says this is a formal recurring process and integrated with the financial planning process and projections.
What is the typical S&OP process?
Ideally in a manufacturing environment, this should be a regularly scheduled recurring meeting. In some cases, finance may lead the meeting as the coordinator and facilitator across the various functions.
Depending on the volatility, cycle times, size and complexity of the company, this meeting can be scheduled biweekly. If held too often, it can lose meaning and becomes repetitive; if not often enough, decisions can be missed; if not scheduled, it can lead to poor decisions.
The process is a cycle. Sales and marketing provide forecast data from their various perspectives which “syncs up” into a demand forecast (what I want). This is provided to manufacturing (including purchasing) to generate material and capacity planning and a response to the demand forecast (what I can produce). There may be multiple cycles here, but eventually a consensus is reached and provided to finance to generate the financial forecast. [2]
Who makes the decisions?
Ideally, it’s a group consensus with alignment. However, it is important to have an escalation process or overall decision maker.
Is someone in the S&OP meeting the final decision maker? OR
What is the process to decide if and when there is an impasse? (CEO/CFO/COO, etc.)
What’s the feedback mechanism?
For the S&OP process to be most effective, there needs to be a solid feedback loop to all the constituents. Specific details need to be provided to all involved as an outcome of the process.
Sales and marketing need to know what volume and mix of products will be available to sell.
Purchasing and manufacturing need to know what to buy and what to build.
Finance needs to know what will be built, what will be bought, what will be sold, and, most importantly, when, to build an attainable financial forecast and cash plan.
There is also a need for ongoing feedback during the ensuing period: sales communicating “what’s selling” and manufacturing providing what’s available (“what I’ve got”), turning the sales funnel into a megaphone (i.e., “I’m out of Prime Rib! Push the Meatloaf!”)
Turning the Sales Funnel Into a Megaphone [2]
What’s the bottom line?
The S&OP process works. It can be painful to start, but once it’s operating, it adds immense value to your business.
Thanks and credit to David Gavlik for his contributions and insights for the Sip Club.
David Gavlik is an operationally focused finance professional with 25+ years of financial experience in multiple products and industries (including biological products, complex hardware solutions, and storage / workspace equipment manufacturing and distribution) in companies ranging from $50-100M. https://www.linkedin.com/in/david-gavlik-7924666/
Jeff Osorio is a Consulting CFO with over 30 years of experience in operationally oriented companies ranging from pre-Revenue to $4B with over 40 ERP implementations in his portfolio. He is also an Adjunct Professor in the MBA program of the Leavey School of Business at Santa Clara University. https://www.linkedin.com/in/jeff-osorio-1412181/
[1]“Orchestrating Success”, Richard C. Ling and Walter E. Goddard, Copyright 1988 by John Wliey & Sons, Inc
[2]“Managing For Performance”, Jeff Osorio, Copyright 2024
On Thursday, June 19th, 2025, the new Sip Club, hosted by Expandable Software, MIE Solutions, and Mirador Software Group, gathered nearly 50 leaders from across the industry for a real-talk look at how AI is being used today—on the floor, in the field, and beyond. From Hype to Hands-On: How AI is Changing Manufacturing featured Jaime Portocarrero and his endless energy and enthusiasm for the topic.
A Quick Survey
The session began with a quick survey of the participants on their current level of understanding or experience with AI, from “None: I’m a deer in the headlights” to “Experienced: I’m using AI successfully in many areas.” The good news is that while 58 percent responded that their experience to date was limited, 33 percent responded that they were either planning or developing an AI strategy and assessing tools—or adopting and using AI tools in a few key areas … thus validating that the AI evolution/revolution is here!
The State of AI in Manufacturing
The simple definition of AI is when machines can learn, think, make decisions, and perform tasks autonomously, as well as—or often better than—humans. This exists at several levels:
Narrow/Weak AI: Performs only the tasks it was programmed or trained for. Limited to a specific purpose or domain. (Where we are today)
General/Strong AI: Would be able to reason, solve problems, make judgments under uncertainty, plan, learn, and communicate in natural language. Multi-domain capable. (5 years out, ~ 2025 – 2040)
Super Intelligent AI (SAI): Would outperform the best human brains in practically every field. (Anyone’s guess 2045 – 2050)
RPA (Robotic Process Automation) and AI (Artificial Intelligence) are NOT the same
In general, RPA is a fixed (pre-defined) rule-based automation based on lookup tables: If, Then, Do. There is no learning or adaptation; rulesresponses don’t change. RPA lacks cognitive capabilities. It does not use an AI engine, it just follows the rules. Examples of this would include automating invoice entry or form completion.
On the contrary, Narrow or Weak AI, at today’s level, is AI that performs a specific intelligent task on the fly based on a given context. It can learn from data (e.g., Machine-Learning [ML] models). Responses can change and adapt to change. It mimics human-like decision-making and uses an AI engine for pattern matching. ChatGPT, MS CoPilot, facial recognition, and spam filters are examples of this technology.
A Massive Amount of Money and Effort is Being Invested in AI
$1.4 trillion has been invested in AI, with more to come. As of 2025, there are approximately 70,000 AI companies—companies offering Machine Learning, Natural Language Processing, Computer Vision, predictive analytics, and others across all markets—worldwide. According to Stanford’s 2024 AI Index Report, there were approximately 10,095 AI startups across the top ten countries leading in artificial intelligence innovation.
McKinsey and Company reports that for many technical capabilities, Generative AI (GAI) will perform at a median level of human performance by the end of this decade (2030). They project its performance will compete with the top 25 percent of people completing any and all of these tasks before 2040. In some cases, that’s 40 years faster than experts previously thought!
But AI is not replacing ERP; a system of record is and will always be required.
AI enhances ERP automation, predictive analytics, and data-driven decision-making, making enterprise systems more intelligent, responsive and productive.
The 2024 Gartner Hype Cycle for ERP sees these key themes for AI:
Generative AI in ERP – Automating workflows, enhancing decision-making, and improving efficiency.
Sustainability in ERP – Embedding ESG (Environmental, Social, and Governance) data into ERP systems.
Extended Planning & Analysis (xP&A) for ERP – Enhancing financial forecasting and business planning.
Composable ERP Strategies – Building adaptable, modular ERP ecosystems for increased agility.
How are Manufacturers Using AI Today
The use of AI is rapidly proceeding in leading major manufacturers today. These include mega-manufacturers like Boeng, GM, Ford, Tesla, Intel, GE, Proctor & Gamble, 3M, Lockheed Martin and John Deere, along with many others. Their applications include:
Predictive Maintenance: AI is used to monitor machinery to predict failures before they happen.
Robotic Process Optimization: AI is used to adjust robotic arms in real time to improve efficiency.
Quality Assurance (QA): AI is used to inspect products for defects using high-speed cameras.
Supply Chain Optimization: AI is used to predict demand and adjust logistics in real time.
Generative AI for Documentation: AI is used to draft Standard Operating Procedures (SOPs), maintenance logs, and part descriptions.
Product Innovation & Simulation: AI is used to simulate new materials or part designs before prototyping.
What’s Our Call to Action?
Using a crawl, walk, run approach is widely considered to be a smart and effective strategy, especially for organizations that are early in their AI journey. We’re not changing “the what” we do, but “the how” and “the who.” We need to welcome the age of AI agents.
Data accuracy and quality are critical. Success is data quality dependent—and a disaster without it. But remember, it’s not that complicated! Adoption will take a bit of up-front hard work (which is temporary) but once organized and mobilized, it gets easier.
How Do We Start?
Every journey requires that first step—that leap of faith. But it always helps to have a roadmap, a plan for how to get there.
Secure Executive Ownership & Accountability: This secures “skin-in-the-game,” no “opting-out,” and “failure is not an option.” Drive for strategic alignment and resource allocation—play to win!
Define Clear Business Objectives: AI should solve real business problems, not be just a technology experiment.
Establish Governance and Ethics Framework: Responsible AI use builds trust and ensures compliance.
Assess Data Readiness: AI thrives on quality data.
Build a Cross-Functional AI Team: AI success requires collaboration between domain experts, data scientists, and IT.
Start Small with Pilot Projects: Small wins build momentum and reduce risk.
Invest in Scalable AI Infrastructure: AI workloads require robust computing and storage.
Focus on Change Management and Training: AI adoption is as much about people as it is about technology.
What’s the Bottom Line?
AI is coming. The Grinch couldn’t prevent Christmas from coming, and we can’t stop the driving force of AI. AI is not a strategy, but a tool for business transformation and scale. It needs to be a commitment to forever change the DNA of the business. This is not an “opting-out” situation. You can either be an ostrich and put your head in the sand and hope it goes away or embrace AI and soar with the eagles.
Thanks and credit to Jaime Portocarrero for his contributions and insights for the Sip Club.
Jaime Portocarrero is a self-proclaimed “Silicon Valley kid” with over 25 years of experience helping companies scale their businesses and enabling competitive advantage via frictionless / LEAN process re-engineering and automation. He has strong cross-functional experience across Idea-to-Offer, Quote-to-Cash, Demand-to-Supply and Source-to-Pay. He specializes in ERP, CRM, high-tech sales, finance, operations execution and supply chain optimization. Jamie is a sourcing and procurement expert, contracts negotiator and SRM (Supplier Relationship Management) Program leader. https://www.linkedin.com/in/jaimeportocarrero/
Jeff Osorio is a Consulting CFO with over 30 years of experience in operationally oriented companies ranging from pre-Revenue to $4B with over 40 ERP implementations in his portfolio. He is also an Adjunct Professor in the MBA program of the Leavey School of Business at Santa Clara University.
