By Jeff Metersky, Vice President, Supply Chain Strategy Practice, Chainalytics
Friday, March 4, 2011
At the recent S&OP Innovation Summit in Las Vegas, I had the opportunity to observe the current state of the S&OP community. Surprisingly, it appears the community is largely in-sync — most practitioners shared common success factors and barriers to implementation in their presentations. So I put myself in their shoes and asked the same: just what is the current state of S&OP?
It seems that S&OP practitioners face many of the same challenges — effectively managing people, designing the processes required, and executing change management. But slightly at odds with this recurring theme were the vendors in attendance. While most practitioners linked their success to people, process, and change management but not the supporting technology, the vast majority of vendors in attendance were software providers, not consultancies. From my last several S&OP conferences, consultancies are present, but clearly outnumbered by software providers.
Much of the advice centered on this process design and change management theme, which if implemented, I believe would enhance the S&OP process and improve company performance:
- S&OP can’t be just internally-focused. An intra-company effort may be the best place to start but don’t be short-sighted in your approach to S&OP. Engage your suppliers and customers to fully realize the benefits of proactive planning and enhanced execution. And when you do, don’t stop at information sharing. Substantial benefits are found in collaborative decision-making. It’s not about simply sharing your forecast — let’s face it, your plans aren’t ALL that matters. Jointly developing plans based upon mutual capabilities and shared benefits will lead to more significant results.
- Auditing and feedback are essential. The quality and availability of data impacts the ease and usefulness of S&OP processes. If you spend additional time and resources on this prerequisite, the pay-out will be worth the investment. Decisions based upon accurate and available data improve the quality of your plans, speed the planning process, and build confidence for all participants and stakeholders. Don’t forget to incorporate feedback — even as simple as comparing planned vs. actual results — to identify areas of process improvement.
- Incremental progress is better than perfect improvement. In spite of the first two pieces of sage advice, the overwhelming sentiment from S&OP community leaders is that “doing something is better than doing nothing.” Many organizations stagnate in early stages of S&OP maturity waiting for a blueprint solution. It does not matter what your planning practice is termed, S&OP, S&OIP, or IBP. Don’t get caught up in the naming convention. Focus on what the process is trying to accomplish and you will be fine.
At the conference I urged practitioners to consider a complementary path: revisit your supply chain policies and infrastructure on a more frequent and continual basis. This will enhance flexibility, free up capacity, and increase profit contribution. A video of my presentation and the supporting slides can be found at http://ie.arcticfoxtv.com/294/nextgen-s&op:-enablers-for-maturing-your-s&op-processes.