S&OP: Closing the Gap Between People and Process

With the proliferation of items or SKUs and the global nature of many of our supply chains, it is imperative to have the best and most accurate Sales Plan we can have. It is equally important to have an Operations or Supply Plan to ensure that the Sales Plan can be supported. As a result, we have seen Sales and Operations Planning (S&OP) become a very popular tool in today’s fast paced business environment.  

There are countless books that outline the S&OP process. There are numerous software packages that will assist in the data management, forecasting, and rough cut capacity plan development to facilitate the S&OP process.  The software offerings range  from very low cost spreadsheet macros to modules of the best known ERP systems on the market today.  

The S&OP process is well known and available to everyone. Software to support the process and manage the large amounts of data are also available to suit almost any size business and budget. Yet, S&OP is not universally successful even though the process is sound from a Technical standpoint.

Why is this?

If it were as easy as just “putting in” the process and getting a software package to help, why are there entire conferences and seminars dedicated to S&OP?

We have found in our practice, that simply getting the process steps and appropriate software is not enough. We are firm believers that when S&OP fails it is because the people part of the process is too often ignored. We call this the Socio part of the process.  

S&OP requires a consensus Demand Plan. This is the cornerstone of a good S&OP process. A consensus Demand Plan is contingent on all functions in the business to agree. This means that Marketing, Sales, Finance, Supply Chain, and General Management all must agree on the Demand Plan.

It is not easy to get all these functions to agree and cooperate. Yet, to make S&OP deliver on its promise, the level of cooperation and agreement has to be quite high. 

All complicated business processes have both a Socio and Technical piece. For the process to operate effectively and efficiently, both parts of the process need to be well designed and managed.

We at Cadent Resources, Inc. are introducing a webinar that will introduce the concept of Socio-Tech systems and how it applies to the S&OP business process.

We would love to have you join us and share your experiences. Click here for more information. If you feel there is anything you would like to see added to this webinar, please let us know. 

Comments

[Ben Benjabutr]

In addition, consensus forecast is difficult to reach because of level of details. It's easier to agree on family level forecast. For SKU level forecast, it's getting very difficult.