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  • Kevin Corlett

S&OP on a Rope

Connected, Dynamic and Comprehensive Sales and Operational Planning System

Think of your Sales and Operations Planning (S&OP) process as a long rope that extends through your organization. Is it pulled tight, or is there too much slack?

Is it functioning efficiently from your product and demand review, through supply and inventory process review and production, all the way to aggregated plans that are reviewed, revised and accepted by everyone from the executive level on down to the functional owners?

Or is it slow and disconnected, with inefficiencies that are wasting both time and money?

Perhaps you can answer that question quickly, recognizing either the strength of your processes or conversely, the weaknesses that are readily apparent. If the question cannot be answered easily, or even if it can, it may be helpful to see how Next-Generation S&OP concepts apply to your organization. Let’s dig a bit deeper into Next-Generation S&OP and consider some key questions to help evaluate where you are on the range of S&OP effectiveness.

S&OP consists of at least 5 sequential and iterative key Phases:

  1. Product and Demand Review. This includes examining the products you bring to the market and an accurate demand forecast for those products.

  2. Supply Process Review. This is the plan for meeting the demand. It balances flexibility with efficient operating costs and should include multiple scenarios.

  3. Finance Review. The Finance team produces and owns the baseline plan for operational and financial performance.

  4. Pre-S&OP. Review and consensus. Identify any issues and address them. This is the key time for analysis and adjustments.

  5. Executive S&OP. Executive buy-in and sign off. Creation of the final organizational plan.

(We are using these 5 key phases for simplicity, realizing there is a healthy debate regarding the exact number of distinct phases, and the overlap that occurs between them)

When it comes to evaluating the effectiveness of your S&OP process, consider the following three simple dichotomies:

  • Connected vs Siloed

  • Dynamic vs Static

  • Comprehensive vs Limited

Each of these can be viewed as a spectrum and where your organization falls within the range will provide the insight needed to grade your overall S&OP effectiveness. Let’s look at each.

Connected vs Siloed

  1. People, processes, data and time should all be connected as part of one overall process. Are your people connected? Your data and processes?

  2. Do you email spreadsheets between departments, or can various stakeholders take advantage of a single accessible platform?

  3. Does the Supply plan work in sync with the Demand plan, easily connected with real-time data?

  4. Can you easily re-balance inventory or workforce planning?

  5. Are commitments communicated and accounted for?

Dynamic vs Static

  1. Is there a consistent feedback loop that is transparent to the relative stakeholders?

  2. Can you see updates reflected seamlessly in the financial performance?

  3. How real is your real-time data? Is your Supply plan getting the right demand data to make accurate decisions?

  4. Is your process iterative, and efficiently repeatable on a quarterly, monthly, or even weekly basis?

Comprehensive vs Limited

  1. Do you have the ability to explore multiple “What-if” scenarios?

  2. Do you easily incorporate past performance with current and future expectations?

  3. Are metrics available from the top line organization income statement all the way down to product line performance and departmental costs?

  4. Are you effectively using dashboards to identify trends and gain a holistic view of performance?

Where does your organization fall on these ranges? Are your people working in harmony on an efficient process, or is there room for improvement? Are you using the right tools to help define and facilitate an effective end-to-end process? Or are you stuck with legacy systems that are inadequate in today’s fast-paced marketplace?

Wysent can help. We can help in evaluating your current environment. We can identify the best tools available help you get where you need to be. And we can help design and implement a solution that delivers the Connected, Dynamic and Comprehensive Sales and Operational Planning system that helps your organization succeed. You’ll have S&OP on a (tight) rope!

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