Perhaps the absence of S&OP (or a well-functioning one anyway) has caused your team some missteps, perhaps you are scaling up and need to get your act together internally, perhaps you’ve lost a key heavy-lifter you depended on, perhaps corporate is on you and you need to be better prepared to deal with them. You know these situations can get fixed or at lease improved upon by paying some attention to S&OP. No one in your organization disagrees. It’s an easy call, let’s do it.

 

Another month goes by without action, then another and another. Why? You and your team are busy. The day-to-day is all consuming, every week there’s some fire or request from above that needs attention. It seems you just finished a board meeting and the next one is already upon you. Lots of initiatives are already in progress. On and on.

 

You can make S&OP urgent

 

Unless you’re just told to do something, urgent projects and activities have one thing in common, they are tied to dollars.

 

Much of the time, S&OP is one of those “important”, but not always “urgent” things. You work on it, then some months later you see some changes, hopefully. It doesn’t have to be this way.

 

The best way to get your team’s or your boss’s attention on S&OP can be summed up in three letters, ROI. ROI is the best form of change management. What are the costs of the “do nothing” approach? It’s likely not going to cause a meltdown this month or even this quarter, but what if it continues for several months, while in the meantime, your business continues to get even harder. Quantify the costs of doing nothing and you have your business case.

 

  • Low OTIF?
  • Long lead times?
  • Lost sales?
  • Expedite costs?
  • High inventory?
  • Obsolete inventory?
  • Rework?
  • Recent major $ blunder because the left hand didn’t communicate with the right?
  • Low forecast accuracy causing the above?

 

Find the root causes of these things, examine your KPI set and history, quantify what could be different, communicate the story through the data. Without these things, S&OP is just another good idea, and every organization has lots of those, yawn.

 

Figure 1. Financial Metrics Improved due to S&OP

 

Source: Nexview Key Topics in S&OP Survey, 2017, see the full report

 

Figure 2. Overall Performance Percent Improvement Due to S&OP

 

Source: Nexview Key Topics in S&OP Survey, 2017, see the full report

 

About the author

Eric J. Tinker is managing principal at Nexview Consulting, a training and management consulting firm that specializes in S&OP and supply chain performance improvement. See Eric’s book Sales & Operations Planning RESULTS on Amazon or download the eBook free on the website. Feel free to connect with Eric and follow the Nexview company page on LinkedIn, or contact him through the website at nexviewconsulting dot com.