Implementation of a Sales & Operations Planning (S&OP) process is often considered as an important change in the way an organisation works. Therefore, an implementation project should take a solid approach that addresses all the success factors involved in that change. But the last step in the change approach is often neglected: institutionalising and embedding the change. This is an important area of concern when implementing S&OP. How can you ensure S&OP stays effective when the ‘burning platform’ has gone? How can you make sure the process will continue to evolve, even when the project team that lead the implementation is no longer involved?
‘The business’ should be responsible for keeping S&OP effective and at a stable level of maturity. But how? Of course, there is not a ‘one-size-fits-all’ solution for this, but we can share the following observations and recommendations based on our experience:
- In cases where the process does not achieve sufficient benefits, adding more details is often seen as the way forward; more KPIs and more detailed dashboards result in the availability of more information during S&OP meetings. However, the effect is counterproductive, increasing the workload and length of meetings and tipping the balance between inputs and results in the wrong direction.
- In most cases, it is not the best way forward to extend the agenda of the S&OP meeting in the hope of increasing its relevance. For example, we see the tendency to discuss the progress of improvement projects as part of the agenda. In fact, this only distracts from the essence of S&OP: making mid-term, tactical decisions to balance demand and supply.
- Lengthy meetings in which the whole input deck is discussed are not very motivating for participants. Good preparation is key here; the focus should be on identifying imbalances and deviations from the plan, which then dictate the agenda of the meeting.
- We often observe that feedback is not possible due to time pressure. But surely it must be possible to spend just 5 minutes in every meeting in every cycle to ask participants what has gone well and what could be improved? This often provides the necessary input for learning and for further improving the process.
- New participants in the process often have less know-how and experience with S&OP and this can be a disruptive factor. S&OP should therefore be a standard and integral part of the induction programme for new employees who will be involved in the process.
- It may be a good sign if S&OP becomes boring. It means that the supply chain is under control and the bar can now be raised, such as by focusing on integration with financial planning.
Especially the decision-making has a large impact on the effectiveness of the S&OP process. The way decisions are made is part of the company culture. For example, if the management team are reluctant to make decisions and prefer a fire-fighting approach to solving problems, then motivation to contribute to the S&OP process will certainly drop. But it would be a pity to only discover this after the implementation; this cultural aspect should ideally be part of the change approach right from the beginning of the project…