Have you ever been sitting in the perfect S&OP meeting…..slides were clear and crisp….all data were accurate….each business area presented their numbers well…….but at the end of the meeting, you still knew that the most obvious issue on a key product line was not being addressed because it was not clear where the responsibility was in the value chain?
If you recognize the situation, you have to carefully consider if your S&OP process has become a mechanical process, where presenting the right data and only being on top of YOUR OWN business is “success,” where you have forgotten the real cross value chain benefit a strong S&OP process can provide your company! Do not get me wrong. If you have taken the process to the situation above, you have come a long way. Creating a structured process where you do not continuously discuss numbers and confusing slides etc. is a good place to be. But, it also may likely mean that you can get even more out of your process!
In the LEGO Group we are continuously working with Trust as a way to further maximize the value creation from S&OP. For instance, why should the S&OP team spend 1 hour every month going through all numbers on Supply and Demand only to find one or two minor errors in the data that really did not affect the business? Why not as a starting point trust that we are all on top of our business and use that 1 hour to discuss what opportunities the team can come up with to support our customers? Of course, this cannot happen until the team has trust in each other and knows that if there is an issue in either Supply Chain or with the current forecasts this will be brought up automatically. But, how can you be sure that your colleagues will not hide an issue, or if your colleague believes it is a minor challenge, but yet this significantly impacts your business area? And what happens if you have a new member of the team that is not known for being as collaborative and open as the rest of the team?
I strongly believe that working with “Extending Trust” as part of your S&OP journey will deliver opportunities and results that you will not get from a “traditional” well functioning S&OP. Of course, there are significant pitfalls that you will have to be aware of.
I very much look forward to being able to share insights to the LEGO Group’s “S&OP Journey” and even more being able to learn from a large group of Professionals at the IBF’s Best Practices event in Orlando.
Your comments, challenges, etc., on your S&OP experience are welcome!
Michael S. Kehlet
Sr. Director of the Demand Planning & Forecasting Market Group
See MICHAEL KEHLET Speak at The IBF’S: