Five Suggestions For Effective Executive S&OP Meetings

Eric Tinker - Nexview Consulting

Eric Tinker - Nexview Consulting

The Executive S&OP Meeting is the culminating meeting in the S&OP process that is often preceded by a Portfolio Review, Demand Consensus, Supply Consensus, and Pre-S&OP meetings. It’s the S&OP meeting, led by the company’s, or business unit’s senior executive. The Executive S&OP Meeting is also where the management team:

  • Confirms the summary level operating and financial plan
  • Makes executive level decisions on items that have been escalated to them
  • Manages summary level KPI performance

While the Executive S&OP Sponsor should provide guidance to make things work well at this level, here are five suggestions to consider as well.

1. Integrate the Executive S&OP Meeting with the Executive Management Meeting Structure

Most executive teams have a well-defined system of meetings and business reviews as part of their annual calendar. Adding another monthly meeting to an already packed executive life and travel schedule across multiple geographies and time zones will often not be popular. I suggest you make the Executive S&OP Meeting part of the agenda for an already existing monthly meeting. The hitch can sometimes be that the timing of this meeting doesn’t fit into the S&OP calendar flow. Work with your sponsor to move the meeting a week forward or back if possible. If that is not possible or doesn’t help, then you will have to work out some trade-offs where schedules are concerned so that the  information can be reviewed in a timely manner, or possibly schedule  a separate meeting.

2. Make Sure the Reports and KPIs Are At The Right Level

The Executive S&OP report (i.e. Executive or Company Operating Plan) and KPIs used in this meeting should be at a higher level than those used in Pre-S&OP.  For example, in Pre-S&OP you’re usually examining the product family levels for a business unit. In the Executive S&OP meeting it’s one level up, meaning at the business unit, geography, or company level. The level should match the P&L level they are already looking at. You can bring exception-based supporting detail to cover a particular agenda item as required.

3. Set a Dollar/Currency Level for Exception Items That Go to This Group

This can be an effective objective guideline to help define what needs to go to the Executive S&OP  meeting. In some organizations where the accountability definition is shaky this can be a challenge initially.  But, I would suggest that you strive to get there over a few months. Exception items that should be discussed for this group are typically big dollar items like capacity decisions, large inventory write downs, significant labor decisions, significant allocations across business units, significant decisions involving third party partners, and risk management involving large dollars.

4. Ensure the Executive KPI Scorecard Balances Operational and Financial KPIs

It is still very common for executive teams to not have an executive level KPI scorecard that balances operational and financial KPIs. Executive S&OP is a great way to fix this and gain support for the overall process. A good scorecard will highlight the results that S&OP generates. Plus, even if you’re fortunate enough to not have these executive exceptions to discuss each month, the management team still need to manage KPIs. Similar to reports, KPIs are at the business unit and company level here.

5. Prepare and Facilitate Well

Most importantly, preparation for this meeting is key. The S&OP process leader does the leg work to coordinate the various parties in order to gain support and foster the development and recommended paths  to solving issues coming into this meeting. This means pre-presenting to key executive team members, getting their informal opinions, and defining the next level down team’s recommendation that has dollar implications quantified. While your executive leader presides over the meeting, it’s your S&OP process leader who will typically frame the S&OP issues and facilitate discussion in an efficient manner.

The executive level component of S&OP is a critical one. Please feel free to comment on what has worked in your organization and I look forward to exchanging a few ideas with people at the upcoming “Best of the Best Sales & Operations Conference” in Chicago later this month.

Eric J. Tinker
Principal
Nexview Consulting, LLC

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2 Responses to Five Suggestions For Effective Executive S&OP Meetings

  1. I’m not a big fan of S&OP at executive level. Because, in order to make proper decision, most executives need almost real-time information from ERP or analytics software.

  2. I agree with scm above.

    At this level the focus and concern is almost exclusively on the Financial aspects of the business, and Operations tends to invariably end up being the whipping boy because of Production or Inventory issues, and sometimes also because their numbers don’t always stack up against the voodoo that the Finance Dept does with their own numbers.

    I think that the review at this level should be one lead by Finance, with representation from Operations, but that the actual S&OP process should be focused at a lower level to align Sales & Marketing expectations with the rest of the Supply Chain.

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