After attending the APICS/IBF Best of the Best S&OP conference I came back with a sense of eagerness and ambition to implement what I had learned over the two days I had spent at the conference filled with information.
The sessions that I attended included presentations from Motorola, BASF, Rolls-Royce Energy, Rubbermaid, Timberland, & OfficeMax. Topics varied from Engineer-To-Order which was a session given by a representative from Rolls-Royce Energy, to BASF’s presentation on process environments to the presentation on retail environments from OfficeMax.
The conference was structured to offer Level 1 and Level 2 seminars, where Level 1 was geared towards companies that were in the process of implementing S&OP (or thinking about it) and Level 2 was aimed at companies that had a process already in place but wanted to improve. Most of the sessions that I attended were Level 2 as my company is exactly in that category.
I work in the S&OP department of a bio-science company in San Diego and have held different positions in S&OP throughout my tenure there. I have held positions ranging from Demand Coordinator, to Supply Coordinator to my current role as S&OP consultant. We have had an S&OP process in place for about 2 years now, but something about it didn’t feel right. It has always seemed more like a data extraction and graph building exercise than a decision making process. S&OP reviews were often seen as a burden due to the time that is needed to be invested every month to gather all of that data. For a division with close to 15,000 unique SKUs it can be quite a tedious exercise! The main point from all of the sessions that struck me was the passion that all of the presenters had for S&OP. All the presenters were so enthusiastic about sharing what they had learned and implemented that I actually felt that there was something lacking at my company. I wondered why that was the case, since we had been doing S&OP for 2 years. Why weren’t we as passionate about the process as these companies were? We even had tremendous support and executive level leadership, which most companies lacked. It didn’t make sense.
While drinking a couple beers at the Hilton Chicago’s Kitty O’Sheas Irish pub after the first day’s sessions, it struck me… Data. I realized that we spend so much time downloading, massaging and formatting the data so that it is in a presentable form that we are left with precious little time to actually analyze the data to make valid decisions based on it. I knew I had suffered from this problem in both my Demand and Supply Coordinator roles.
The next day I spoke to some of the presenters and sure enough, almost all of them had either dedicated teams of Analysts or phenomenal IT support when it came to reporting on S&OP. They spent 20% of their time gathering the data and 80% analyzing the data. It was almost the opposite in my company. I realized my first step after getting back would be to work with our IT department in order to automate our reports as much as possible. For a short term solution I decided to work with the different departments to create standard templates for reports so they don’t have to be done from scratch each time. I felt it was essential to bring back the passion that I saw at the conference to my company and I knew that easing the S&OP workload would be the best way to do so.
While the companies that presented were from varied industries, the ideology remained the same. I thought bio-science was complicated until I heard about Rolls-Royce’s take on risk mitigation in S&OP, where each order was worth millions of dollars! I learned how OfficeMax invested a lot of time in working with their suppliers to get them involved in the S&OP process. I also loved Newell Rubbermaid’s concept of S&OP entities.
Some other tips and ideas that I took from the conference and plan to implement are listed below
Simplify the Cs.
Let ERP control your Cs. Most of us have multi-million dollar ERP suites. The least it can do is manage your C materials with minimal input. Stop over analyzing C materials and try your best to automate all operational procurement and production processes. Use Safety stock, re-order point planning or min-max levels in order to plan for low sellers with minimal forecasts.
In order to be successful you need to extend S&OP beyond the organization. Identify key customers and suppliers to work with and then build and value your relationships with them.
Usually only a few lower management level employees are involved in the S&OP process. Spread responsibilities around to get more employee involvement. S&OP is not an elite club, it becomes much more efficient when you build an S&OP knowledge base with key people across your different sites. Increase conversations about the S&OP process to bounce ideas off each other. Do not underestimate the value of visibility. Transparency is worth it’s weight in diamonds.
Rohit Parangath, CPIM
S&OP and Integrated Planning Processes Consultant