Exploring New Models for S&OP and Driving Sustainability in the Supply Chain

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Chintan Shah of BIC Inc.’s supply chain operations recently led an IBF webinar  for Asia on December 24, 2012 in which he outlined new models for driving sustainability programs at the company. Chintan has successfully implemented a S&OP process at BIC Canada with the purpose of eliminating human error and improving the supply chain process, which he refers to as Soft-S&OP. Earlier at BIC the forecast numbers lacked consensus as every function had its own approximation of demand vs. what the customer really wanted and what it would take to meet demand.  The S&OP process was created to foster consensus and corrected this problem. BIC created a more structured, three tier process: Collaborative S&OP, Supplier S&OP and Soft S&OP.

BIC implemented its new S&OP process in about 1 year.  The key aspect of implementation was collaborating with the customers to get needed data and win their buy-in. To maneuver through this successfully, Chintan engaged with key customers to start such as Walmart and Staples and interacted with the management and IT teams. The customers were required to share the sell-through data of BIC products to enable the company to see the real pulse of consumer demand. Once this data was gained, the next step was a pilot testing of the S&OP process with the customer to show them the benefits, as not only to BIC, but to them. The efforts paid off tremendously  and customers soon experienced great benefits of the process and in Chintan’s words they ‘just love it today’. In fact, as testimony to their success, Walmart and Staples have both recognized BIC’s process as value to them. To keep customers engaged, they are now involved in the decision making process through quarterly meetings.

The internal challenges like selling the idea to the sales team and getting them on board was also won with a similar strategy. Each internal group was shown the benefits by piloting the project and getting them to realize implementing the process will actually save time that can then be used on, for example, their core job such as sales.  Chintan expressed that S&OP meetings were quite painful to start with and required a lot of deliberations and patience, but now most functions are very accustomed to using it and it has indeed become an integral part of the planning process. As a result, BIC has reduced the reaction time to consumer demand to just few hours from many days earlier. The entire process is free from human intervention except for the judgment over the results.

Beyond the examples, as part of the discussion, Chintan brought a very interesting definition of S&OP to webinar participants: “[the] objective of S&OP is to arrive at a business ‘Game Plan’ to help manage and allocate critical resources to meet the needs of the customer at the least cost”. At BIC he used this philosophy along with fundamental concepts like ‘forecast accuracy being better at higher levels of product hierarchy’ and ‘one forecast number is better than many’.

Chintan also had words of advice for the professionals in India. He reminded them that Walmart  was the company which redefined the supply chain processes and changed the game in North America and IKEA  had one of the most stringent supply chain processes in the world. Now with names like these entering the Indian market, it will definitely change the way things are used to working in this market, so far. This opens up great learning as well as professional opportunities for those in demand planning, forecasting, S&OP, and supply chain.

To learn more about other IBF professional development program, please  visit: www.ibf.org

Rishi Trivedi
Regional Country Manager – India
Institute of Business Forecasting & Planning, IBF

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