John Gallucci

John Gallucci

If you listen to the buzz about S&OP at an IBF Conference, you will hear a repeated theme.  This seemingly endless refrain is recited by Planners, Vice Presidents, and everyone in-between.   You all know the words, so say it with me, “If you want S&OP to succeed, you need  Senior Management’s support and ownership.”  Achieving this seems simple enough.  There is only one step required to gain success, right?  So, why is this challenge so widespread?

I have listened to many IBF members discuss their frustrations on this topic.  I have had my own trials as well.  The majority of feedback is that Leadership does not understand the value of the concept.  Is there truth to this?

Most cases that I have examined rely on a common approach that leads to this familiar result.  It begins by someone on the Planning Team asking for Senior Management exposure to “pitch” the S&OP concept.  With significant poise and confidence, the idea is presented.  Some leaders listen attentively, some shoot holes in the logic, while others check e-mails on their Blackberry.  The Planning Team resurfaces at the next IBF event, looking for more solutions.

This approach often fails because S&OP is strategic by nature.  Senior Management, the requested audience, is responsible for setting strategy.  The concept will not stand much chance when the Planning Team is indicating that  Senior Management’s current strategies are  not effective, and that a new solution like S&OP is needed.

Try this instead:

1)  Before you go to Senior Management, start by discussing S&OP with your functional leader.  This could be a VP Supply Chain, VP Sales, etc.  Schedule an hour, and review the concept.  Listen to their feedback.  Provide them with documentation on how it works, and what the potential impact can be.  Bring recent examples of situations that have diminished profit,  such as excess inventory or lost sales.  Make your stand on the point that an effective S&OP Process would have eliminated these issues.  Provide a dollarized impact in every possible example.   Gaining alignment may take months, but stay persistent.

2)  Once your functional leader is convinced, ask them to present the impact of S&OP to the appropriate functional Board Member (COO, GM, etc.).  Summarize and dollarize the impact.  Make this person your S&OP Champion.  Let her drive it as an agenda item at the next Board Meeting.  It may take several discussions before the Board aligns on this initiative.  However, if you have provided her with a solid case, she will stay persistent when it counts, which increases the chance of Board approval.

Once Senior Management aligns on piloting S&OP, the rest of the road is much easier to traverse.  Remember that most success stories are not built in one day.  The same cannot be said for failures!

John A. Gallucci
Director, Demand Planning
Nestle Infant Nutrition