In my years of experience leading implementation projects for such vital processes as S&OP, I have noticed that Tom Wallace and Bob Stahl were right when they indicated in their S&OP handbook that the implementation effort is 65% changing mindsets, 25% process methodology and the remaining 10%, systems used to make the process work.
Without having the heads and hearts of key people invested in the process, S&OP is doomed to failure.
S&OP Fights Against Chaos
With the S&OP process, we can give more clarity to how the work of each person in the organization influences company goals. Through the processes of demand planning, capacity analysis and inventory calculation, each sector leader can reveal to their teams the overall strategy and how the day to day activities implement it.
This is important because, sometimes, people who are on the production line, or far below where decisions are made, can not see how their daily work is aligned with the company’s global goals. The S&OP process gives us that clarity up and down the organization.
Lack Of Confidence – Why People Resist S&OP
When the S&OP process is first implemented in an enterprise, there is an initial resistance to change. There’s resistance to sharing information, resistance to collaboration, resistance to attending meeting, and resistance to sharing problems in the pre-S&OP meetings.
Personally I think that this resistance is due to lack of self-confidence concerning the people involved in the process. This lack of confidence makes them self-conscious, making them think only of themselves. They are hesitant to engage for fear of getting it wrong. This, of course, is not conducive to the teamwork and collaboration required for S&OP.
How can you improve people’s confidence? By consistently indicating where they contribute in the process, and indicating that with their methodical work of bringing true inputs to the process, you can obtain quality outputs and therefore reach the best decision.
The S&OP Calendar Is The Best Tool For Leadership
Reading the Winter 2011 – 2012 issue of the Journal of Business Forecasting, I found a very revealing article by John E. Boyer regarding the Centralization or Decentralization of the process. In the article there is an annual calendar showing dates, times, and the names of important people who interact with the process. This is an example of order in chaos. See the calendar below:
The important people of the company know a year in advance when they must be present to bring all the possible inputs that contribute to the process.
The following thoughts appear in the mind of each person:
S&OP Coordinator: Joe knows that he must bring all the pieces together so that the best decision can be made.
Sales and Marketing: Sue, Jack, Marvin, Wally, etc., know that on the indicated dates they must contribute all the necessary inputs to be able to validate the sales forecast that will be used to perform the capacity analysis.
Production: The members of production must know all the details by which the production process and logistics may not be able to meet demand. I.e, they present capacity and logistics limitations. They should contribute with possible solutions that will be addressed in the Pre-Meeting. So Wendy, Joe, John, Randy, etc. must be prepared.
The general direction must give clarity about the strategy and must be committed to the process so that everyone is on the same page.
We can see here that a simple calendar is one of the main leadership tools of the process. It generates order and fosters commitment. If any of the people involved cannot attend the meeting, there is enough time to assign a replacement at that meeting. This means that there is no reason for the right people not to attend the S&OP meetings.
This type of calendar should be posted on the internal network of the company. This is useful for multinational companies where different regions have their own planning processes. It means they can sit in on meetings and learn how it works so they can develop their own S&OP process.
All Members Can Benefit
Sometimes the S&OP coordinator is so involved in their work of “numbers” that they must force themselves to step back and learn new methods of working. These meetings, published for all those responsible for S&OP in their regions, can be a great input for improving their management.
The S&OP coordinator for the USA can improve their management by attending one of the pre-meetings of their peers in Australia or South America and seeing what they do better. You’ll often pick up new ideas you never thought about.
For those who are starting out on this journey, I invite you to demonstrate your ability to unite information, unite people, unite expectations, and identify new ways of working in the process that fosters collaborative decision making.
To learn more about effective S&OP, come to IBF’s Business Planning, Forecasting & S&OP Best Practices Conference in Orlando from October 20-23, 2019. The biggest and best event of it’s kind, you’ll hear leaders in the field reveal best practices and avant-guard techniques, plus a very special keynote speaker.