I was the S&OP Champion when my company relocated to Wisconsin. What I encountered there was a cauldron of uncertainty, politics, and mistrust of an expensive ERP system. The plant wasn’t profitable. Fresh off two expansions that cost tens of millions of dollars and filled a tripled, machine-intensive footprint, the revenue growth to justify that new capacity had been slow to materialize. Pressure from corporate was intense and customers — many new to this expanding segment of the aerospace market — were highly demanding and yet unclear on the timing of their needs.

With on time delivery in the low 80s, monthly overtime breaking 20%, and the bottom line unmistakably red, the work environment was dysfunctional. Finger pointing, territorialism, and buck passing were the norm. Problems were tossed over silo walls. Operations felt they were overscheduled, Demand Planning felt that Sales was asking for too much too quickly, Sales was taking beatings from customers, and most importantly, the production floor had lost trust in management’s ability to plan.

The Wisconsin plant had been acquired in the late 2000s and was slow to fully integrate. A formerly family-run business, it had carved out a niche for itself in the aerospace market, priding itself on engineering prowess and customer responsiveness, largely at the expense of clear process and with little connection between long-term business planning and short-term execution. It appeared that the team prided itself on constant fire drills and seemed to enjoy working around or outside the ERP system to just barely meet delivery dates. Metrics were something to be kept green to avoid scrutiny. A long-tenured workforce had been able to rely on institutional knowledge and long hours to keep pace with a relatively stable mix and monthly shipments, but now, facing growth that would end up being 100% year over year, the cracks were starting to show and we were losing money, disappointing customers, and starting to turn over employees.

A broken culture, rapid growth, and incredibly complex products that snaked around dozens of workcenters called for management to align on goals for the next 12-18 months and a support staff that could trust their ERP system to do much of the heavy lifting. As it began to take shape, our solution became known as “The Recipe.”

The Recipe

  1. The Team
  2. Robust S&OP
  3. System Health
  4. Root Cause Analysis

1. The Team

Decades worth of leadership material has been crafted with myriad approaches to building high performing teams. I won’t attempt to write the next book here but getting the right players in the right roles laid the foundation for a turnaround. Clear direction, empowerment born of trust, and recruiting or developing people with a distaste for the status quo were key factors here. A focus on education, especially building planning, purchasing, and S&OP teams with ever-increasing CPIM (Certified in Production and Inventory Management) and CPF (Certified Professional Forecaster) certifications was vital to getting the team speaking the same language.

Several organizational design changes were made, but one of the most impactful was creating an S&OP champion role. As we grew, we added an S&OP analyst position that allowed the champion to focus more on cultural elements and continuous improvement while also developing bench strength. Committing resources to building the process sent a clear message that S&OP was how we intend to plan the long term future of the business, not in one-off conversations, lengthy emails, or games of telephone, but together, visually, and in a consistent monthly cadence. The new team structure and focus on education was foundational to incremental cultural growth.

2. Robust S&OP

S&OP, SIOP, IBP — whatever you want to call it — is a regular cycle of cross-functional mid-range planning that ends the period with a set of financial projections that the team is aligned to. Individual companies in diverse industries have their own set of unique challenges, but I’d struggle to name one that isn’t better off when their management teams share a common version of current reality, align on one projection of the future, make decisions together, hold each other accountable, and document and learn from their mistakes.

Sales funnel sensitivity analysis, cannibalization and take rates of new products, risk assessments, probabilistic rather than point forecasting, and scenario planning based on the resulting demand profiles all have their place. But ultimately, the leadership team must coalesce around a single plan and mercilessly execute it. If the plan changes in the next cycle based on new information, great! But without an aligned team, not only do you lose the benefits of diverse perspectives and skill sets rowing together, you often have functions actively working against each other (hopefully unintentionally).

A point about alignment: Beyond profitability, forecast accuracy, OTD, and the many other metrics S&OP impacts, a truly aligned team is the ultimate barometer of process success. If done right, S&OP isn’t a crippling structure that slows decision making or reduces agility — it’s a key enabler that connects 3-5-year business planning with the master scheduling level, linking execution to strategy. It’s a competitive advantage that wins business. It puts the resources in place to support the customer most profitably, allowing for less time firefighting and more time developing teams and innovating — from the plant leadership team to the factory floor.

As we built our S&OP process, our goal of management team alignment to achieve competitive advantage wasn’t a secret. It was the first slide of every meeting. Earning that alignment was slow and brutally difficult at times. Empathy was the first step to building trust. Teasing out and listening to the individual challenges faced by different functional heads built rapport, always from the point of view that S&OP can help make his life easier or improve her specific metrics. Knowing your audience is vital. Does the person need the 30,000-foot view of the overall impact to the business or are they concerned with how S&OP will affect their day to day life working in the ERP system? Trust is a prerequisite for constructive conflict, without which there is no true alignment. But in a toxic environment, conflict isn’t constructive at all. Thus, start with sincere, demonstrated empathy to build trust with each stakeholder. That trust enables constructive conflict, and that conflict enables the team to leave the room with voices heard, topics debated, actions documented, and one direction forward.

3. System Health

Given the challenges of frequent new product introductions, deep BOMs (Bills of Materials) with hundreds of individual SKUs, and routings that touched dozens of workcenters, building system trust among the floor and office staff was a long journey. A key success factor for the Recipe was its dual path approach. As S&OP matured, the demand signal improved and we built alignment on several key supply side data elements, both of which reduced noise for the master scheduling and execution levels of planning. Progressively having more of the right resources in the right areas also reduced level loading and reallocation gymnastics.

As we built a culture focused on exception monitoring and the right teams owning certain MRP health elements, the lower planning levels not only executed better and were able to highlight improvement opportunities, but took pride in outdoing each other in terms of system health. We visually tracked MRP health metrics over time, both internally and against other facilities, many of which had much less product complexity. The consistent message was that a positive trend was the end goal, not a sprint to blindly improve metrics. Employees were empowered to challenge the validity of metrics and we took action to add, change, or remove several of them to ensure they were actually driving business value.

At the S&OP level, improving system health enabled progressively trustworthy capacity outlooks and supplier forecasts. To build momentum while acknowledging data issues, we utilized simple red Xs and green check marks on supply planning slides to indicate whether we trusted the myriad data that rolled up into a particular value stream or work center’s capacity outlook. We maintained a sense of urgency by pointing out that red means we don’t have a way to confidently make machine, material, and labor decisions in this area of the factory, and that’s clearly a problem. The red Xs became less frequent as we closed actions to fix background data. Fear of red metrics slowly abated as we promoted them as opportunities to improve the business.

A cleaner system allowed for improvements such as an Available to Promise process (getting control of the “faucet”), schedule attainment and capacity forecast accuracy metrics (which over time vastly improved the relationship between operations and planning), and a better understanding of real customer demand via request date and total lead time analysis. Clearly delineating the roles of master scheduling vs. S&OP ensured conversations were had at the right level, responsibilities were understood, and planning functions were mutually supportive. We started with the supply chain team: for example, eliminating finger pointing between planning and purchasing and improving those metrics within our control prior to engaging with engineering, quality, and operations on their pieces of the puzzle. Ultimately, our system health became a celebrated point of pride, an example to other plants, and an absolutely critical enabler of our success.

4. Root Cause Analysis

 Like many companies striving to implement lean principles, we utilized 5-Whys, Pareto charts, performance boards, value stream maps, and Kaizen events to identify root causes and continuously improve. In some situations, there can be philosophic tension between lean and S&OP principles and their proponents. In our case, building trust on a one-on-one basis was vital to avoid that tension. Lean and S&OP are far from mutually exclusive concepts. Kanban sizing, line balancing, flow optimization, and Kaizen prioritization all beg for input from the commercial side of the business and are vastly more effective when undertaken with a management team that is aligned on the plant’s future.

Our root cause analyses and solutions were greatly improved by the first three elements of the Recipe. People with a continuous improvement mindset, not afraid to change or fail, are an obvious prerequisite. S&OP provided directional clarity. System health and a culture of exception monitoring both highlighted issues for root cause analysis (RCA) and enabled more robust problem solving.

Ultimately, getting value from root cause analysis requires a culture truly focused on improvement and following the truth wherever it leads you. In the previous environment, RCA was a check the box activity and one that conveniently never led to your team as a culprit. Building the trust to engage in conflict and get aligned on what’s important enabled the team to dig deep and develop lasting systematic solutions to problems.


From mid-2017 to mid-2019, plant revenue doubled. On time delivery climbed from the low 80s to a sustained 98%+. Inventory turns rose from 3.5 to 4.5. We improved from negative high single digits to positive low double digits in monthly operating income %. Lastly, and perhaps most meaningfully, we reduced direct labor overtime to low single digits. The floor had been working 20% + overtime for nearly a year and we had the morale and turnover to show for it, which was especially challenging with area unemployment near all-time lows. Reducing overtime to an acceptable level, even while we were shipping 2x what we had before, is a testament to the entire team and a point of substantial pride.

S&OP doesn’t work without being integrated both upstream with strategic planning and downstream with master scheduling. It doesn’t work without commitment to putting the right players in place. It doesn’t work in a political, siloed environment. But in conjunction with the right team, system health, and root cause analysis, it can help change the culture and turn around a business.

To develop your S&OP skills, there is no better training than IBF’s Forecasting, Demand Planning, & S&OP Live Online Training, held in May 2021. You’ll learn all aspects of the field from university professors and Directors of Supply Chain and Demand Planning at multinational companies. Pick and choose each module for $379 ($329 when you become an IBF member) or the full course plus exams to get IBF CPF certified. Find out more.