At IBF’s S&OP Best Practices Conference in Chicago, we put seven S&OP leaders in a room together, threw some talking points at them and set the cameras rolling. The following are some highlights from that conversation.
On How S&OP Has Changed Post-COVID
Debbie Climer: Companies were so stress-tested by COVID and failed so miserably that everyone in supply chain now has elevated importance and status. It really showed where the deficiencies were. A lot of things remained hidden when we were in a stable environment and being suddenly thrown into such volatility forces companies to start thinking about things differently.
Imane Sabeh: S&OP is getting more attention than ever before and it’s a great thing because it tends to be associated with supply chain when it really is not; it is a cross-functional, collaborative process. The surprising thing is that the voice of supply chain is now being heard across the different functions. So there’s a lot of momentum out there and we need to build on that. It is eye-opening to see how important S&OP is becoming.
On The Increased Recognition Of The Field
Debbie Climer: It’s been really good that the field is now exciting for young people. When I was young we didn’t even have supply chain as a major. Now it’s an exciting career because there’s so much innovation and so much more technology. This is not the supply chain of the past; it’s exciting, it’s new, it’s innovative and imaginative. One of the things that struck me [at this IBF Conference] is how many young people are coming in who are new to S&OP and moving the field forward. It was really good to hear everyone’s stories and where they are on their journey.
Scott Salzler: Years ago when I started doing S&OP it was a very small niche – you didn’t really have S&OP jobs out there that you could go and apply for. Now you know every company is out there promoting the discipline and promoting it is a career.
On The Rise Of S&OE
Michael Zinkewich: S&OE is about defining your time horizons, making sure that S&OP is looking further out, and how short term planning and S&OP work together.
Rich Gordon: It’s nice to see S&OE emerging as an upgraded version of the Master Plan – that was eye-opening for me.
Scott Salzer: It’s nice to see focus on the separation between those two activities because for newer people you get easily caught up in the S&OE piece of it because the near term is always more pressing. It’s more difficult to focus on longer range thinking, so it’s good to see S&OE and S&OP treated distinctly.
Debbie Climer: We’ve really seen the need for a short-term execution process for your S&OP or IBP to work, to avoid your S&OP or IBP becoming a monthly S&OE process.
Eric Wilson: When companies start doing weekly S&OP, it’s because they don’t have that tactical execution component like S&OE.
Misty Eldridge: During the pandemic, companies were having to go into that [making S&OP weekly]. Post-pandemic they’ve decided they need to keep that short term planning execution but also get back their longer term S&OP.
What It Takes To Achieve Vanguard S&OP
Debbie Climer: It’s a business process so the best way to get the business to see the value of IBP or S&OP is to show how it helps manage the business, not just your supply chain. With that, the connection to Finance is really critical. I mean everything that we do is related to money right? So making that connection and bringing those pieces together is really important for a successful IBP or an S&OP process.
Misty Eldridge: Several presentations talked about how S&OP links to the bottom line and EBITDA, and how inventory relates to cash flow. It was great to hear presentations about how S&OP allows a business to do that as it encourages buy-in of the process and facilitates maturity. Product reviews are part of becoming a Vanguard S&OP organization. Top companies are talking about their products – that sets the tone of the next five ten years so why not talk about what you’re going to do with the strategy of your items. That’s huge.
Michael Zinkewich: The change management piece is key. S&OP requires cross-functional engagement and that requires talking the same language. For us at Beam Suntory it’s about making sure we have Marketing engaged, Finance engaged, and a lot of that comes down to training as it allows us to learn how to talk the same language.
Imane Sabeh: Financial teams should be part of that training because again, S&OP is not only a supply chain function, it is a business process that benefits everybody.
Michael Zincewich: Cross-training is absolutely key because it’s cross-functional teams that drive change management and engagement in the process. S&OP doesn’t come overnight and it’s never static – good S&OP requires continuous improvement and ongoing training is part of that.
On Evolving From Supply Chain To Value Chain
Scott Salzler: We’ve talked a lot about the very basics like getting through demand the review with a credible plan and working to one number. That’s all great but this conference is one of the first times I’ve heard the discussion of what comes next. You know, not just IBP or something like that but more of a of a directional change to a value stream focus. I’m really looking forward to seeing what the next step is.
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