Regardless of the disruptions that COVID created, the pandemic was a blessing in disguise for the supply chain discipline, and particularly for S&OP.
The best way to appreciate something is to realize the impact of its absence or malfunction. COVID made us all acutely aware of the importance of all aspects of the supply chain. Schoolchildren, in their remote classes, were taught about the need to balance supply and demand, and saw first-hand what happens when it goes wrong. The toilet paper hoarding frenzy made the public aware of core supply chain concept: the bullwhip effect.
The increased awareness that COVID created represents a renaissance for the supply chain field. It is up to the professionals in this field to maintain this momentum and continuously drive supply chain advancements.
This is helping not only to bring more people to the field but also to start paving elevated career paths for them. Other than the global increased awareness of the importance of the supply chain, below are the major changes driven by COVID:
1) Ad Hoc Cross-Functional Training
The major disruptions created an unusual phenomenon of ad hoc cross functional training that exists to this day. By training, I mean genuine professional curiosity for the various functions to learn about cross-functional constraints and how everything is interrelated.
It all started with the various segments of the business catching up on the intricacies of the supply chain. For many, Supply Chain Management was limited to order entry. Suddenly, concepts like lead time, forecast accuracy, inventory allocation, and distribution requirement planning started to be understood.
Also, financial acumen increased amongst S&OP participants as expediting and transportation costs in general reached a record high. The danger of not delivering client needs became another key theme. Post COVID, we are seeing an ongoing, stronger collaboration amongst S&OP cross-functional participants in S&OP.
2) Enhanced Process Maturity
In addition to the increased supply chain awareness that COVID created, risk mitigation became a key focus. Concepts that were previously unique to vanguard S&OP processes at the highest maturity level are starting to be embraced by less mature planning organizations.
The quality of the output might not be optimal but companies nonetheless are increasingly attempting to stress test their assumptions and conduct scenario planning to better mitigate risks.
3) Broadened Internal Planning Scope
The classic hierarchy amongst the various planning horizons has flattened. The pandemic forced a realization that Master Scheduling, Material Requirement Planning, Rough-Cut Capacity Planning, and Capacity Requirement Planning necessitate a stronger symbiotic relationship with S&OP. With that, the internal scope of the planning processes has broadened.
4) Broadened External Planning Scope
Many companies realized that agile planning necessitates extending the planning scope outside the walls of the organization. This mindset can be seen in practice with enhanced collaboration with key vendors (CPFR) and by increasingly leveraging outside data sources and research.
While I hope we never have to face a pandemic like COVID-19, as an S&OP practitioner and supply chain professional I hope we don’t lose the momentum these two fields are currently enjoying so we can face any future black swan events with more grace and agility than 2020.
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