This article is taken from the book, Practical Guide to Sales & Operations Planning (S&OP/IBP). It’s currently available at a special introductory price. Get a copy here before the price increases.
Collaboration and involvement from people outside of one’s own role become very important in the complex dance of business operations, especially when it comes to Sales and Operations Planning (S&OP).
Imagine that a carefully thought-out forecast fails because important details about a last-minute marketing strategy are not shared, or a new product fails to launch because they did not have a piece of information from sourcing. These mistakes often happen when people and groups work alone, and it shows how important it is to have a structured way of coordinating across functions.
“Real-life problems often make it hard to work together smoothly”
Even though every company always says it is important to break down functional silos and build up communication, real-life problems often make it hard to work together smoothly. This realization shows how important it is for companies to have a structured way of achieving this cross-functional alignment.
When functions work together, each one affects the other, kind of like seeing all the puzzles put together instead of just a piece. This synergy could show up as a huge sale, less product that does not sell quickly, or the ability to find new synergies to cut costs. Without good communication and participation, a process that starts without involving other departments can end up putting extra work on them, which can lead to extra costs and missed chances.
Effective collaboration and cross-functional involvement are key to the success of mature Sales and Operations Planning (S&OP) processes. A mature process creates a unified way for the company to communicate better and reach its goals.
What Exactly Does Strong Teamwork Look Like?
- S&OP Goals Are in Line with Each Other: To work together well, everyone needs to be on the same page about the S&OP goals. To be committed to a cross-functional method, the functions that are taking part must give up old ways of doing things and trust that the S&OP process will bring benefits. This connection makes sure that everyone is working toward the same goal, which brings together and makes sense of different business functions.
- Supporting Mindsets and Behaviors: Adopting mindsets and behaviors that fully support the stated process is a key trait for high-performing cross-functional S&OP teams. To do this, silos need to be broken down, and a setting needs to be created where people from, say, the Commercial and Supply Chain or Finance see themselves as equal partners. Adopting a helpful attitude and working together makes S&OP stronger, letting ideas and suggestions from different departments fit together easily.
- Active Participation: Active participation is a must in an S&OP process that works. True alignment makes sure that all activities are focused on the company’s main goals and are coordinated between different functional areas. If all stakeholders are not involved, there could be differences in the amount, mix, location, or timing of products, which could hurt total performance.
Collaboration in mature S&OP processes is more than just working together; it includes having the same goals and having an organizational mindset that values working together to achieve those goals. Businesses can get the most out of S&OP by making sure everyone is on the same page, encouraging helpful thoughts and actions, and encouraging active involvement. This will increase efficiency, flexibility, and long-term success.
How do I Get Functions to Start Working Together?
To get people from different departments to work together and be involved in Sales and Operations Planning (S&OP), you need a plan that considers differences in culture, skills, and communication. To help foster this collaboration, here are seven steps you can take:
- Cultural Brokers and Change Catalysts: Recognize people in the company who are great at making connections between areas. These “cultural brokers” or “change catalysts” can help teams work together better by working with people from different backgrounds, stepping into different roles, and making links.
- Upskill for Cross-Silo Success: Give functional leaders on diverse teams training and mentoring programs to help them get better at their jobs. Training can teach people how to ask open-ended, fair questions, think about other points of view, and see things in a bigger picture.
- Encourage Communication to Build Trust: To build trust among cross-functional teams, encourage open communication. Promoting open communication helps team members who do not know each other well get over trust problems that come up because they do not know each other well.
- Set Up More Structure: Even though it may seem like speed is important, structure is actually very important for cross-functional teams to work well. Set clear jobs, goals, and responsibilities to make it possible for people to work together. Using a structured method helps S&OP become more mature.
- Use Meaningful Metrics: Connect the changing performance of your team to the goals and key performance indicators (KPIs) of your company. Set clear, cross-functional goals and measurements that are in line with the organization’s objectives. This makes sure that the team’s work helps the project succeed as a whole.
- Acknowledge and Reward Success: Use KPIs to track and acknowledge growth and success. Leaders should praise individuals or groups for doing a great job, and stress how important cross-functional collaboration is, and how it can help the company.
- Choose the Right Technology: Spend money on teamwork and communication tools that make it easy for teams from different departments to work together. To improve communication and teamwork, use tools like screen sharing, video chat, and process management apps.
By following these steps, companies can create a setting where people can work together in the S&OP process, which will lead to better communication, trust, and organized teamwork between different departments. This method helps make S&OP more mature and increases the success of the company.
Conclusion
In S&OP, cross-functional collaboration is not just about sharing wins; it is a strategic must to see how actions affect the whole picture. It requires removing barriers to create an environment where departments are not only contributors but also active participants in the organization’s success.
IBF’s new book Practical Guide to Sales & Operations Planning is a fantastic resource to learn best practices in S&OP and IBP from world-leading planning experts. You’ll learn how to start an S&OP/IBP process, progress it along the maturity curve, and use it to drive effective decision making that has a direct impact on KPIs like inventory turns, forecast accuracy, cash flow, customer service and more