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Don't Ignore the 'People' Part of S&OP

People and their corporate cultures are essential elements in crafting an effective sales and operations planning process, says Eric Kulikowski, senior director of supply chain optimization with Philips Home Healthcare Solutions.

Don’t Ignore the 'People' Part of S&OP

The right approach to sales and operations planning involves a mixture of culture, process and technology, says Kulikowski. “When you look at engineering business processes,” he says, “it’s very easy to jump to the technology part of the solution. Whereas technology is really an enabler.”

The real key lies in emphasizing human relationships – an aspect of business-process change that doesn’t get enough attention, in Kulikowski’s view. Philips, for one, lacked an integrated process that involved sales, marketing, operations, finance and customer service. “It was very old school,” he says. “We assumed that people understood the role of each job, and the impacts of decisions in those areas.”

The company came to realize the importance of communicating across divisions. If sales decides to give away free devices, for example, it needs to factor in the impact of that action on manufacturing. “Those are conversations that never would have occurred in the past,” Kulikowski says.

There was some hesitation at the outset about the new approach. The company was exposing parts of the organization to full view for the first time. It had never before publicized forecast accuracy, for example, or made experts in that process subject to judgment about their performance. In addition, finance and operations had to be involved in a collaborative fashion, “rather than throwing data [over the fence].”

Collaboration began with team-based activities. People were given the opportunity to get to know one another, including the strengths, weaknesses and concerns of each individual. The idea, says Kulikowski, was “to create the team first, discuss the process second, them move forward with technology.” In the process, employees began to get more comfortable, and a sense of camaraderie emerged. All parts of the company came together to discuss the sales forecast, in a “virtual meeting.”

To view the video in its entirety, click here

Keywords: supply chain, supply chain management, S&OP, sales and operations planning, supply chain planning, supply chain collaboration 

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