Executive Briefings

How S&OP Can Bring Your Organization Together

Too many companies are still plagued by a "siloed" mentality which keeps various functions from collaborating fully on demand planning. But Arnold Mark Wells, principal of End-to-End Analytics, sees reason for hope.

Wells views sales and operations planning as "a decision process with several sub-processes." Chief among them is the anticipation of market requirements, through such disciplines as demand planning and forecasting. But companies need to remember that S&OP requires the participation of multiple partners, including those responsible for supply and contract management, in the chain. The challenge, Wells says, lies in making sure that they are fully involved.

S&OP is all about eliminating the unscientific assumptions that tend to guide decision-making. They need to be replaced by a full understanding of the constraints that exist in a given sourcing situation, along with the opportunities that can be realized as a result.

Visibility, of course, depends on good communications among supply-chain partners. S&OP provides companies with the excuse to achieve it. In looking at supply management, Wells says, companies need first to analyze the current sourcing situation, in terms of both risk and opportunities. They should consider the full range of terms and conditions that apply to a sourcing relationship. At the same time, those in supplier management need to be having an ongoing conversation with sales, to discuss how constraints should be factored into the picture.

Given the natural tendency toward turf protection, sales could be threatened by such an approach. The solution, says Wells, is transparency. Sales and marketing must understand where the constraints are, and supplier managers need to stress their interest in working with them to reach a common goal. "That's what gets their attention," he says.

A certain amount of business-process change is required to implement an effective S&OP initiative. Technology, says Wells, can help to enable such change. One key to success is aligning the metrics and incentives that guide various functions. In addition, participants need to address the full range of relevant topics: working capital, finance, products, brands, marketing, channels and demand planning among them. Armed with such intelligence, marketing can understand how its goals to boost sales or enter new markets will be translated in terms of manufacturing, distribution and sourcing.

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Keywords: Sales & Operations Planning, Business Intelligence & Analytics, Business Process Management, Collaboration & Integration, Customer Relationship Mgmt., Event Management, Forecasting & Demand Planning, SC Finance & Revenue Mgmt., SC Planning & Optimization, Supply Chain Visibility, Global Supply Chain Management, Supply Chain Analysis & Consulting, HR & Labor Management, Supply Chain Security & Risk Mgmt, Business Strategy Alignment, IT supply chain, supply chain management IT, value chain IT, supply chain solutions, supply chain systems, sales and operations planning, supply chain visibility, business intelligence, business process management, demand planning and forecasting

Wells views sales and operations planning as "a decision process with several sub-processes." Chief among them is the anticipation of market requirements, through such disciplines as demand planning and forecasting. But companies need to remember that S&OP requires the participation of multiple partners, including those responsible for supply and contract management, in the chain. The challenge, Wells says, lies in making sure that they are fully involved.

S&OP is all about eliminating the unscientific assumptions that tend to guide decision-making. They need to be replaced by a full understanding of the constraints that exist in a given sourcing situation, along with the opportunities that can be realized as a result.

Visibility, of course, depends on good communications among supply-chain partners. S&OP provides companies with the excuse to achieve it. In looking at supply management, Wells says, companies need first to analyze the current sourcing situation, in terms of both risk and opportunities. They should consider the full range of terms and conditions that apply to a sourcing relationship. At the same time, those in supplier management need to be having an ongoing conversation with sales, to discuss how constraints should be factored into the picture.

Given the natural tendency toward turf protection, sales could be threatened by such an approach. The solution, says Wells, is transparency. Sales and marketing must understand where the constraints are, and supplier managers need to stress their interest in working with them to reach a common goal. "That's what gets their attention," he says.

A certain amount of business-process change is required to implement an effective S&OP initiative. Technology, says Wells, can help to enable such change. One key to success is aligning the metrics and incentives that guide various functions. In addition, participants need to address the full range of relevant topics: working capital, finance, products, brands, marketing, channels and demand planning among them. Armed with such intelligence, marketing can understand how its goals to boost sales or enter new markets will be translated in terms of manufacturing, distribution and sourcing.

To view video in its entirety, click here


Keywords: Sales & Operations Planning, Business Intelligence & Analytics, Business Process Management, Collaboration & Integration, Customer Relationship Mgmt., Event Management, Forecasting & Demand Planning, SC Finance & Revenue Mgmt., SC Planning & Optimization, Supply Chain Visibility, Global Supply Chain Management, Supply Chain Analysis & Consulting, HR & Labor Management, Supply Chain Security & Risk Mgmt, Business Strategy Alignment, IT supply chain, supply chain management IT, value chain IT, supply chain solutions, supply chain systems, sales and operations planning, supply chain visibility, business intelligence, business process management, demand planning and forecasting