Sales and operations planning (S&OP) is the only process that brings together an entire organization, from factory to chief executive officer, says Phull. In addition, it extends beyond a company's walls to embrace key suppliers and other supply-chain partners. The ultimate goal is to drive consensus among all of those entities.
As compelling as the concept might be, not every company has succeeded in implementing an S&OP effort. According to Phull, some organizations "spend too much time overthinking the tools and rudimentary aspects, and not enough time on actually changing the culture of the organization."
Companies need to get out of the "tactical, firefighting" mode and address deeper aspects of their operations, Phull says. "Too often they are finding themselves reinventing. Sixty percent of the effort is actually changing the culture."
One way to go wrong with S&OP is to approach it as a technology solution rather than a business process. "Most people think of it as, "˜Show me the easy button,'" Phull says. "There is none. There are a lot of tough decisions that need to be made."
Done properly, S&OP brings all of the key issues to the table and creates transparency throughout the organization. But most companies are not equipped to address the root causes of their problems, such as what is driving supplier performance.
Phull's tips for success include the creation of a road map, coupled with an end vision that connects organizations with partners outside their four walls. Managers must create an "ecosystem" that embraces all partners and regions. At the same time, they should avoid a "cookie cutter" approach. "Each division or region may have nuances they need to be able to tweak, says Phull.
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Keywords: supply chain, supply chain management, S&OP, sales and operations planning, supply chain planning, supply chain risk management
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