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According to industry research, most S&OP users cannot create a consistently achievable S&OP plan. A Supply Chain Insights 2015 survey revealed that only 30 percent of manufacturers are “nearly always” or “most of the time” able to effectively tie S&OP planning to execution. Gartner Research confirms that “The No. 1 challenge among manufacturing companies is connecting sales and operations plan (S&OP) to operational plan/execution.”
A critical gap between S&OP and the operational plan often relegates S&OP to a passive planning exercise, rather than actively connecting to results. In monthly S&OP meetings, managers take strategic decisions such as increasing revenue or adding new products that don’t always translate into operational plans that can be practically executed downstream. This shouldn’t be too surprising because companies usually have separate planning and operations models that do not map to each other. They plan with one and execute with the other, creating a gap that is difficult to bridge.
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