Companies looking to implement a demand planning or sales and operations planning (S&OP) process are in for a tremendous challenge. But the rewards make it well worth the trouble, says LaBombarda.
The key, she says, is not to view the effort as a linear process that goes through a number of predefined steps to a successful conclusion. Real change management is "a very iterative process." Managers need to be constantly monitoring their progress and adjusting tactics in line with experience. At the same time, they must never take their eyes off the ultimate goal: visibility of information, and the sharing of forecasts, throughout the company.
Human nature will erect roadblocks along the way. People can be uncomfortable about disclosing how they created a forecast. Or they'll resist changes in the way they execute key processes. But no practice, no matter how successful at the time it was devised, is set in stone. Business processes need to change as a company matures.
Resistance can be alleviated by involving everyone in the effort from beginning to end. "If you get to the finish line first but alone, you lose," says LaBombarda. "It's critical to bring the organization with you." From the start, companies should identify process "champions" who can guide the whole company through an effort that might not be entirely straightforward. All major projects should be taken in discrete phases, with each depending on the results of the one before it. "Start simple," she says, "and move toward the complex."
Some companies undertaking a demand-planning or S&OP project will do so with modest goals in mind, such as achieving better forecasting or sharing basic data. But the true implications are greater than that, says LaBombarda. The objective ought to be destruction of the corporate silos that prevent the various functions of a supply chain from working toward a common goal. S&OP can help marketing to understand the supply side, sales the process of fulfillment, and supply chain the upstream processes that cause so much "gyration" in the numbers. With S&OP, she says, "people understand what it takes to be profitable. They get energized."
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