S&OP, the process used to match supply and demand and align business strategy, consistently ranks as a top priority for management teams. But companies often spend three to five years to reach mid-level S&OP maturity, research has shown.
This may be because we’ve done a poor job of setting reachable goals (and celebrating our successes, too). No one would expect a child to go from preschool to graduate school in one step. Reaching next-level S&OP maturity isn’t much different: a pathway of consecutive goals with some bumps and bruises along the way.
Six key roadblocks to S&OP success, listed below, are best tackled in small, reachable pieces. Set improvement goals for each, and check them off as you go:
Lack of executive involvement
Executives must internalize the S&OP process so that they “own” it. Best-in-class S&OP processes have full support and active involvement starting at the top.
Goal: Talk about the “why” and “how” of S&OP. Clearly communicate the value, and educate the entire team — especially executives. Take on the role of change agent, and be the force that pushes S&OP forward in your organization.
Lack of cross-functional alignment
This is a reward structure issue. The way functions are measured and rewarded must be addressed to ensure everyone is marching toward the same objective.
Goal: Adapt the measurement structure to promote cross-functional collaboration.
No “quick fix”
You can’t buy an S&OP process off the shelf and nail it up in six months. Your business is unique and so will be the process you implement to balance supply and demand and align your company’s financial strategy.
Goal: Develop and embrace a long-term strategy (and roadmap) that empowers you to muscle past sticking points and reach a mature, best-in-class process.
Microsoft Excel (and Access)
A large percentage of companies report their S&OP-enabling technology includes Microsoft Excel and Access.
Goal: Eliminate any reliance on tools that have proven to be universally error-prone and undermining to cross-functional integration of processes and data.
Lack of a technology roadmap
Companies that achieve best-in-class S&OP success are more likely to use tools tailored specifically to S&OP.
Goal: Establish a technology roadmap that matches the maturity phases of your S&OP journey — and includes a plan to implement a platform designed to facilitate and support your S&OP process goals both now and into the future.
Inability to execute
A plan that can’t be translated to how a product is produced and sold won’t be executed and won’t be used. Demand and supply plan convergence is enabled by an integrated technology platform that lets everyone work from the same playbook while addressing planning challenges.
Goal: Rather than whipping up high-level aggregate plans, create playbooks that translate your plan at the detailed execution level that adheres to actual production, procurement and distribution constraints.
Henry Canitz is director of product marketing and business development for Logility.
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