Sales and operations planning is a living, breathing process that naturally grows and evolves over time. Nevertheless, while it’s expected that companies would adapt their S&OP processes to meet the unique needs of the business, it’s important to maintain the application’s core tenets that apply to every organization.    

As a business evolves with time, its S&OP process may no longer resemble what was originally implemented. To avoid stagnation, and ensure that the discipline always represents the organization’s current state and future goals, it’s important to periodically complete an S&OP health check. That involves completion of an honest and comprehensive review of the entire S&OP process, to ensure that it’s continuing to provide the expected benefits, and determine key areas for improvement.

Optimizing S&OP ensures cohesiveness throughout the organization. When assessing an existing planning process, the questions should be designed to detect imbalances between demand and supply plans, sales and operations executions, strategic decisions and the overall business plan.

In completing the assessment of your S&OP process, honesty and transparency are paramount. The goal is not to come away from the assessment with a “perfect” score, but to gain a clear and unbiased perspective. 

Understanding the organization’s current state and identifying the need for improvement is the first step to achieving S&OP success. This requires significant process expertise, whether within the business or from a third-party source. If you lack adequate in-house process expertise, consider reaching out to third-party S&OP experts who can support your self-assessment and guide you toward the appropriate actions. 

Before completing this questionnaire, assemble a group of S&OP process experts and other key stakeholders. It would be helpful to involve leadership from all areas of the business, to ensure cohesiveness and reduce organizational silos. Once you’ve compiled your review board, consider the following statements and evaluate whether they apply to your company’s S&OP process: 

1. Our S&OP cycle consists of a product or assortment review, demand meeting, supply meeting, partnership/pre-meeting and executive meeting.
2. Our meetings include performance tracking, but primarily discuss forward planning for three to18 months in the future.
3. Our process is focused on decision-making.
4. Our discussions cover both volumetric (cases/eaches) and monetary (dollars) outlooks.
5. Our process is the primary tool used to mediate all major supply and demand issues.
6. We arrive at the executive meeting with potential scenarios to address problems discovered earlier in the cycle.
7. Our process has consistent executive support and engagement.
8. Our process has consistent participation and engagement from functional stakeholders.
9. There is a written policy document detailing participants, responsibilities, timing and decision-making thresholds for each step in the process.
10. Our S&OP team and sub-process owners feel empowered to make decisions that fall below the threshold that requires executive review.
11. S&OP allows our company to achieve higher customer fill rates, lower inventory, shorter customer lead times and/or more efficient manufacturing.
12. Our process uses and produces trustworthy data.

If upon completing the above questionnaire, you find that many of the statements don’t apply to your company’s S&OP process, don’t worry! If it has been some time since you have reviewed your S&OP, it’s unlikely that you would answer “yes” to all the questions. What this means is that it might be time to adjust or even completely relaunch S&OP within your organization. Once you know which areas need improvement based on the assessment, you can begin targeting them and create a process that breaks down silos and is aligned with your current state and future goals.

A one-time health check is not enough. As the final step in your process improvement, consider establishing a regular cadence to assess your S&OP and focus future efforts. Continued S&OP success relies upon a culture of continuous improvement. Allow this exercise to be a step toward ingraining that culture into your company.

Steven Walter is senior manager of consulting with enVista.