This document discusses advancing S&OP maturity and why companies get stuck in early maturity stages. It summarizes the results of a 2016 global S&OP survey of 87 companies. The survey found that companies' historical cultural practices are the biggest barriers to progress. It also outlines focal points for improving processes, people and technology to advance S&OP maturity. These include advocating senior management training/participation, transforming company culture, and utilizing existing system functionality before adopting new software.
S&OP Maturity Comes Prior to Advance Planning Software
1. S&OP Maturity Comes Prior to
Advance Planning Software
Steven Hainey CPSM, CPIM, CPF,
MCIPS, C.P.M.
2. What’s Needed to Advance S&OP Maturity?
And why do so many companies get stuck
in the early maturity stages?
3. Row Labels
< $50M
USD
$50M to
$100M USD
$100M to
$250M USD
$250M to
$500M USD
$500M to
$1B USD
> $1B
USD
Grand
Total
Automotive 1 2 3
Chemicals 1 1 3 2 7 14
Consumer Products 3 1 4 1 3 11 23
Industrial Products 1 1 1 3 2 8
Logistics/Transportation 1 1 2
Manufacturer - Other 1 4 6 5 16
Medical Device 2 2 4
Pharmaceutical 3 3
Telecommunications 1 2 1 4
10 Additional Industries 3 2 2 1 2 10
Grand Total 10 11 16 9 7 34 87
To Get Some Answers a
Global S&OP Survey was Completed
S&OP B/U
Respondent Size:
Africa 1 1 1 3
Asia 1 1 1 4 7
Australia 2 1 3
Europe 2 5 6 3 2 8 26
North America 5 3 8 3 1 17 37
South America 2 1 1 2 2 3 11
Grand Total 10 11 16 9 7 34 87
11% 13% 18% 10% 8% 39% 100%
The responses to the 35 questions
were fascinating!
4. 2016 Global Survey:
People
Processes
Technology
• Companies’ historical cultural practices are
the biggest barriers that need overcome
• Seen across company sizes, industries, and
geographic regions
Largest Limiting Elements for Progress
Is all the S&OP work actually worth it?!?!
77%
2016 Global Survey Results N = 87
48%
29%
23%
5. • Improve customer service
levels by 1–5%
• More agile with shorter
lead-times by 5–25%
• Increase inventory turns by 5–25%
• Reduce direct operations and distribution
labor spend by 5–25%
Returns When Progressing S&OP Maturity
What’s your company’s financial impact with a
5% improvement for the above?
[1]
[1]
[1]
[1]
8. Businesses’ KPI 1-3 year changes with:
• Weak Knowledge & Involvement
Decline/Stagnate 32% & Strong Progress 12%
• Strong Knowledge & Involvement
Decline/Stagnate 3% & Strong Progress 31%
• Senior management’s time with S&OP has a high ROI !!!
• Alignment
• Collaboration
• Shared Duties
• Accountability
Management
Support
Some
Decline Stagnate
Some
Progress
Dramatic
Progress % Per Level
Weak 19% 13% 56% 12% 18%
Medium 6% 28% 55% 11% 41%
Strong 0% 3% 66% 31% 41%
Total 5% 15% 60% 20% 100%
ROI on Management’s Knowledge & Involvement
2016 Global Survey Results N = 87
Profitability, Revenue & Other KPIs Improvements
32%
9. Focal Points for People
• Advocate senior management
training & active participation
• Transform company cultural
• Continuously develop staff at
all levels and positions
• Hold all sites, departments, and individuals
accountable for S&OP deliverables
Constantly educate & challenge members to
contribute to company’s top objectives
10. What are the Process & Technology
Focus Areas During the
Early Stages of S&OP?!?!
11. Focal Points for Processes
• Center efforts around a
few common goals
• Implement standard
operating procedures and
training across functions and sites
• Assure alignment on system configuration,
data, and processing of transactions
Don’t procrastinate or become
complacent with current methods
12. Focal Points for Technology
• Utilize single system of record
• Analyze system data for
improvements with
existing tools available
• Utilize system functional and automated
processes where possible by questioning
historical assumptions
Start with the basics and
continue to build upon them
13. Reasons to Have a Coordinated S&OP
Commodity Price Changes
Is everyone in your boat rowing the
“correct direction together”?
14. • Lack of creditability with team,
customers & suppliers
• Costs of resources and working capital
• Need to develop a new plan to get out of the
unanticipated situations
• Time to recover and get back to the previous
state
• Small world with external individuals hearing
worst case scenarios of what occurred
Potential Issues of a Siloed Organization
15. Timing for Advance Planning Software?
3) Collaborative Planning should be the earliest
stage for Advanced Planning Software
Advance Planning Software
Implementation
Confirm alignment on objectives
and requirements first!
16. • Creates a strong foundation for
both the S&OP and new software
• Improves business processes,
base system training and data integrity
• Permits cross-functional teams to better
understand S&OP requirements and process
gaps prior to buying new software
of Waiting to Stage 3 Prior to Purchasing
What happens to software implementations
when these items aren’t done first?
17. • Bad business practices & data integrity
adversely impact software implementation
• Increased costs due to lack of internal
technical knowledge causing greater
external requirements
• Extended project time-lines when consultants have limited
guidance on how to configure and validate the setup
• Over estimating software capabilities which may not
address company’s shortfalls in historical cultural practices
When Purchasing Prior to Stage 3
Is your S&OP maturity at the right level for
implementing 3rd party software?
18. Technology is the largest industry
disruptor today!
• Amazon, Uber, Netflix, Tesla, ……
• Quicker advancements every year
• Shorter response & lead-times
• Business and consumer data doubling every 2 years
• Required capabilities for companies & employees to
succeed in today’s market are quickly changing
Reasons to Strive for Stage 4
Is your company’s S&OP able to
keeping up with the market?
19. • Who utilizes full automated
scheduling today?
• How long until software can handle
millions of strategic decision options
cost effectively?
• Today for free on your smartphone, you can get
chess and GPS navigation rule based programs.
These apps in the cloud can manage millions of
decisions in seconds.
Effects of Artificial Intelligence in Stage 4
It’s not if it going to happen, it’s when will
it happen within your industry?
It’s already happening!!!
20. What S&OP Elements and Attributes do you
need to focus on today
to realize a Competitive Advantage?
A Closing Question for You……..
21. Row Labels
< $50M
USD
$50M to
$100M USD
$100M to
$250M USD
$250M to
$500M USD
$500M to
$1B USD > $1B USD Grand Total
Manual Analytics 7 3 6 3 3 7 29
Semi-Automated Analytics 1 6 6 6 2 13 34
In-house Automated Analytics 2 2 2 2 10 18
Advanced Automated Analytics 2 4 6
Grand Total 10 11 16 9 7 34 87
2016 Global S&OP Survey Analytics & Progress
S&OP B/U
Respondent Size:
Some decline 2 1 2 5
Stagnate 1 3 1 4 1 3 13
Some progress 7 5 9 4 4 23 52
Dramatic progress 2 1 5 1 2 6 17
Grand Total 10 11 16 9 7 34 87
11% 13% 18% 10% 8% 39% 100%
22. Resources to Progress S&OP Maturity
• SAPICS, APICS, IBF and
consultant training
• 2016 Benchmarking
S&OP Survey
• Professionals networking on LinkedIn groups like
“Advancing S&OP / SIOP/ IBP through
Collaboration and Analytics”
• There are many good websites and podcasts that
cover these types of materials
Specific information supplied
within the white paper