S&OP Study Prelim Summary Charts used in the Why Is S&OP So Hard? report
Sales and Operations Planning (S&OP), the cross-functional process to align the commercial processes of sales and marketing with the operational processes of supply and manufacturing, is having a renaissance. It is not a new process. Companies have worked on these processes for over 35 years; but today, only one out of two companies believes that their processes are effective.
Why is it so hard? Answering this question is the goal of this report.
Figure 3. Sales & Operations Planning Process Overview
A mature S&OP process improves organizational agility and alignment; but, this requires focus and clear leadership over a period of at least three to five years. A higher level of success happens when the S&OP processes report to a profit center manager and decision making is aligned to the commercial processes. With one in two companies aligning S&OP to product line production, not to commercial processes, it is difficult to drive maturity. Ideally, the leader of the S&OP process understands both the commercial drivers, and the supply constraints, and can make the pivot; but this is seldom the reality.
Today, due to popularity, companies have more than one S&OP process. In this research, a multinational company will have four to six separate and distinct S&OP processes with different maturity levels. While many will try to drive improvements with big technology initiatives, based on a decade of research on the topic, we recommend starting by tackling the change management issues. In this report, we share five barriers, and four misconceptions while giving supporting research to challenge change in the organization.