Drill down into the details of an S&OP process- definition, function, process, and useful tips for a successful S&OP system.

1. AvercastLLC @avercast
WhatIsS&OPProcess?

2. DickLingwasthefirsttocointhephrase
“S&OP”backinthe1980s.Hehaswritten
booksexplainingtheprocessandisa
HowDidS&OPGetStarted?
professionalconsultantthatmanybignameslooktofor
S&OPsetupwithintheirbusiness.

3. AsimpledefinitionofS&OPisthecollaborationandexecutive
decision-makingprocessofsalesforecasting,supplyplanning,
anddemandplanning,meetingfinancialconsiderationsandthe
requirementsofeachindividualdivision.
WhatisanS&OPProcess?

4. TheNeedforS&OP
S&OPisn’tonlyforcompaniesstrugglingwithcommunication.It’samethodto
enhancetheprocessesofeachsector,andachieveoverarchingcompany
objectives.
DickLingputsitbestinhisbookOrchestratingSuccess:ImproveControlofthe
BusinesswithSales&OperationsPlanning:
“Sales&OperationsPlanningprovidesthegeneralandhisstaffameansofgaining
morecontrol.Withit,theycanoperatetheirbusinessmoreeffectively:set
attainableobjective,seeconsequences,evaluatealternatives,communicate
approvedplans,measureperformance,andachievepredictedresults.”

5. TheS&OPmeetingshouldbeheldatleastoncemonthlyand
includethesales,manufacturing,business,andfinanceunits.
GeneralplanningofS&OPencompassescompanypolicies,
strategicobjectives,financialconstraints,demandforecasts,
andcapacityconstraints.
S&OPMeetings

6. AtypicalS&OPexecutivemeetingagendashouldencompass
changesthatoccurredinthepastmonth,stateoffinancialgoals,
risksthatshouldbeaddressed,decisionstobemade,production
performance,constraints,andoverviewoflongtermplans.
TheoverallobjectiveofS&OPmeetingsistoimprovethe
processesofeachdivisionandachieveoptimalperformance.
S&OPMeetings

7. S&OPMonthlyOverview

8. Oftentimes,theprocessstartsstrongbutfallsintopitsthatinhibitgrowth.Somethings
thatcouldpotentiallyslowtheplanningdown*:
— LackofunderstandingofS&OP(beeducatedandpullinconsultantsifneeded).
— WidescopeoftypicalS&OPprocessmakesitdifficulttotransitionbecauseit
encompassesmanypartsoftheorganization.
— Losingpacewithdrasticchangesthatoccurduringtheprocess(globalization,
outsourcing,offshoring,andincreasednetworkedorganizations).
— Focusingonprocessandsystems,whileforgettingaboutthepeopleside.
— LawofPerspective-Yourprocessisgreatforsupplychain,butifit’sdisconnectedfrom
Salesteam,therecouldbeapotentialforproblems.
*TakenfromBuildingtheBridgeandMakingtheProcessStick byDuncanAlexander.
AvoidthePitfalls

9. — Focusactionsandthoughtsmoreonrevenue,growth,categorydevelopment,brands,
andchannelsversusforecasterror&inventoryrecordaccuracyKPIs.
— Engageallbusinessfunctionstoachievebetterparticipate;S&OPmanagershouldbe
facilitator.
— Focusmeetingsonexpectationstokeepmeetingswithinareasonabletimeframe.
— Talkforecastindollars,ifithelpalldivisionsunderstandanaccurateforecast.
— Fullteammeetingshouldhaveagoalofformingapartnershipplan;astrategyusedto
developthefinancialforecast.
(TipstakenfromS&OPStepbyStepbyJennySchneider)
TipsforSuccessfulS&OPProcess