In 24 years as a Supply Chain consultant in the FMCG business sector I have been part of many Sales & Operational Planning (S&OP) projects - working with clients to implement them has been relatively simple process but the difficulty is working with clients to get S&OP to deliver real business results in both End Markets and Regional Clusters.
Implementing S&OP is not a difficult task; it is a straight forward supply chain planning process that gives the company the benefits of working from one plan or as they say "one set of numbers". Here then is one of the biggest issues managers' face - they have to subordinate their individual plans to the company plan and deliver their plan in a common format and agreed time to fit in with the company S&OP planning timeframe.
"Simples" I hear you say, but no it isn't, as one manager involved with the supply chain said " I have been in my silo for a good while now and I like it here I achieve my KPIs and get my annual bonus and not really worried about other areas of the supply chain as long as they don't affect me. I'm doing well because I always put a bit more in my plan for a rainy day and avoid stock outs which are my customer service KPI".
As the Managing Director my view is that S&OP is a great innovation as its going to simplify and standardise the planning process into one company plan that we can all buy into and the planning process will be more accurate and timely. But well it should be for all the meetings that are involved with S&OP and the time they take. I found many of my managers complaining about this and I have told them as I always do, that it is up to them to prioritise their time I cannot tell them what meetings they should go to. When the consultants who managed the project briefed us on what was required I designated my Projects Manager to lead from our side and to update me on a regular basis. This has happened and things seem to be going well but I try not to get too involved with the nitty-gritty and just attend the final meeting each month when I am around.
As the Supply Chain Director S&OP should be the answer to all of my prayers. The benefits to the company available from the process are fantastic but I just wish all the other managers involved felt the same way about it and didn't just regard S&OP as my responsibility. In the beginning we all agreed a planning timetable that scheduled meetings each month for a rolling 18 month period and with the initial enthusiasm attendance was 100%. With the consultants on site for the "go live" and support period things went well and S&OP seemed to be quite easily manageable but after a while certain managers began to lose interest. I tried to get support from the MD who stated at the last senior management meeting that he is solidly behind S&OP but most times sends the Projects Manager to represent him.
As the IT Manager I have fought tooth and nail to get the company one of the latest ERP systems available. This system provides supply chain visibility from the suppliers warehouse to our factory and each step through to the distributors and wholesalers. With the implementation of S&OP I have designed a common set of reports and databases that ensures we are all dealing with the same data for use with S&OP. In the initial stages I asked for the managers input but this was so varied and contradictory I designed the reports myself. Now I find in most of the meetings managers are presenting reports in "home grown" spreadsheet formats rather than using the designed system ha! - so much for one set of numbers.
As the Factory Planner I welcomed S&OP as it would reduce the number of plan changes on a daily and weekly basis but this has not happened as the new forecasting and demand planning processes have been developed from a set of rules derived from an "algorithm" that works in theory but misses out the old hand of experience that I used to use. Therefore I feel that my teams combined 45 years of forecasting and planning experience is now wasted and the opportunity to combine the new ways of working with our experience has been lost.
This is the first in a series of artices on the topic of S&OP by the author. Further blogs will provide a more positive approach towards S&OP and explore what makes S&OP one of the most effective supply chain business processes. Please feel free to comment and share experiences.
