Supply Chain Blog

Sales & Operational Planning (S&OP) in FMCG, Brewing, Pharma

Posted by Dave Jordan on Tue, May 31, 2011

Did anyone hear the loud clanging noise on Tuesday around 14.30? The sound was similar to a very large church bell being struck by a huge iron bar and that bar was in the hands of Arnold Schwarzenegger. Arnie was also in a very bad mood! The noise bounced around and around the room hardly losing any intensity. That resonating “boing” was followed by a much less impressive although definite clunk as my jaw dropped.

S&OP MeetingHaving spent a week walking through a certain company S&OP process I rolled up at the CEO’s office to provide a tactical heads-up before presenting our findings to the wider management team. If you get the CEO on board with any criticisms or challenges you are about to expose, the closure meeting runs a little easier. We discussed what I had observed which was typical for most companies who think they run a robust S&OP, e.g.

  1. Working with more than 1 set of agreed numbers.
  2. Lack of KPIs focussed on improving service, e.g. forecast accuracy by sku.
  3. Patchy meeting attendance.
  4. “It’s a Supply Chain problem.”
  5. Blame–storming.

I could go on and on, unfortunately. The basic elements of an S&OP process were present but there was a lack of cohesion in the process and buy-in from key people. Essentially, everybody was going through the motions, ticking the right boxes but not improving. This company even had an internal corporate audit on S&OP and came out with flying colours. How? Well, it is a bit like when a big global boss visits an FMCG or Pharmaceutical operating company head office - you can always smell fresh paint!

So, back to my meeting with the CEO of the FMCG company in question. There was plenty of nodding and frankly not too much surprise and certainly no push back or denial. Then the bombshell came, “It is a complicated process so I leave all that S&OP stuff to a bright young thing in Supply Chain".

Slowly and calmly Arnie stood, took off his jacket and picked up his iron bar. After a brief flex of his considerable muscles he stood back from the church bell………


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Tagss: FMCG, Dave Jordan, Pharma, KPI, S&OP, Forecasting & Demand Planning