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Route to Market & Supply Chain Blog

Senior Management Commitment Works for Successful S&OP

Posted by Keith Marshall on Mon, Sep 20, 2010

Research and experience has shown that where companies view Sales & Operational Planning (S&OP) as a supply chain process and planning system it invariably fails to deliver the expected results and benefits. Conversely where S&OP is seen as the company planning system that all other company plans are subservient to it really does work and "does what it says on the tin" and delivers the benefits we always expected.

It is always stated in research papers, training and consultancy proposals that top management support is essential for successful S&OP. But we need to go further than that. The top management must really believe in S&OP and continually demonstrate their support by being totally involved throughout the process - not just for the first few months but continuously and were others may question the process the top management must be the champion and meet head on any issues that threaten the operation and validity of S&OP. Just lately I've heard the words "fanatical" and "obsessed" for managers describing their senior management's commitment to S&OP in companies where S&OP really works.


S&OP meeting

In the design of Senior Management KPIs S&OP performance should be a high rating objective not just to maintain the S&OP process but to further develop the accuracy and discipline of the process. These KPIs should then be cascaded through to each level of the organisation. The company strategy developed by senior management to meet the shareholders need must also reflect the paramount importance that the company pays to S&OP at the highest level.

Look at your MD's KPIs is S&OP there?
Look at your company's strategy statement - does it include reference to S&OP?

One area of danger to S&OP is the current trend of senior management career movement which seems now to be as little as 3 years in post especially with multi-national FMCGs. The good work of the previous senior management team cannot be left to the usual handover methods. S&OP should be part of a systematic and phased handover period between the incoming and outgoing managers. As well as the physical and process handover the belief and involvement must be through seamless continuity.

Senior management also have the responsibility to continually revitalise S&OP and update the way it works and the results it produces. This can be done by internal reviews, external benchmarking and use of consultants who have experience with many different companies across different industry sectors.

This is the second in a series of "Blogs" on the topic of S&OP by the author. Please feel free to comment and share experiences. Further "Blogs" will continue to provide more methods & approaches towards S&OP and explore what makes S&OP one of the most effective business processes.

Tags: FMCG, KPI, S&OP, Forecasting & Demand Planning, Keith Marshall

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