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Route to Market & Supply Chain Blog

Sales & Operational Planning (S&OP) : the CEO needs to get a grip

Posted by Dave Jordan on Tue, Nov 13, 2012

Make your S&OP process work for youPeople ask me what is it like working in Supply Chain and my usual reply is “wetting yourself in a dark suit. You get a warm feeling but nobody notices”. If everything is progressing well then at best you are ignored but when something goes wrong in supply you can bet someone is screaming in your face.

Yet, in my FMCG, Brewing, Pharmaceutical experience the fault commonly lies within the very departments exercising their vocal chords, i.e. Sales and Marketing. I have blogged on that previously so I will not dwell on the same theme here but needless to say making a lasting change to their blinkered approach is difficult.

Borrowing the opening words of the Beach Boys classic; “wouldn’t it be nice” if everyone focused their energy – positive or negative – into making collective progress? Instead of being dragged into an S&OP meeting people need to see this forum as one where tough debates can take place but joint decisions are made. Taking a team view of a supply problem to the Board is a powerful way of focusing the top team onto alternative opportunities.

The junior team has debated the problem to death and the top team needs to trust that this has happened with rigour and then move the company forward. Why is there so much backward looking going on? Whatever happened has happened so get over that fact and make the future less uncertain.

If CEOs and their Board colleagues continue to behave and operate as if they are 1 grade lower in the hierarchy then these companies are going nowhere. Implement S&OP properly in the first instance.

 I find many companies who proudly boast that they run a fluid S&OP when the reality is somewhat different. Take a look at you own situation; a really honest look:

  1. Do S&OP meetings happen at the right times?
  2. Are all relevant team members present every time?
  3. Are meeting minutes issued and actions completed in good time?
  4. Is the S&OP presentation to the Board fragmented or collective feedback, i.e. does anyone break ranks when at the Board S&OP meetings?
  5. Are KPIs displayed widely and do they reflect inter-dependent performance of all departments?

S&OP will not remove any structural or economy based barriers but following the discipline will ensure that what you can do is being done to the best of the collective ability of your employees.

The core of S&OP is that that the sum of the individual contributions is far, far greater than individual politics full of back-stabbing and backside protection.

Tags: Brewing & Beverages, FMCG, Dave Jordan, CEO, Performance Improvement, Pharma, S&OP, Forecasting & Demand Planning

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