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Route to Market & Supply Chain Blog

FMCG S&OP implementation & compliance: MNC's & regional players

Posted by Dave Jordan on Tue, May 14, 2013

Increasingly, most multinational FMCG/Brewing/Pharmaceutical companies have implemented some form of Sales & Operational Planning (S&OP) or further integrated planning. They will have gone through the undoubted pain of getting people together to communicate for the good of the company and not just individual departments. Asking people to change the way they have been working, i.e. in silos, for years and having meaning and collaborative discussions is a very difficult task.

Other smaller and possibly regional players are yet to take the plunge despite the obvious benefits that continue to be generated in the larger operations. As mentioned above, the adoption of a robust S&OP does indeed take some effort particularly if the Sales and Marketing departments are lacking in structure and rigour which sadly, is usually the case. However, the longer there is a lack of planning rigour related to sales and marketing activities affecting product supply, undoubtedly the harder it is to make the S&OP mentality change.

S&OP Maturity Supply Chain Getting the meeting structure in place is hard enough as contributors have to have fixed dates in their diaries for months ahead. The sequence of inter-related meetings cannot stop or be significantly adjusted as the whole S&OP process is then out of kilter. Such discipline does not come easy but you have a chance if the top team and particularly the CEO/MD understands what S&OP is and is seen to be a very visible leader of the process. After all, the success of S&OP and ultimately the sales generated impacts heavily on her/his career prospects.

So, in such cases with smaller companies the equation is:

S&OP Education + CEO/MD understanding and buy-in = Success

Going back to the multinational situation, once S&OP is established is that the end of the matter? A resounding “no” is the answer in increasing numbers of companies. The pain of implementation has eased and the consultants or in-house project managers have cleared their desks. Project ROI has been calculated and the pay-back has been very swift indeed. Market performance is growing and the team seems a lot happier with their lot. What can go wrong?

Firstly, competition will always increase and improve so the efficiency and maturity of your S&OP must be constantly challenged or your once-formula 1 process could actually be well back on the grand prix starting grid. In order to avoid salami-like slippage the buzz word for the larger companies is compliance. Employees can get bored with the necessarily endless and repeated meetings and slackness and short cuts can creep in. If you have an ERP even the dreaded Excel spreadsheet may have made a comeback!

Assessing your S&OP performance and compliance internally is difficult and seldom provides you with a crystal clear picture. Get this done by an external company with deep knowledge of S&OP and more importantly, awareness of how other companies are succeeding with new and improved S&OP tools and techniques.

Image courtesy of Stuart Miles at Freedigitalphotos.net

Tags: Dave Jordan, CEO, Performance Improvement, S&OP, Forecasting & Demand Planning, Compliance

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