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Route to Market & Supply Chain Blog

Leading Edge S&OP: Periodically check for relevance & compliance

Posted by Dave Jordan on Wed, Feb 26, 2014

As a sign of how long we have spent living in Romania we have adopted the Domestos si harnici si darnici or spring cleaning routine. The first target of this spring was the kitchen. All cupboards and drawers were emptied including some for the first time in several years. Lo and behold we had forgotten we were the “proud” owners of an item recently voted the world’s worst labour saving device. Yes, we own a battery operated revolving ice cream cone. Add this to the ice cream scoop that announces “ice cream here” in a very American accent and you can perhaps appreciate the challenge ahead.

Everything came out this year including the built-in cooker and the fridge-freezer. Even when empty the fridge-freezer was difficult to move out of the kitchen but after much pushing and pulling it was reconnected to power in the temporary home in the living room. That is when we noticed that the tiles where the fridge-freezer had been were different to those in the rest of the kitchen. That was rather strange. Why would the builder put different tiles in only 1 very small area? Did he/she run out of tiles and put in what was available or was it simply a mistake spotted in time before the whole kitchen was tiled?

S&OP compliance kitchen resized 600Neither. Closer inspection revealed that the mystery tiles were in fact exactly the same design but significantly brighter! (I hope senor management does not follow this blog!) The tiles that had been hiding under the fridge-freezer for so long were bright and with a shine while those elsewhere looked rather tired. I am not suggesting the darker tiles were dirty but they had simply been exposed to so much traffic over the years that their sheen had faded and any gloss finish that was there originally had vanished.

Can you see where I am going yet? That Sales & Operational Planning (S&OP) process you implemented in 2005 may not be in the same condition as it was when Enchange left the building. Furthermore, that original design may not be wholly fit for purpose!

To ensure your S&OP still fits the bill take a look at our top 5 questions on ensuring continued relevance and compliance:

1.      1. Do the meetings still take place and are they minuted and with clearly defined actions?

2.      2. Are the correct people at the appropriate seniority level involved in the preparatory meetings and the Board S&OP meetings?

3.      3. Are the KPI’s still relevant for the stage and state of the current business? Perhaps stock levels are not now the key issue but it may now be customer service.

4.      4. Are the KPI targets stretching enough? Is your business actually cruising while measuring yourself against soft targets?

5.      5. Is S&OP the ONLY process used across the company for defining sales and operations capabilities on a monthly basis? Have underground spreadsheets emerged to undermine the ERP?

Have you tried to play a 7 inch vinyl record on a CD player? Do you still wear that day glow pink teeny-weeny bikini you bought at college? (I am thinking of the ladies here but you never know!) Is your mobile phone still the size of a house brick?

With the exception of any cross-dressers out there the answer will be “no”. Everything and everyone changes with time and so do supply chains and S&OP processes. From time to time you need to stand back and check if the tools you are using are still the best for the job. You would expect me to say this but that relevance and compliance check is best done by an external body which by the nature of their own business is up to date with S&OP/IBP development and innovations.

Take a look underneath the veneer of your S&OP process and assess if non-compliance is the cause of your stale sales.

Image courtesy of artur84 at freedigitalphoto.net

Tags: FMCG, Dave Jordan, CEO, ERP/SAP, Supply Chain, S&OP

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