I know I am prone to rattle on about Sales & Operational Planning (S&OP) but seeing the benefits being delivered to previously struggling business is extremely motivating for a confirmed “techy” like myself. If only we could advertise such successes we would be able to find and help other business in need of an S&OP boot camp or some S&OP tender loving care. Here I attempt to highlight how one such business went from a boat up a creek without a paddle to a cruising, ocean going luxury liner.

The Challenge

Our regional FMCG client did not have any formal planning process and so started from a lowly position on the Enchange Assessment scale which allows benchmarking with the same and other sectors.

• Demand and Supply Planning forums existed but they were not followed by a formal Finance Review nor any Pre-SOP and leadership S&OP meetings.

• There was a weekly demand planning meeting that resembled an S&OP meeting.  However, this was a “fire-fighting” opportunity to adjust the current month forecast.

• The forecast horizon was far too short particularly when considering significant peaks, e.g. Christmas and Easter.

• Departmental interaction consisted solely of unproductive “silo behaviour” and “blame-storming”.

• Supply and demand were not optimised within the business and, for example, lost sales occurred while inventory was managed on a reactive basis resulting in over and under-stocking. As a result, the business had failed to reach budgeted sales targets for a number of months.

The Approach

Enchange designed a low cost 3 month project with largely full time support to implement S&OP in the business. As the project progressed the Enchange support gradually changed from “Enchange runs” through “Enchange facilitates” to “Enchange hands-off”. This enabled the client team to maintain process integrity and leadership at the closure of the project.

All processes and procedures were designed and documented together with new job descriptions. A company-wide set of “recovery KPIs” were created and published in a dashboard format with clearly allocated roles and responsibilities for each.

The Result

The business has been turned around as a result of this project. Budgeted monthly sales targets have been achieved for 6 consecutive months. Amongst many other enhancements the following KPIs have been implemented and are measured monthly:

The Future

Clearly, this company is not yet the finished article but the improvements made in such a short time are staggering. KPIs will require adjustment as the company provides more and more fuel to the sales effort to ensure the performance bar continues to be raised and process complacency is avoided.

If you are reading this and this is not your company and you operate in an FMCG D&E market, one of your competitors just made a step change in market performance! Be afraid, be very afraid.

Image courtesy of renjith krishnan at freedigitalphotos.net