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Route to Market & Supply Chain Blog

Top 10 Tips to Effective Consensus in S&OP

Posted by Dave Jordan on Wed, Aug 18, 2021

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In successful FMCG companies, Sales & Operational Planning (S&OP) is the flexible glue that holds your processes together, ensuring demand and supply are balanced along the chain and most importantly, sees everyone operate to the same set of unambiguous sales, volume and financial numbers.

After the discussions, decisions and trade-offs in the Demand, Supply and Finance meetings, the plans must be endorsed by the senior team. Without the buy-in of the senior team and specifically the leader, the plan is open to negotiation and interpretation. Not good.

fmcg-sop-consensus-in-post

Top 10 Tips – S&OP Consensus

  1. S&OP Policy. Is there a concise, written policy for S&OP that covers the process, purpose, activities, participants and expected results? Is ownership of the policy abundantly clear and are routine reviews carried out?
  2. S&OP Process & Procedures. Is your S&OP truly a living process and not just a begrudgingly attended set of monthly meetings? Is there a series of documented steps supported by appropriate information and procedural tools? Are meeting agendas circulated in advance and minutes recorded/agreed at the meetings?
  3. S&OP Calendar. Is there a calendar of meetings and key data events fixed well in advance and preferably up to 12 months ahead? Are attendees agreed for all S&OP meetings and deputies nominated, as required. Do all meetings take place either in person or virtually and no meetings are missed?
  4. Information. Does the presentation of information include a review of past performance and future plans including sales, NPD, production, inventories, constraints, backlogs, shipments plus a KPI review? For each product family, are plans reviewed in units of measure that are sensible, relevant and which communicate most effectively.
  5. Time Horizons. Have time fences been established to manage changes? In the short term, is there a conscious effort to minimise change to gain the benefits of plan stability? In the medium term, are priority changes expected and reviewed to ensure effective execution? In the longer term, less precision is expected but is direction driven by strategy firmly established?
  6. Regional Management & Supply Chain Partners. Does the S&OP process include involvement of Suppliers, Distributors and Regional Management (local & export markets) as appropriate? Is this involvement welcomed as a genuine desire for mutual benefit?
  7. Pre-S&OP. Is a consensus process or meeting undertaken by the operational management team to reconcile the unconstrained demand plan with an agreed set of operational supply plans? Is the appropriate level of detail discussed - detailed enough to identify constraints within the appropriate time horizon and not too detailed to paralyse decision making? Where significant challenges or constraints remain, are recommendations tabled for consideration at the S&OP meeting? Are the full (i.e. for every discipline) consequences of these recommendations understood and acknowledged? Is real agreement within the operational management team achieved? If not, do you start again until it is? (NB. Depending on the size of the business, Pre-SOP could be a standalone process and meeting.)
  8. S&OP Meeting. Is this critical company meeting chaired by the GM, CEO or the most senior leader? Is there a routine and regular (usually monthly, sometimes weekly) S&OP meeting? Do all participants come fully prepared having undertaken the Demand Review, Supply Review, Financial Evaluation and Pre-S&OP? Are recommendations prepared in advance for any identified constraints and approval sought for action? Is all information readily available to discuss any issues? With adequate preparation, does the meeting routinely achieve consensus within 2 hours?
  9. Achieving Consensus & Actions. Is there a mechanism to ensure and provide confidence that aggregate plans reconcile with detailed plans? Is there unequivocal consensus between Marketing, Sales, Supply Chain and all supporting operational departments and these plans are 'signed off’? Are all conflicts resolved, and decisions made and recorded? Are the results of S&OP communicated appropriately throughout the organisation and are all agreed actions implemented on time?
  10. Continuous Improvement. Do you rest on your laurels when business is doing well? Is S&OP routinely critiqued, tweaked and adjusted through identification of improvement opportunities? Does this rigour include a regular debrief at the end of each S&OP meeting/period?

At this stage you should appreciate that all of the S&OP activities, processes and meetings are necessary to smoothly run your business. There is no superfluous work required as the well-designed S&OP process is about working smarter, not doing extra work.

Read more articles on Supply Chain Excellence and Route To Market on our website where you can also subscribe to our frequent updates.

Finally, feel free to use any of our contact routes including Live Chat, if you have any questions about how the Enchange Supply Chain House can assist your journey to supply chain excellence.

Tags: FMCG, S&OP, Forecasting & Demand Planning, Supply Chain House, supply chain excellence

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