Upon implementation, S&OP processes are designed to make tactical decisions concerning long-term business goals. Unfortunately, there is often a stark difference between design and practice.
For many S&OP teams, the majority of their time and energy is focused on immediate needs and disaster mitigation. As a result, the S&OP process breaks down, leaving investment and confidence from senior leadership by the wayside.
In order to steer S&OP processes back on course, organizations are now exploring opportunities to implement a Sales and Operation Execution (S&OE) process that focuses on the “here and now” so that S&OP team members can return to long-term decision planning. On the surface, it seems somewhat counter-intuitive to add a process to a process. However, S&OE alleviates immediate decision making and firefighting from the S&OP team. Furthermore, with the planning horizon for S&OE process being much shorter, the S&OE team members are equipped to identify deviations that can be addressed immediately.
S&OE alleviates immediate decision making and firefighting from the S&OP team.
Implementing S&OE processes begins with an assessment of the organization’s current end-to-end planning strategy. This should include tactical planning methodology all the way down to operational planning and execution.The most effective way to accomplish this task is to conduct stakeholder interviews, review historical planning performance, and evaluate existing data analytics. This should give you visibility into the entire planning process.
After conducting the assessment, you should be able to identify fundamental changes you can make to the organization’s current S&OP. This will allow you to create a fundamental definition for your unique S&OE process, which in turn will complete the optimal design for your end-to-end planning process. Designing the entirety of your planning processes will allow you to achieve detailed process design, including the underlying subprocesses such as S&OP demand review, S&OP supply review, and more.
Once your S&OE process has been defined, you can now deploy a pilot program to see what incremental adjustments may be needed. While a typical pilot program usually occurs within 1-2 S&OP cycles, the number of pilot runs will vary depending upon the level of complexity and magnitude of change occurring. Once you are satisfied with the pilot program results, you can deploy the new S&OE process globally across the organization, allowing your S&OP to resume the tactical decision making for which it is designed.
If your organization is seeking methods to improve your S&OP process and implement S&OE design support and is unsure of where to begin, seek the expertise of experienced supply chain professionals who have helped global organizations optimize their planning strategies. Don’t let your S&OP process lose long-term focus and explore S&OE process design to support your business needs.
Pekka Häkkinen is a Europe-based Principal in the Integrated Demand & Supply Planning practice at Chainalytics where he helps clients develop and implement strategies to optimize their supply chain planning processes.
