When I talk to Consumer Products companies or other industries about their challenges around S&OP, the maturity stage of S&OP is always a starting point for discussions. While it seems to be still important for companies to understand their maturity stage, it does not really provide guidance that helps how to reach the next step.
I am a trainer for kids in athletics. If I tell Simon he jumped 3.06 meters it doesn't really help him. I need to identify which jumping type he is - powerful but too slow or fast but a bad drop. So when I apply this same mentality to the business world, many similarities emerge. Like athletics, there are different types with good and bad behaviors and every situation needs its own feedback.
Which of the following do you belong to?
The 'sleeping' company that has a quarterly S&OP process in place but has not started to work on the next possible stage.
The typical 'struggling' company who started with S&OP few years ago and is still struggling with the implementation and organizational alignment.
The 'exploring' company who is aggressively working on their S&OP process to run at highest possible stage and most detailed level.
Let’s take a deeper dive into the specifics of each of the types and see what can be improved.
Your main pain point is the unconsolidated excel nightmare and the time you spend to get all plans and reports available. It takes weeks to see impacts on the agreed changes. No wonder this can't be reduced to a monthly process - colleagues would only work to get monthly S&OP reports with no time left for other tasks.
It is time to wake up! If you don't, your competitors outpace you. Find a way to get executive sponsorship. Bring your S&OP to the next level and reduce planning cycles. Bring plans (demand, sales, supply, financial) into an automated and regular process under one unified data model. This model should support financial, sales, marketing, supply chain, operations and executives. Allow real time simulations, scenario building and analysis on each level of granularity during your meetings. E.g. during the meeting the sales on product family and region level is change. See in real-time the impact on capacity and resource load and at the same time the change on margin and service level.
You are still investigating to make the process faster and smoother but the result has not been convincing. A lot of money was invested into different aspects of S&OP. The result is a good supply chain foundation and improved forecast accuracy. It could be better. Communication and process tracking isn't easy in your company. Sales still does not update their figures regularly. Finding consensus takes a long time: you plan on an aggregated level using excels but to see the impact on a detailed level at the same time is not possible. Or the other way around. You look into your tactical supply plan but to do simulations and to see the financial impacts is almost not possible. It requires performing several steps to see whether the consensus is acceptable or not.
Collaboration and process tracking needs to be improved soon! Provide sales with good individual analytics and collaboration options (without giving the feeling they are controlled - it is better to work with tasks, feeds and alerts).You need to use one unified data model that allows you to find a good consensus during a meeting based on the data from sales, marketing, supply chain. Make this process even more relevant to your company to show it feeds back what you invested: include market research data, customer plans, promotions, POS data and look at your capacity and material situations in real time. This gives you the possibility to shape demand. And last but not least win the sympathy of the executives with a chick real-time demonstration of the companies’ possibilities. Provide them the opportunities the company has and what needs to be invested to make it happen rather than focusing only on explaining the issues on a detailed level.
Either you are S&OP expert or you have not heard about S&OP at all - but both of you found ways to improve the business results. Two major topics are of high importance for your company:
1. Bringing strategic plans down to operations to see impacts on strategic investments
2. Knowing at any time where the company is heading and being prepared for any scenario.
The issue is that you cause immense costs to get this supported. What you missed is to believe in abstractions while not losing the details. As your process is sticking in the details you lose the benefits you could have with S&OP. And your huge investment to get the detailed explorations supported does not pay back.
Stop being nervous, plan on an aggregated level. Look at the impacts by working with real-time disaggregation and aggregation. Make sure the basis for your planning is the best you can have – the better the individual plans the better the results. Focus on improving your supply chain planning, your demand planning and use it as data basis for S&OP. Don’t get into a debate with financials. Convince them that it is sufficient to calculate financial key figures for the purpose of getting a window into the future and that it is not to use in the annual financial statement.
No matter which type you are, there is room for improvement and technology support to make your life easier and your company more successful. Here’s how:
Have a deeper look intoSAP Sales and Operations Planning powered by SAP HANA (cloud solution)
Let me give you an example:
You are sitting in the Pre-S&OP meeting and the financial manager wants to simulate a 10% increase in sales revenue for one region / all product families /next year and a 20% increase the year after. Financial wants to understand if the company can make it - or if new investments need to be done.
During the same meeting - and on the fly – you create different scenarios. In real time the different stakeholders from various departments can see the impacts: a comparison of the scenarios and for each KPI’s like margin, revenue, profit, service level, projected inventory costs, capacity utilization on resource level to mention a few.
And the other way around: any change on the supply plan will show real-time financial impacts.
Detected bottlenecks can be directly discussed during the meeting. The investment into new resources can be prepared on the fly and used as proposal for the executive meeting.
How does it look like?
Track the process and make sure S&OP is running! Look at the information that you need to make your part a success! Create your visualization / analytics based on the full data set on the fly for your meetings. From here you are connected to the planning views.
The planning itself uses an easy excel user interface – the users don’t need to switch to an unused frontend – just open and start!
Collaboration is key behavior! Use your mobile device to make decisions, to collaborate, to share news, to make sure tasks were completed and much more.