How do you execute effective S&OP? Just move through the phases and make all the right decisions. Simple, right? Not so much. There’s more to this puzzle, and the pieces often don’t fit together on the first try. But that’s no reason to give up—with the right strategies in place, you can lead the way to innovative S&OP. To thrive in today’s market, innovation is a must.
First, let’s define the term. S&OP is a monthly integrated business management process that empowers leadership to focus on key supply chain management drivers, including sales, marketing, demand management, inventory management, and new product introduction. S&OP helps your executives make the right decisions quickly and consistently.
So what’s the problem with the old way of S&OP? Why is this next generation essential? Here’s the bottom line. The old way of S&OP is slow, spreadsheet-driven, disconnected, and can’t adjust quickly enough to keep up with today’s fast-shifting market. When a brand’s popularity can skyrocket because of a celebrity’s tweet and an entire supply chain must be reorganized overnight because of a natural disaster, you have to be ready to respond at a moment’s notice. Strong connections and speed lead to confidence.
Traditionally, S&OP is divided up into these phases: product, demand, supply, and finance reviews, and then pre-S&OP and executive S&OP. Not everyone agrees on the exact order in which they should be performed, but every phase is necessary for the entire process to thrive. If you’re interested in digging into each phase in more detail, start here. Although it’s important to get the details of each phase just right, there’s more to it than just moving step to step. Let’s explore four keys to unlocking next-generation S&OP.
Don’t put garbage in (or you’ll get garbage out)
You’ll have a hard time making wise decisions based on corrupt or outdated data. It’s nearly impossible to make accurate, well-informed decisions without real-time, accurate data at your fingertips. S&OP decisions have an affect across many parts of the business, so you don’t want to make them based on a cornerstone of sketchy data. Try this three-step approach to data due diligence first:
- Find out what data is available
- Discover where it lives
- Determine who owns it
Once you’ve worked through these steps, focus on getting that data into presentable dashboards and let it lead to you to discover what data may be missing. With clean data going in, you can have confidence in your decisions knowing the cornerstone is trustworthy.
Be wise with your metrics
Find a champion
The supply chain leader of the future isn’t a lone ranger. It’s someone who understands the importance of cross-functional collaboration and that collaboration is essential to next-generation S&OP. To keep your S&OP process moving smoothly, find an internal champion who can play “stakeholder herder” with patience and a base of knowledge that inspires credibility as they work with all the departments involved.