Sales and Operations Planning has become a standard process to improve business performance, collaboration and predictability. In fact, it’s become internalized to a degree that companies often have several (competing) S&OP processes in different geographies & business units. Why is it that despite its popularity, only 42% of companies rate their S&OP process as effective?
Common causes for this include poor change and process management, misalignment in terms of business strategy, mismatched metrics across the business, dysfunctional technology and lack of expertise to operate and implement technology. Moreover, without powerful analytics that provide exciting insights – the S&OP process can be too tactical, too data input hungry and a lowlight on stakeholders’ monthly calendars.
How can you turn S&OP from a lowlight into a highlight?
We recently offered a workshop at LogiChem, a chemical industry conference. Our workshop simulated a Capacity Review session. During the workshop, we learned that virtually all attendees had a pain point in common: they always had to go back to their desk to test different scenarios after an S&OP meeting. None was able to perform scenario comparisons in real-time to discuss insights with stakeholders during the meeting. Some also lacked advanced analytics and optimization capabilities.
We asked – What if instead of having to go back to your desk to test different scenarios, you could do it during the Capacity Review session? What if you could get an overview of all your low and high margin products and find opportunities for improvement on the fly? Suddenly, S&OP meetings would not be as tedious. Their flow wouldn’t be interrupted. You could make collaborative forecasts and run scenarios to quickly reach consensus.
That was a big eye-opener for us. Bearing this in mind, we put together some criteria for supply chain teams that are in the process of selecting new software.
What capabilities should you look for to achieve this?
Your S&OP solution should:
- Allow for easy and real-time scenario management. With this capability, you can run and compare multiple scenarios side-by-side in the executive meeting at the end of S&OP and make conversations richer, more entertaining and fluid. Moreover, your meetings will be more strategic, rather than focused on granular, operational things.
- Enable you to run business cases at the click of a switch. You may want to make changes in different scenarios and immediately capture their impact on revenue, margin, and CAPEX. This will also contribute to make your meetings more productive and insightful.
- Be cloud-based. This is a common strategic and IT requirement nowadays, as it reduces infrastructure costs dramatically and facilitates deployment.
- Be transparent. Having insight into the logic of the application is extremely useful to gain trust and increase adoption. Black box applications are harder to adapt to unique business requirements.
- Be accessible. Work is increasingly happening on mobile devices. Look for a solution that can also be used on mobile.
- Reduce your dependence on technical or external resources. To react quickly to today’s business environment, you need to have a self-enabled team and build up your skills in-house.