For many businesses, getting sales and operations planning (S&OP) right is a critical step toward success. S&OP processes are responsible for cutting down waste and optimizing your organization’s resources. But for too often, S&OP falls short of expectations. Why does this happen – and what can you do to fix it?
Every organization will answer those questions differently. But it’s very important that every organization asks itself the hard questions it needs to ask in order to find and solve whatever issues may be occurring in its S&OP processes.
The following is a series of seven questions that can help business stakeholders uncover the root causes of the issues in an S&OP strategy and determine ways to fix them. By answering these questions carefully and in order, an organization can craft a new S&OP strategy that will prime it for business success.
Question 1: Where does your S&OP process rank in maturity?
All successful transformations begin with an assessment on the maturity of your current processes. To assess your S&OP processes, it’s critical to take a look at the people you have involved, the technologies employed, and, of course, the actions taken in the process itself. Several industry standards exist to help you measure S&OP process maturity.
Question 2: What are your key business differentiators?
Now it’s time to take a close look at what makes your business – and by extension, your S&OP strategy – unique. Taking your business differentiators into account is vital when developing an S&OP model that fits the needs of your company. And meeting your company’s specific needs is critical. A one-size-fits-all S&OP model will always fail to deliver the results your business needs.
Question 3: How does the S&OP process reinforce business differentiators?
Once you’ve defined your key business differentiators, you can compare them to your current S&OP process. Chances are that you’ll be able to pinpoint several areas where the goals of the business aren’t aligned with the goals of your S&OP strategy.
Question 4: What aspects of the S&OP process need to mature?
After the discrepancies between your business goals and S&OP processes are identified, you’ll be able to single out several areas of the S&OP process that will need to mature. With these areas singled out, you can now begin discussing how to fix them. The specific actions to take as part of your S&OP transformation will be easier to define once you reach this stage.
Question 5: Who will lead the S&OP transformation?
When transforming any part of the business, simply selecting a strategy or a new technology isn’t enough. The best strategies can break down is there isn’t a clear division of labor among the people working on the transformation. Take a moment to determine who will be responsible and accountable for fixing the S&OP processes.
Question 6: When will the S&OP changes become a reality?
A timeline and a roadmap are also critical aspects of any business change. This is the stage for creating a detailed plan of action for completing your S&OP transformation. Establishing metrics for success and determining when these metrics will be measured is also an important part of this stage. Without predefined KPIs –based on your business differentiators – it will be impossible to tell if your transformation is truly working.
Question 7: How will you translate these S&OP decisions into business actions?
Now, with goals and a plan to meet those goals in place, you can begin looking into the specific tools and technologies that can help you follow your transformation plan and meet your goals. An integrated business planning solution, such as SAP Integrated Business Planning, is usually an ideal way to facilitate improvements being made to an S&OP process.
By answering these questions one by one, an organization can develop a winning strategy for a successful S&OP process, enabling you to optimize your supply chain, cut down waste, and better anticipate customer demand.
To learn more about improving your S&OP processes, view the recorded session “What Went Wrong? 7 Steps to Breathe New Life into a Stalling S&OP Process,” from SAPinsider's Logistics & SCM 2016 event.