Sales & Operations Planning (S&OP)

How well your operations and commercial team work together is a key factor to drive your company’s performance. Just by observing how your head of Commercial and head of Operations collaborate (or not) during the monthly S&OP meeting, is a great predictor of your company’s future performance. For most companies the question is not how to implement S&OP from scratch, but how to keep the momentum or even how to raise back the level of performance, as it’s not uncommon to see the S&OP process performance to have degraded over time.

Common reasons for this are:

• Lack of clear supply chain strategy. Driving supply chain excellence is a balancing act. Teams need to balance cost, customer service, asset utilization and inventory, which is difficult if there is no clear definition supply chain strategy to make those trade-offs.
• Different levels of maturity across countries and regions. In many global companies it is difficult to harmonize across their various countries and bring each country to the same level of performance.
• Dependency on Excel. Due to the shortfalls in Advanced Planning Systems, many companies still use Excel as the primary tool for planning. However, using Excel for planning is not good enough for modeling and planning todays’ complex supply chains
• Employee turnover. Key champions of the past have left the company and slowly the knowledge base has eroded

With managing and balancing demand and supply in the current volatile environment becoming even more important, it is therefore vital to bring your S&OP process to a higher level.

Based on our experience with S&OP, a successful S&OP process is driven 40% by Culture & Values, 30% by Process Definition and 30% by Technology. Technology is important but should not be overrated compared to Culture & Values and Process Definition. The visual below highlights the BCI vision.

Key ingredients for a successful S&OP process are:

• Senior executive sponsorship and active participation
• Cooperation amongst Marketing, Sales, Finance, Production, Supply Chain and R&D
• Cross-functional set of metrics aligned to the strategy
• Understanding impacts and challenges elsewhere in the company
• Consistent dataset and master data
• High performing planning tools
• Process discipline and clarity of roles
• Bring the right info to the right people at the right time in the right place

BCI can support you in defining and implementing an effective target operating model for your S&OP process. This is based on our S&OP Framework that serves as a reference for to do a gap analysis of your current process, forms the blueprint to define your future best-in-class process, and guides the implementation and transition from the current to the future improved process.

The main elements of the framework are:

• Assessment of the main building blocks of the S&OP process
• Engineer the Enablers such as Sales, Finance, Supply Chain, Manufacturing and Sourcing
• Design the Organization incl. responsibilities, alignment and behavioral incentives
• Training and performance evaluation through a set of metrics

The visual below provides and overview of the BCI framework on S&OP.