Since my first steps in the industry in the late 90s, I have been working on S&OP projects from both a process and IT perspective. The relevance of S&OP has not decreased but has even increased.
"The State of Automotive Manufacturing 2021" report by Deloitte notes that, on average, automotive companies generate 70% of their value in the supply network, with only 30% of value generated in-house. The report also discusses the need for greater collaboration and integration across the supply chain to improve performance and mitigate risk. But, how shall we manage these networks if S&OP inside our own walls is still not established?
Another report, called "The Growing Importance of Supply Chain Resilience," published by the World Economic Forum in 2020, states that disruptions in supply chains have increased in recent years, with 80% of companies experiencing at least one disruption in the past three years. The report also highlights the need for companies to build resilient supply chains that can withstand future disruptions. But how can we manage long-term demand and supply to become resilient if we don't even do our own housekeeping with S&OP?
Implementing and sustaining an effective sales and operations planning (S&OP) processrequires clear and concise rules that everyone understands, knows, and follows. Here are six essential learnings of successful S&OP implementations:
- Involvement of top managers in S&OP executive meetings, their communication about S&OP outside of the meetings, their engagement in decision-making and whether the CEO understands S&OP and its connection to strategic business planning are key!
- All participants must take meeting attendance seriously, must participate actively and each of the required functional groups must be represented.
- Promote a team environment and encourage healthy debate. Appreciate and use differences to make meetings more successful.
- Supply should be aligned with the forecast unless a change is decided in the partnership or executive meetings.
- Conduct a kaizen event on the S&OP process at least twice a year to leave stakeholders with a feeling of ownership.
- Use an action item list to keep people accountable and ensure what gets measured gets done.
Stick to these rules, and your S&OP process will be much more effective and easier to accomplish. That’s it, correct? Hmmm…. Ok, butwhat about talent? A recent study conducted by Korn Ferry 57% of those surveyed indicated that they encounter difficulties in finding talent with end-to-end supply chain knowledge.
I am currently teaching supply chain sustainability at Munich University of Applied Sciences to a mixed group of students, including those studying operations management and agile project management. It is an interesting mix, but highly efficient! As always, we will incorporate serious game-playing into our curriculum! Throughout the semester, I plan to further my understanding of these diverse capabilities and their practical applications in a team setting. Working with Generation Z is interesting and challenging, but I love it! (Author: Andrea Walbert, Managing Partner)
