Exploring the Enigma Surrounding the S&OP Specters: An Investigation by The Supply Chain DetectiveTM
In a significant move, the new CEO of the global company, which operates two dozen facilities worldwide and serves dozens of customers across various industries, has hired an S&OP (Sales and Operations Planning) expert to implement a new S&OP process.
The company, which previously had no formal S&OP or SIOP (Sales Inventory Operations Planning) process, is now focusing on teamwork, using one version of the truth, and resolving issues in monthly S&OP meetings. This emphasis aims to drive a level of common understanding and synchronization unprecedented in the company's history.
The S&OP expert has defined a business process and calendar, and the edict was communicated that the entire S&OP process would be operational within one month. However, despite promises to the contrary, the S&OP process was still not up and running.
One of the challenges faced was resistance from certain employees, particularly from the Sales team, who had historically managed all forecasts from their individual customers independently. Some Sales team members were passively blocking the new S&OP process due to perceived loss of control and accountability.
To address these issues, education was reinforced, concerns were discussed, accountabilities were outlined, and HR concerns were addressed. Some Operations teams were not familiar with the S&OP process and required education and hand-holding.
The resistance to the implementation of the S&OP process within the company was rooted in structural resistance and the human limits of the employees involved. The key persons responsible for the resistance were not explicitly named but likely included those affected by these structural and human challenges during the transformation.
Despite these challenges, the new S&OP process is starting to bear fruit. Customers are seeing an increase in the company's ability to execute and be flexible. Shareholders are seeing more precision in forecast accuracy and financial projections. Furthermore, employees are seeing a greater level of productivity improvement.
The new S&OP process also addresses the ecosystem of suppliers, facilities, customers, carriers, and end customers, requiring a centralized, coordinated S&OP process. The S&OP expert, while treading lightly due to office politics, is less experienced in driving cultural changes. However, the potential benefits of the new process are clear, and the company is committed to seeing it through.
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