Understanding can take a long time.
A recent survey of about 400 companies in America, conducted through Supply Chain Digest, indicates that Sales & Operations Planning (S&OP) remains ‘a fairly immature process in the majority of companies’. And this is more than 30 years after the concept was first described!
Why is it that a process designed to overcome a major challenge in business; that is, each function planning its own activities with minimal reference to other parts of the business, has not been more widely adopted?
The crux of the problem is shown in the response to the survey’s lead question ‘How much senior executive involvement is there in the process?’ We assume that companies responding to the survey understand what S&OP is and the processes attached to it; the most important being that the senior executive champions and leads S&OP, because only they are able to unify all the functions. Yet only a quarter of respondents say this is what happens in their organisation.
In the same vein, less than 20 percent of respondents consider that S&OP is part of the strategic approach to their business and only 13 percent of companies has an ‘action’ approach to S&OP outcomes. So even with a quarter of senior executives stating they are leaders of S&OP, some of them do not understand the fundamental underpinnings of the process.
When working with companies more than 20 years ago to implement S&OP, I found that some were quickly successful and others should not have commenced the journey – it was all about the attitude and approach of the senior executive. The successful executives quickly understood the fundamentals (which are not difficult) and required their executive team to be equally competent.
It was not about inventing a new name for the process or agonising over what new software to acquire; it was (and is) about leadership and management. Well designed IT applications will assist the process, but only if those taking part understand what the process is.
The results of this survey illustrate that however good is a concept, the success of its implementation in your business will depend on the willingness by your management team and by you to learn and understand the principles and processes of the idea or approach. This can be difficult in today’s climate of ‘instant’ everything!