Do you feel a bit paranoid?
Sometimes you get the feeling something is not quite right. Your gut is telling you to watch out, but your head is trying to convince you that you are just being paranoid. This is how some of us feel about sales and operations planning (S&OP).
The cross-functional process has gained immense momentum recently. Firms can finally see how S&OP helps tackle the root causes of excess stock - a luxury no one can afford these days. S&OP brings better anticipation and integrated decision making. In turn, this means better and cheaper solutions become available for every problem.
So why are we still paranoid? Because deep down, people still think S&OP is just a supply chain thing. After all the white papers, case studies and conferences on the subject, how can they still think that? Trust me, they do.
Maybe it is because a lot of the issues that are highlighted by the S&OP process have a strong supply chain focus: stock levels, material replenishment or capacity utilisation. Maybe it's because only the supply chain function was ever interested in the other key S&OP area: sales forecasting.
Ultimately, the feeling that S&OP is just a supply chain thing is inaccurate and unfair. The main focus of S&OP is to make money. The decisions involved relate as much to sales or finance, as they do to operations. So ensure you have a strong commitment to S&OP from the top. If your chief executive makes his commitment obvious, it will signal that this is a new way of working for the whole business, not just the supply chain.
The scepticism around S&OP being just a supply chain thing relates to the fact that it demands a new order of cross-functional accountability. Suddenly, cross-functional teams will be responsible for the consequences of their joint decisions. Deviations from plans will be accounted for. And because nobody likes that idea, they just keep pushing it back to supply chain. Or am I just being paranoid?
''Hugh Williams is founder of supply chain planning specialist consultancy Hughenden www.hughenden.net''
