Note:  On Tuesday, May 4, we were pleased to feature author and educator Tom Wallace in a webinar entitled, “Myths, Misunderstandings and Misinformation About S&OP.”  Drawing from his decades of experience as a forecasting and sales planning leader, Tom revealed ten myths that can quickly derail an S&OP process and damage corporate performance and profitability.

Tom’s fascinating presentation is a must-watch for business people wanting to master the finer points of Executive S&OP. Click here to view the session on-demand.

If the number of questions that were submitted during the webinar are any indicator, Tom’s presentation certainly  got the audience thinking!  Tom was kind enough to respond to each of these questions following the live session and you can find his answers below.

(To learn more about Tom Wallace and Executive S&OP, we encourage you to visit www.tfwallace.com and consider picking up his book Sales and Operations Planning: The How-To Handbook, 3rd Edition.)

How to Launch Executive S&OP

Webinar Participant: ­Where do you start on creating an Executive S&OP? 

­Tom Wallace: With top management agreement to do a 90-day live pilot. (How-To Handbook, Third Edition, Pages 75-80.)

Webinar Participant: What is the best way to convince the team to attend the meeting and to express how important they are to the entire process?

Tom Wallace: Get top management to convince them. Seriously, if the leader of the business and his or her staff are truly committed to Executive S&OP, most of them will willingly go through the learning process and do their parts.

Webinar Participant: ­I work with small and midsized manufacturing companies. It is hard enough selling them on Manufacturing Resource Planning (MRP). Where do we start to get them to understand S&OP? 

Tom Wallace: Conduct an executive briefing. Get a decision from top management to do a 90-day live pilot. Then,…

Story

A man was walking with his four year old daughter.  The girl was full of energy, her attention easily caught by many interesting street activities.  The father instructed the girl to stay on the sidewalk.  After the girl repeatedly roamed off the sidewalk, the father became quite stern, scolded the child and demanded that she follow his instruction.  The girl, tears in her eyes, turned to her father and asked, “what’s a sidewalk?”

Clear Expectations

Do the members of your organization really understand what is Sales and Operations Planning?  Do they have the tools needed to efficiently and effectively run S&OP?

The Strategic Services team at Steelwedge Software has experience with a wide range of companies.  Some companies say they have an S&OP process but it may consist of a Sales forecast thrown over the wall to Operations.  Others say they do not have an S&OP process yet they have many elements that make up the foundation of successful S&OP.

Top 10

Here are the top 10 most critical elements we see in building a productive S&OP process.

10. Cadence – Defined monthly process with consistent participation

9.  Top Management Support – Executives mold, participate and highlight importance of process.  Executives should refrain from dictating the process and expected outputs.

8.  Product Lifecycle Management – New product and end of life modeling; timely visibility to new product launch dates and resource implications

7.  Performance Measurement – feedback loop enabling continuous improvement

6.  Analysis – Using resource time for analysis rather than data gathering and manipulation

5.  Easy access to critical information – one repository with frequent updates and quick access

4.  Units and Dollars – Aligned unit and revenue projections; agreement on unit of measure conversion method

3.  Tool Enabled Collaboration – a forecasting and planning…

Those following Supply Chain Industry Analyst Lora Cecere’s new Supply Chain Shaman blog (http://www.supplychainshaman.com) have read with keen interest her observations about SAP’s progress in the area of Supply Chain Planning.  Lora points out that while  SAP has made tremendous progress in many areas it is also struggling with integrating its many components – specifically Lora says that the “integration of business intelligence and performance management is moving [too] slowly.”    Her notes on the growing disappointment with SAP APO – from within and outside the SAP organization – are also worth noting (http://www.supplychainshaman.com/2010/04/inside-insider:

“I leave the event with two major disappointments.  The first is that the integration of business intelligence and performance management is moving slowly. …too slowly for this curmudgeon analyst.  I was hoping to see the results of the Teradata/SAP Business Objects integration and the launch of a new generation of predictive analytics.  While there is some progress in Performance Management, it is largely traditional reporting/dashboards.

The second is that SAP APO—SAP’s supply chain planning suite—was  largely business as usual. At the event, I saw small, incremental changes, but no major innovation like I saw in MII, PLM and transportation management.  I keep crossing my fingers. I would love to see  SAP have the courage to blow up APO and start again.  Who knows if it works for PLM, maybe there is a chance to bring innovation to a solution — and the larger Supply Chain Planning (SCP) market– that sorely needs to be redefined.”

As SAP friends and partners know, SAP has some truly outstanding employees and the SCM Product Group continues under the brilliant leadership of Lori Mitchell-Keller.  Yet, overcoming legacy products and dated, mis-guided inertia is difficult for even the most effective of executives.  The great news is that a whole new generation of cloud-based supply chain planning…