When it comes to implementing an effective S&OP process, do we need a hard-driving commander or a consensus driven committee?  After all, S&OP is about collaboration, right?  Well, yes and no.  An S&OP process must be collaborative.  But the implementation need not be heavily committee-based.

The Tony award winning musical Memphis includes a song titled “Change Don’t Come Easy”.  Oh how true that is.  In social norms and in business, change can be slow and painful.  So what’s a successful recipe for S&OP change?  Although every enterprise has its own unique characteristics that will influence its approach, here are five observations we see when assisting clients to employ best practice S&OP processes and tools.

Top Management Support: Do your senior executives know what S&OP is?  Do they understand the value of S&OP?  How committed are they to making S&OP truly ingrained in the culture of your organization?  When S&OP implementations fail, often the root cause can be traced back to a lack of senior leadership.  At all levels of the organization, it must be clear that the whole organization is committed to making necessary changes.

Company Goals Above Individual or Department Goals: What’s the goal of S&OP?  It should be to drive strategic business decisions that benefit the entire company NOT one employee or department.  Too often personal goals conflict with the greater good.  Strive to minimize such incentives that detract from the overall goals.

Make Decisions and Keep Moving Forward: Cross functional representation is required to get buy-in from all business disciplines.  One person will not implement S&OP on her own.  Assemble a group of knowledgeable doers who have the company’s interests at heart and know their functional area well.  When this group reaches an impasse, a single S&OP sponsor/leader should step in and make key decisions. …

Note:  On Tuesday, June 22, the University of Tennessee and Steelwedge were pleased to feature author and educator Dr. Paul Dittmann in a webinar entitled, “Transforming the Supply Chain Into a Competitive Advantage.”  Dittmann is 30-year supply chain veteran and co-author of the recently published book The New Supply Chain Agenda.

Paul’s fascinating presentation is a must-watch for business people wanting to learn the finer points of  supply chain strategy and sales & operations planning. Click here to view the session on-demand.

Following the live event, Paul was kind enough to respond to audience questions and you can find his answers below.

(To learn more about Paul Dittmann and the University of Tennessee Knoxville’s Demand and Supply Integration Forums, click here.)

What are the key metrics to measure supply chain performance?

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We currently we have an issue related to forecast accuracy. The sales team creates a forecast based on the budget, even when they know the number that they put in forecast is not achievable. Is there a way to solve or accommodate this issue?

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Is there a way to unleash a company’s potential when the budget for technology is limited?

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by LORA CECERE, Altimeter Group, www.altimetergroup.com

In the movie Snow White, the Queen possesses a magical mirror that answers any question, to which she often asks: “Mirror, mirror on the wall, who in the land is fairest of all?” …to which the mirror always replies “You, my queen, are fairest of all.”

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Companies want to know “who has the best supply chain?” Unfortunately, there is no supply chain magic mirror;  however, each June we can get summarized financial data.  While not a perfect mirror, it is a partial reflection. It is definately more accurate than mistakenly believing that each supply chain is as good as it gets (e.g. the Queen’s magic mirror in Snow White).

The normal cycle of financial reporting makes June a perfect month to review the past year.  So just as students gather around bulletin boards at the end of the school term and check their grades, in June, I scour websites to understand how supply chains stack up. Luckily, two articles –the CFO Magazine’s Working Capital Survey (http://www.cfo.com/article.cfm/14499542) and the CSCMP Annual State of Logistics Report (http://cscmp.org/memberonly/state.asp)– are published in June to serve as year-over-year guideposts to answer the question, who does supply chain best?

2009. A Year in Review

2009 was a true litmus test.  It was the height of the recession. Aggregate volume declined 23% and fundamental demand shifted.  Despite investments in technology, in aggregate, the supply chain response was slower in this recession than in the prior 2001 recession.  There is a growing gap between leaders—companies that really understand and practice the concepts of supply chain management—and laggards.  Companies that excelled at supply chain management sensed demand changes 5X faster  and realigned network decisions than their peer groups (http://www.supplychainshaman.com/category/supply-chain-economic-recovery/).

For many, 2009 was a working capital…