On May 29, 2013, Tom Wallace, sales and operations planning (S&OP) author and educator, and Steelwedge Vice President, Nari Viswanathan, presented a webinar entitled “Is Your Global Planning Like Whack-A-Mole?,” as part of the Steelwedge 2013 Agility Webinar Series. Hundreds of people joined the webinar to learn more about successfully navigating the often turbulent waters of global planning.
Due to the strong response, Tom and Nari were unable to answer all of the questions that were submitted during the live Q&A at the end of the webinar. We’d like to thank Tom for responding to additional questions posed during the webinar here:
Q: During the webinar, you spoke about how BASF, the world’s largest chemical company, shifted from local volume orientation to global value orientation, and as a result, increased visibility across the supply chain. Would you recommend the BASF model for a company with one manufacturing plant and a global customer base?
A: No, I would not. This company does not need global sales and operations planning because it has supply centralized in one area. One needs both demand and supply operating globally to justify the additional effort and complexity involved in global S&OP.
Q: What does BASF consider as optimization? Could that be SKU rationalization?
A: No, it’s not SKU rationalization. It’s allocating production in the most cost-effective manner consistent with customer service goals, inventory targets, and so forth.
Q: You referenced several companies as best-practice examples of global planning practitioners. How were the S&OP implementations done in these companies? With a consultancy firm? By themselves?
A: With Procter & Gamble, I helped them a bit, and the Oliver Wight group did the heavy lifting from a consulting standpoint. I’m not aware of how the other companies implemented; they did it before I worked with them.
Q: Isn’t the core of sales and operations planning forecast accuracy improvement?
A: Absolutely not, and it’s a good thing, because the forecasts will hardly ever be accurate. S&OP enables a company to cope with inaccurate forecasts better than any other process. Actually sales and operations planning almost always enables a company to improve its forecasts, not the other way around.
Q: Sales and marketing should be accounted for in improving forecast accuracy, right?
A: I believe that sales and marketing should be accountable for the validity of the forecasts. Others may be involved in a project to improve forecast accuracy.