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. Keep moving forward. Don’t let anything stop progress. S&OP is an iterative process and changes you make today may need to change again later. Keep moving forward.
Clear Expectations: What is S&OP? Why do we need this? What’s wrong with what we’re doing today? If your employees are asking these questions, you better have the answers. Make sure all participants see the forest. What are the major benefits to collaborative planning? What is each person’s role in the process? How will S&OP make us better at our core responsibilities, drive demand, supply and financial plans and increase profitability? Employees should feel empowered by the process not burdened.
Training: Make sure that ample training is provided to solidify new processes and tools. What ‘sticks’ is often what has been practiced. Comfort with the new process and tool comes with experience. Create those initial experiences through training.
Tips to remember:
- Change don’t come easy
- Top management support is required
- One person will not do it alone
- Cross-functional participation is mandatory
- Make decisions and keep moving forward
- Paint clear expectations
- Solidify change through training
