How Do You Define S&OP? Would a Child Understand It?


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If you ask five professionals who work in supply chain management or manufacturing to define sales and operations planning (S&OP), you’re likely to get five different answers. How companies—and the individuals who work there—define S&OP often depends largely on the role and maturity of the S&OP process within their enterprise. But what if you asked them how they would explain sales and operations planning to a child?

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A member of the Steelwedge S&OP/IBP Community on LinkedIn posed this very question in a discussion forum. You can view that conversation here (you must be a member of the group to view and join the discussion—go ahead and join us there!). Five people have weighed in there since yesterday, and nine have offered up opinions in total—all providing some interesting perspective. Noted supply chain management and S&OP expert Lora Cecere had this to say:

I would tell a child a story. This is for a boy…

“I know that you play many different types of sports. Football, swimming, basketball, rugby… Have you ever noticed how different each of these games are, but yet we call them all “teams”? In fact each of these “teams” have different rules and goals, but that there is always a coach or a quarterback that calls the rules of the game? The making of products and the delivering of services in large organizations is similar. Each company has many players, but they need alignment. The average company has 150 systems and over 20,000 employees but they cannot see the “game of winning in their market.” S&OP improves alignment by a factor of 2 and enables the organization to tie planning to execution by outlining the “rules of the game.” It enables the organization to tie planning to execution by having a clear quarterback or coach that can call the right plays on the field of play. It allows companies to improve their competitiveness and win more together.”

Scott Roy weighed in with this:

A business without S&OP is like having a 6 seat van and giving everyone a steering wheel, gas pedal and brake. Without S&OP you are not in control and you don’t know where you are going. S&OP is putting in a single steering wheel, brake and gas pedal. You put in a designated driver and as a business you decide where you are going together…

Andres Arce, who said he has three young children, offered up a definition that sounds based in first-hand experience:

- Suppose you are having a birthday party and would like to invite your entire classroom to celebrate.
- Let’s pretend your class has 5 boys and 5 girls including yourself.
- It’s NOT a drop-off party, so ONE of the parents will come with your classmate, maybe the father or maybe the mother.
- ANY kid would agree, a party is NOT a party without ‘goody-bags’ to take home.
- Also, MOST kids would agree that girls love ‘girly good-bags’ and boys like ‘boyish goody-bags’, so probably adults would prefer ‘adult goody-bags’. You think?
- SO, how should I plan for the goody-bags? How many should I prepare of each kind?
- What if I don’t have enough ‘girly goody-bags’? Or enough ‘boyish goody-bags’? Will those kids go home sad? Will they want to come to my next party?

S&OP is a way to plan, so that I have the right mix of ‘goody-bags’ at the right time, so that everyone leaves happy. I may need to collect and review some information before the party, so that I know how many kids are coming, if they are coming with mom or dad, so that I know how many ‘goody-bags’ of each type I need. That way everyone leaves happy and we don’t waste time and money on extra ‘goody-bags’ that may go to waste.

Head over to the Steelwedge S&OP/IBP Community to see the other responses. We’d love to hear how you would define sales and operations planning for a child. Weigh in with your responses here in the comments section!