Does Your Planning Process Leverage Your Sales Pipeline Intelligence?

Bruce Richardson, Chief Strategy Officer,

Bruce Richardson, Chief Strategy Officer,

Undoubtedly, companies have a lot of good information in their CRM systems. But they often don’t know how to best use it to manage their entire business, from Sales to Supply to Finance. What they need is a planning tool that enables them to extract, understand and translate the knowledge captured in the sale funnel, along with other demand signals, into actionable insight on how to deliver on-target results.

This topic will be addressed during a Steelwedge-sponsored SupplyChainBrain webinar entitled “What Do Cloud, Your Sales  Pipeline and Your Demand Plan Have in Common?” on April 22, 2014 at 12:00 EDT. Chief Strategy Officer Bruce Richardson will provide guidance on how to fill the “missing link” in the sales and operations planning (S&OP) process—leveraging the intelligence contained in the sales pipeline to inform the consensus demand planning process.

During this webinar, Richardson will explain how companies can:

  • Provide visibility and insight into significant pipeline changes, assumptions and expectations
  • Aggregate pipeline information for supply/demand balancing and operations planning decisions
  • Translate pipeline confidence into accurate revenue and margin projections for better Integrated Business Planning

The webinar will conclude with a Q&A session during which attendees will have the opportunity to submit live questions to the speakers. Click here to register.

Featured Presenters:
Bruce Richardson, Chief Strategy Officer,
Ed Lewis, VP, Product Marketing, Steelwedge Software

Program Moderator:
Robert Bowman, Managing Editor, SupplyChainBrain

We hope you can join us for what will prove to be a compelling and informative session. In the meantime, let us know in the comments section if—and how—you’re leveraging sales pipeline data in your planning processes.

Driving Superior Business Performance Through Supply Chain Innovation: SCMI Spring Symposium

Steelwedge is proud to participate in the University of San Diego’s 3rd Annual Supply Chain Management Institute Spring Symposium, which will be held April 14-15, 2014 at the university.

Ed Lewis, Steelwedge

Ed Lewis, Steelwedge

Ed Lewis, Steelwedge Vice President of Product Marketing and Planning, will serve as a panelist on a discussion entitled, “How Technology is Enabling and Driving Supply Chain Innovation.” The panel will address how competition in supply chains is always increasing, forcing companies and supply chains to search for new technologies and innovations that lead to superior performance. Topics of discussion will include new supply chain technologies, potential technology innovations, and key factors influencing the adoption of supply chain technologies in order to achieve superior business performance.

Other panelists include Angel Mendez of Cisco Systems, John Urban of GT Nexus, Inc., and Mark Utter of Qualcomm Technologies, Inc. David Pyke of the University of San Diego will serve as the moderator.  The panel discussion takes place on Tuesday, April 15 at 12:45 pm PDT.

About the SCMI Spring Symposium:

There is little doubt that creating and sustaining an innovative supply chain can lead to superior business performance. This includes gaining competitive advantage, increasing market share, and creating greater levels of profitability.  SCMI’s Spring Symposium is a thought-provoking event focused on the power of innovation. Attendees will have the opportunity to learn how other business leaders are leveraging innovation to drive superior business performance.

The event will address various areas where creating an innovative supply chain can lead to superior business performance. Some of the subjects that will be discussed include:

  • Incorporating Innovation into your Supply Chain Strategy
  • Creating a Culture of Innovation
  • Strategic Sourcing & Procurement
  • Supply Chain Collaboration
  • Creating a Sustainable Supply Chain
  • Supply Chain Technology
  • Green Supply Chains
  • Outsourcing, Near-sourcing, Re-shoring
  • Talent Management
  • Managing Supply Chain Risk and Complexity

For more information on the SCMI Spring Symposium, click here.

Will we see you at the event? Let us know in the comments!

Why S&OP Belongs in the Cloud

sales and operations planning softwareHurricanes and tsunamis. Diverse and aggressive competition. Volatile financial markets. Fickle consumers. Uncertainty is clearly the new norm.

Gone are the days of rigid business plans and fine-tuned demand forecasts. Today’s businesses need unprecedented organizational agility to quickly recognize, recalibrate and respond to shifting demand in the face of volatility.

Integrated business planning (IBP) – the next phase of S&OP maturity – aligns sales, operations, finance and other functional areas into a single line of sight, from plan to performance to profit. But how do you achieve the accessibility, collaboration and immediacy needed to act on a unified planning view at the speed of business?

The answer lies in the cloud.

According to Gartner, cloud computing-based solutions, across S&OP and all of supply chain management, are quickly becoming the requirement. Case in point: integrated business planning. IBP requires that executives (and systems) across functional areas – e.g. sales, marketing, operations, supply chain, manufacturing, finance– have the tools and processes to work together. Only a cloud-based platform can quickly deliver on this promise, and here are four reasons why.

#1 Executive Buy-In

IBP requires a connected, collaborative view of S&OP processes across the enterprise to answer pivotal questions, such as the variance between revenue forecast, budget and compensation target by service line; or expected quarterly revenue by business unit. The lynchpin to this connected approach is executive buy-in from all functional areas. Many cloud solutions today allow you to quickly prototype micro applications. This ‘try before you buy’ approach offers a no-risk, hands-on evaluation that can help prove the system’s value and break down resistance to change.

#2 Any Time, Anywhere Access

To truly engage today’s professionals in the process, you need a platform-neutral approach that works on both enterprise and modern mobile platforms, inside and outside of your corporate network. With the cloud, you can leverage existing system investments and easily merge multiple data sources – whether it’s from legacy on-premise ERP, CRM or finance applications or with Software as a Service applications like – and deliver them on demand to anyone in your organization, anywhere in the world.

#3 S&OP Ecosystem Connectivity

Organizations are dealing with increasing variety and volumes of “big data” coming from internal, partner, customer and social sources. For S&OP, the big data management requirement is exacerbated by the need to look at revenue, product, SKU and component information across a variety of geographies, operating divisions and time horizons, and then roll up that data for review at quarterly, monthly and even weekly increments. This, in turn requires a significant boost in processing power and analytics to make sense of the data for faster decision-making.

Connecting all of this data into planning and understanding how shifts in supply and demand will impact operations calls for scalability and flexibility that traditional on-premise solutions can’t deliver from one platform. With a single IBP platform in the cloud, you ensure a level of always-on elasticity to meet your data demands as they grow. Plus, the cloud’s pay as you go model enables you to scale as your business demands, not as your procurement dictates.

#4 Predictive Analytics

Not only is processing power important for developing actionable plans based on vast amounts of input data, but it’s a critical consideration to allow for contingency planning – a key driver for agility, and the heart of true IBP. Strategic, “what if” scenario modeling enables you to explore a myriad of business scenarios that impact the bottom line. Creating ad-hoc modeling to understand not only supply/demand trade-offs, but also the customer and financial implications of those moves would be cost-prohibitive without the elastic computing power of the cloud.

Final Thoughts

With the shift away from traditional annual or quarterly calendars, S&OP conversations and technologies need to be different. The cloud provides an ideal foundation for modern business plan decision making, allowing you to sense for signals of change and take a tighter look at interdependencies that impact departmental and corporate processes.

Share Your Insights: Participate in Supply Chain and Manufacturing Research

supplychaininsightslogo_220x125tSteelwedge has been privileged to work with Lora Cecere’s Supply Chain Insights on a variety of research projects. The goal of Supply Chain Insights is to conduct and openly share top-notch industry research among the supply chain community. In order to do this, it counts on supply chain professionals to participate in its surveys. 

We’d like to invite you to share your insights by participating in two of Supply Chain Insights’ current open surveys. Completing these surveys will take just a few minutes of your time, and Supply Chain Insights is currently offering all survey participants a one-hour phone call with their research leaders to review the results.

Supply Chain Risk Management Survey: Click Here to Respond. 

  • What is the state of risk management at your company?
  • How does it compare to what it was five years ago and what you expect five years in the future?
  • What techniques do you use to manage supply chain risk

For Manufacturers, Retailers, Wholesalers/Distributors/Co-operatives and Third-Party Logistics Providers. This survey closes the evening of Friday, March 28, 2014, so you must respond today!

Digital Manufacturing Survey: Click Here to Respond

  • Will 3D printing and digital processes re-invent manufacturing?
  • Where are companies on the path towards using digital manufacturing technologies?

For Manufacturers and Retailers who manufacture products.  Specifically those in supply chain, IT, manufacturing, corporate social responsibility and business leadership roles.

Please take a few minutes to answer these surveys, and let us know your thoughts on these topics in the comments!

Making a Smart S&OP Technology Selection: Are You Prepared?

Lora Cecere, Founder, Supply Chain Insights

Lora Cecere, Founder, Supply Chain Insights

Steelwedge is excited to host a webinar with Lora Cecere, founder of Supply Chain Insights, on Thursday, May 27, at 9:00 am PDT/12:00 pm EDT entitled “The Why and the How Guide to Making a Smart S&OP Technology Selection.” Click here to register.

While sales and operations planning (S&OP) has been around for 30 years, there remains significant opportunity for companies to fully benefit from it. Many manufacturers “get stuck” at the supply/demand balancing level and never progress into Integrated Business Planning (IBP). Why? It’s because the vast majority of companies still use Excel and manual efforts to drive their S&OP processes.

While no company will ever completely abandon spreadsheets, those who attempt to achieve S&OP maturity with only disconnected processes and solutions will never drive truly collaborative, scalable planning. The alternative lies in selecting the right technology to power S&OP to the next level.

In this webinar, Lora Cecere will provide direction on:

  1. How the right S&OP technology can render big business benefits
  2. How S&OP technologies have changed over time
  3. How to select the S&OP solution that best fits your requirements
  4. How to avoid the pitfalls of implementation

Join this session to understand how technologies have changed and how you can select the solution that best fits your requirements.

Who should attend:

  • S&OP and Supply Chain Leadership
  • Demand/Forecast Planners
  • Business Planners
  • Heads of IT
  • Anyone involved in or leading an S&OP RFP project

We hope you can join us for what will undoubtedly be an informative and interactive webinar. Click here to register today.

In the meantime, what is your best advice for making an S&OP technology selection? Let us know in the comments.

Women in Supply Chain: Is The Gap Narrowing?

Michelle Jones, Vice President, Alliances, Steelwedge

Michelle Jones, Vice President, Alliances, Steelwedge

By all accounts, the gap between men and women in IT is narrowing. (At least that’s what I hear.) I read article after article stating roles and salaries for women in IT are on more of an equal footing with our male peers than ever before. That is GREAT news and might just be because women are starting in tech earlier and earlier.

This Huffington Post article, aptly entitled, “Will Women Dominate the Tech Field?” states that women outnumber men for the first time in a UC Berkeley Computer Science course. It might seem small, but it could be the start of something very big. If you like pictures—and who doesn’t?—check out this infographic from Women Who Tech to see just how and why the walls are coming down.

I’m personally thrilled to see women excel in technology. Not because we’re women, but because we possess an equally valuable skill set as our male counterparts and have just as much to contribute. The more IT talent there is out there, the faster the advances in areas like cloud computing, enterprise software and supply chain.

So, if the numbers are really trending in the right direction, I have to ask why research shows women only occupy 10 percent of supply chain leadership roles? A January 2014 article in Supply Management cites that figure from an SCM World review of Fortune Global 500 firms. Staggering.

I am a female executive in supply chain, albeit serving that industry versus managing supply chain operations, and I can’t get my arms around that number. I haven’t attended a product demo in recent history that did NOT include female management team member, so I needed to delve into this further.

What I found is interesting and made me feel a little better.

  • Mary Barra, GM’s EVP, Global Product Development & Global Purchasing and Supply Chain topped Fortune’s esteemed “50 Most Powerful Women in Business” list in 2013. Not too shabby!
  • LinkedIn boasts approximately 20 groups dedicated to women in supply chain. I bet that number was much smaller a few years ago.
  • SCM World held an event just last month dedicated to identifying those lessons learned by women who have risen to the top of the supply chain profession featuring a cast of exceptional female supply chain leaders from BP, Starbucks, Mars, Cisco, Colgate-Palmolive and more.  That’s some pretty serious cross-industry female talent guiding impressive, global organizations.

Finally, Supply & Demand Chain Executive came out with its 2014 “Supply Chain Provider Pros to Know” list last week. I was thrilled to make the list along with two of my male colleagues. And, candidly, it was the catalyst for this blog post. I was pleased to see the number of women recognized as individuals who support clients and this community to prepare for supply chain challenges in the year ahead. While not quite as dire as the 10 percent figure above, it’s clear we need more women in the ranks.

What can we do to promote more women in the supply chain profession? Here are my recommendations:

  1. Be a mentor. If you are a woman in technology or supply chain, pay it forward. Mentor a young woman looking to break into the field. There are global, national and local organizations to help facilitate that, or you can simply offer your experience to someone in your network.
  2. Don’t focus on gender, focus on ability. That’s my two cents, and it’s worked for me throughout my career.
  3. Reach out to the experts. There are some fabulous men and women in supply chain who are ready, willing and able to share their knowledge and guidance. Here are links to a few of the folks I admire the most in the field. If you don’t follow them, you should.

Lora Cecere
: Founder of Supply Chain Insights
@lcecere; @SCInsightsLLC and

Peter Bolstorff: CEO & President of Supply Chain Excellence
@SCEsupplychain and

Cindy Jutras: President, Mint Jutras
@ERP_cindyjutras and

Seema Phull: Partner, NorthFind Partners

Kevin O’Marah, Chief Content Officer, SCM World
@komarah and

Thanks for reading. If you have comments, questions or gripes, please do share them in the comments. I welcome your feedback.


The Most Important Performance Measures to Watch in Your S&OP Process

This blog post was co-authored by Jan Veerman and Freek Aertsen, Partners at EyeOn Solutions. EyeOn Solutions is a valued Steelwedge Consulting Partner

S&OP is hot! Looking at the number of publications regarding sales and operations planning (S&OP) the last couple of years compared to the gross domestic product (GDP) growth, we see an increase of the S&OP publications when the growth of the GDP is declining. Less sales drives companies to look at parameters they can influence: their S&OP processes.

S&OP and GDPS&OP and integrated business planning (IBP) are getting more attention. According to the Gartner S&OP Maturity Model, companies are struggling to promote their S&OP processes from Stage 2 (Anticipating) to the next stage (Collaborating). An astonishing 67% of the companies cannot get beyond Stage 2!

So we know it is difficult to manage and mature the S&OP processes. But are we completely left without tools, tips or tricks to make the best of what we are doing right now? Of course not, there are elements to improve in the processes. It all starts with measuring the performance of the important S&OP processes.

Most important performance measures to watch in S&OP processes

What indicators are important in the S&OP processes? A lot! So we have to select the most important ones. Generally, in a make-to-stock environment, these are the most important measures to watch in your S&OP process:

1. Service Level

2. Forecast Accuracy

3. Stock Level

4. Factory Performance

Four S&OP Measures to Watch1. Service Level

The service level measures the performance of the whole logistics organization in meeting the customer service expectation. On Time In Full (OTIF) can measure the service level, and to reach a good OTIF level, all the functions of the supply chain have to work at their best level.

2. Forecast Accuracy

Forecast accuracy (FA) measures how well the company forecasted the demand compared to the actual demand afterward. The better and more consistent forecast accuracy is, the better the supply chain can handle the expected demand (resulting in lower stock and higher service levels).

Forecast error can be measured in many ways. The most popular are Mean Absolute Deviation (MAD), Mean Absolute Percent Error (MAPE), cumulative error and average error or bias (E).

3. Stock Level

Cash is king nowadays! Suppliers want to have their supplies paid at delivery, while your customers extend their payments terms. One way to deal with a possible shortage in cash (because it is also difficult to lend money), is to free up money invested in the stock levels.

By predicting the demand more accurate (see forecast accuracy) and actively managing the stock levels, a reduction of these stock levels can be achieved and generate the valuable asset: cash.

4. Factory Performance

The performance of the factory can be measured according different measures, like CLIP, RLIP or LAP.

Confirmed Line Item Performance (CLIP) is a performance indicator measuring delivery quality, meaning the percentage of order elements that was delivered at the date as committed to the customer.

Requested Line Item Performance (RLIP) is a performance indicator for the degree in which market demands could be met, measured as the percentage of order elements that are delivered by the company at the date requested by customers.

With the factory performance measures as mentioned above, the overall performance of the internal processes can be monitored and give the ability to look for improvement areas.

Integrated software solution

We briefly touched what we believe are the four most important measures to watch in the S&OP processes. Of course there are many more measures to watch, but we need to start somewhere! Start with your journey to become one of the 33% of companies that made the transition to Stage 3 in the Gartner S&OP Maturity Model.

But processes alone will not do the trick. In order to measure, monitor and react, you need also to have systems in place to facilitate these processes. These systems need to be agile to the same extent that the processes do.

Old-school S&OP software packages tend to take too much time to implement, adjust to the specific needs of the customer, and changes to the software afterward are a source of frustration. Truly integrated Cloud tools can make the difference here. Cloud tools have no hardware to setup and maintain and leverage the data already in your operational systems by connecting to the cloud solution, which comes with predefined calculations, analyses and reporting capabilities.

Steelwedge offers a solution that supports a true integrated approach in managing the supply chain, internally and extended to your suppliers and customers. With the discussed four most important measures to watch in your S&OP, supported by tools like Steelwedge, you should be able to make the leap to the next phase in the S&OP maturity model and reap the benefits: better performance, lower stock levels, increased availability and happy customers and partners in your supply chain.

For more information, contact Jan Veerman – Partner, EyeOn Solutions at and Freek Aertsen, Partner, EyeOn Solutions at

Game On! Sony Plans for Biggest PlayStation Launch Ever With Steelwedge

Sony PS4In the world of video-game consoles, the Sony PlayStation is undoubtedly leading the pack. In January 2014, PlayStation 4 (PS4) sales were nearly double that of its nearest competitor. The release of new game consoles comes years after their preceding versions, so significant planning goes into the launch by their manufacturers.

Sony Computer Entertainment America (SCEA) launched the much anticipated PS4 in November 2013. There was high complexity inherent to readying the system in time for the make-or-break holiday season; allocating to the right reseller channels; assembling the right combination of accessories and game bundles; and ensuring the product launches at right price point. Sony used Steelwedge integrated business planning software to connect all the crucial people,  processes and data to help it navigate their biggest launch ever—delivering an anticipated approximately 5 million units in the coming months—without cannibalizing the ongoing PS3 business.

The Steelwedge services team helped fast-track Sony’s internal planning process with the
implementation of the Steelwedge solution in a phased approach. The first phase incorporated demand planning and an executive engagement phase of the total sales and operations planning (S&OP) life cycle.

Phase two involved synchronizing Sony’s new forecasting strength via supply planning and collaboration with Sony corporate suppliers and telescopic planning. Telescopic planning is a Steelwedge feature that enables easy movement between weekly and monthly planning periods, allowing Sony a much closer, more frequent look at impacts to its supply and demand.

“Without the insights we gained from Steelwedge on channel and bundling optimization and well as potential PS3 cannibalization, we wouldn’t had as powerful a launch plan,” said Sree Vaidyanathan, SCEA’s  Director of Business Applications. ”Months ahead of the launch, we sold out $1.7 million in pre-orders. We are planning to sell approximately 5M units of the new PlayStation 4 console by April, and we are more confident in that forecast due to Steelwedge.”

Increased visibility from consensus planning at SCEA translates into better:

Profitability. SCEA forecast accuracy improvement from 60% to high ~90% immediately
drives better profitability—ensuring the right goods at right time and right place. Now,
Sony has enough data insight to push platform and SKUs to channels, more intelligently.

Market Share. Better consensus planning, powered by Steelwedge, helps SCEA make better supply/demand tradeoff decisions, due to more reliable data. The faster to market, the better the market share potential.

Scalability. The cloud-based solution from Steelwedge allows Sony to power its process
in scope with its evolving market.

Risk Mitigation. The proven, secure Steelwedge platform limits Sony’s IT exposure to
risks around data, business continuity and security.

To learn more about Sony’s implementation of Steelwedge, read the full case study here. Do you have any best practices to share around using the S&OP process to enable a successful product launch? Share your insights in the comments section!

Why won’t Sales participate in our S&OP process? Five tips to get Sales in the game

Change is a challenge. Implementing sales and operations planning (S&OP) is a massive challenge. We put recurring processes in place with meetings scheduled months in advance. We gather vast amounts of data and force it into predefined buckets. And we expect diverse functional groups to talk with one another and arrive at a consensus plan. But despite the most diligent efforts, every practitioner of S&OP—even those who are even best in class—encounters obstacles to true collaboration.

So, what’s blocking collaboration? Each functional group may have differing responses to these questions, based on their priorities:

  • Are we planning in units or dollars?
  • What’s our planning horizon?
  • What level of detail is needed?

In the table below, goals differ between functional groups. Sales wants to maximize revenue, thinks in dollars and is focused on the near term. The Operations group wants to know what to manufacture, when it’s needed and where it needs to go. Operations is focused on minimizing operating costs, thinks in units and is looking at the medium term. Meanwhile, Finance is trying to maximize profit, manage cash flow, thinks in both units and dollars and is focused on a much longer horizon.

Goals of Sales, Finance, Operations

So then, is it surprising that Sales does not want to participate? Here’s what we’re asking from Sales:

  • Provide your forecast much further into future
  • Tell us specific products you will sell
  • Tell us number of units of each specific product
  • For each product specific unit projection, tell us into which months they fall
  • And, by the way, if you don’t sell to meet your forecast, we’ll have a conversation about that, too

So what’s a salesperson to do? Well, the first inclination is to resist. “I gotta be out in the field, lookin’ my customer in the eye. I don’t have time to give you a detailed forecast.”

As an organization that sees the value of sales and operations planning, we must conquer the “Get me outta here” reaction. Mandating sales participation may be necessary, but that’s not enough. The organization needs to allow salespeople to do what they do best…sell. That means making S&OP easy and helpful to Sales.

Here are 5 tips for bringing Sales into the S&OP partnership:

  1. Provide a starting point. Salespeople are much better adjusting a forecast than creating one from scratch. The starting point can be a statistical forecast based upon historical demand.
  2. Make it easy to enter forecasts. Allow salespeople to enter their forecasts in a user-friendly tool. The tool should allow users to view actuals and forecasts at desired level of aggregation. That is, allow roll up of values by customer, by region, by product family or other levels as defined by planning hierarchies. Then spread the aggregate forecasts across the all other levels using sound business logic. The planning tool does the heavy lifting, not individuals.
  3. Share the value of a better S&OP plan. A more accurate consensus plan will translate into better customer service levels and improved customer satisfaction. Yes, it really works, and increased satisfaction usually bodes well for increased sales.
  4. Set realistic and achievable sales targets. S&OP requires one plan that the organization agrees to execute against. Sales should use the same approach to set sales targets. Stretch goals are fine provided it’s clear that these go above and beyond the S&OP plan.
  5. Put the thumbscrews away. Measuring forecast accuracy is a great way to learn from the past and make improvements. It should not be the means by which to call out underachievers. If a salesperson’s actual sales are significantly and consistently under or over forecast, look into what may be driving that behavior. Does the company demand stretch goals and set commission plans at levels that are unlikely to be achieved? Is the salesperson reluctant to share leads for fear of being held accountable if she does not close the deal?

Sales participation is critical for S&OP success. Make it easy and non-threatening and the challenge may become less massive.

Avoid the Most Common S&OP Mistakes: Here’s Our Top 5

Knowing is half the battleIn the wise words of G.I. Joe, “Knowing is half the battle.” And in the battle for sales and operations planning (S&OP) success, knowing where the potential pitfalls lie will serve every company well. Some of those pitfalls were recently outlined by Steelwedge Vice President of Industries Danny Smith in a Manufacturing Business Technology article entitled “The 5 Most Common S&OP Mistakes And How To Avoid Them.”

Recognizing that knowing what not to do is just as important as knowing what one should do, Danny described the following mistakes that companies frequently make in their sales and operations planning initiatives:

1) Lack of executive ownership. The biggest problem I see is the executive leadership team not owning the S&OP process. If executive leadership isn’t fully engaged, the process won’t be as successful. If they aren’t engaged, find out why. Maybe you aren’t giving them the things they need to run the company: forward-looking, global visibility; timely, concise information that is digestible to them (e.g. their KPIs) and that is actionable; the ability to ask “what-if” questions so they can put boundaries around their risk. A good technology platform can help tremendously here. After all, the best people and process can only take you so far. Technology serves as a lever to speed up the process and shift the focus from calculations to analysis.

2) No cross-functional engagement. The whole point of S&OP is getting the entire organization moving in the same direction. That’s hard to do without the involvement of all the key stakeholders in the process. Research around S&OP failures right after the global downturn showed that a third of the respondents didn’t have Sales engaged in the S&OP process. That was the good news! Almost half didn’t have Operations or Finance engaged. Lack of a way to translate between different functional views of information tended to leave one or more participants out of the process. Sales would input revenues by account, Operations would need demand in units by product, and Finance wanted to see net margin. To really make S&OP work, you need to have the same information, but expose it to each stakeholder in the form they need and understand. Even if you start with a quick win/small project, extend the scope to just across the functional boundaries to provide the needed translation.

3) Focusing only on one consensus number. An S&OP mantra for years has been getting to a “one number plan,” but this simplifies things too much. And worse, it limits the value of S&OP for executives. Executives are paid for predictability. It’s their job to identify and proactively mitigate risk – to avoid the danger before it’s a reality. S&OP can be a great tool to help (i.e. GPS telling you to avoid a route due to traffic) but only if you don’t fall into the “one number” trap. Instead, you need to plan in ranges – worst case, best case and expected – all along the S&OP process. The ability to identify the impact of things not going to plan is priceless. As Eisenhower once said, “Plans are nothing; planning is everything.”

4) Complexity! Follow the “keep it simple” principle, especially with metrics. I’ve seen companies become paralyzed trying to make the right decision when they have to evaluate hundreds of metrics; the complexity prevents them from being able to ask the right questions. Pick your big 10-15 metrics (see Figure 1) and go with them. Track them, make performance transparent so everyone understands where they are, and learn from them.

Figure 1: Simple KPIs

Figure 1: Simple KPIs

5) Lack of documentation. How do you learn from your mistakes? You have to capture all the institutional knowledge and assumptions that go into your plans. Provide a mechanism to capture this information from every participant, and make it easy for them to contribute. For example, if you collaborate as a group using social media, automatically capture those chats and the context and embed it into the plan assumptions so you can understand the context of decisions or changes six months later. Remember, those who don’t learn from history are doomed to repeat it.

Do you agree with Danny’s top five S&OP mistakes? What lessons have you learned in your journey to sales and operations planning success? Weigh in with your “war stories” in the comments.