S&OP presents many challenges to business enterprises to implement and sustain a world-class S&OP process. One common thread is the need for effective collaboration. What sounds simple, in general terms, is often difficult when the details come into play. Details may include different goals and incentives for disparate functional groups and individuals and inadequate tools to facilitate meaningful collaboration.
Functional groups have unique goals and performance indicators. Sales may be driven to achieve high revenue targets while the Operations group may focus on minimizing labor costs and inventory levels. The key point here is NOT that all groups and individuals should share the same focus and effort. To the contrary, best practice enterprises heavily leverage the unique talents of their employees. Sales sells and Operations drives the supply chain. That said, it is critical that the enterprise has a single, consensus plan that is feasible and all parties agree to execute against that plan. Companies that fail to achieve one agreed plan, are prone to falling well short of optimal inventory levels, customer service targets, availability of desired inventory and company financial goals. A less tangible, but very important by-product of a missing consensus plan is a culture that pits individuals and groups against one another rather than acting as a cohesive team.
From my work at Steelwedge with several clients, it’s been very pleasing to see how the Steelwedge tool promotes cross-functional interaction. Users exchange quantitative and qualitative inputs in an environment that pulls together information in a way that had not previously been available. Beyond data visibility, users are gathering field input, validating assumptions and driving an enterprise plan rather than multiple, isolated departmental plans.
At the end of the day, solutions depend on people, process and technology. If the process and the technology facilitate collaboration, the people become more productive…and happier, too!