An effective S&OP process helps the management of any business in business decisions, strategies, and control over the business to make it successful. APICS has made a research on S&OP on various aspects like reasons for underperformance in S&OP, strategy to manage complexity, variability in demand and sales forecast and major shortcomings of S&OP.
For an organization, it would take several months or years to create a high-performance Sales and Operations Planning practice. Each and every Organization must improve its way to meet the demands that S&OP requires. Some of the requirements of S&OP include improving the communication skills, integrating various departments and processes, collecting and analyzing the data. The rate of improvement will be slower than expected during the process.
The organizations that have an underperforming S&OP process may not have a pleasant idea of causes of the underperformance. APICS research reported the underperformance provoked by lack of team unity, financial sequence and information analysis.
The definition of S&OP is that it is a procedure of developing skillful plans that provide the organizations the ability to strategically direct its business to achieve an emulous advantage on a regular basis by coordinating customer-focused marketing plans for new and existing products with the administration of the supply chain. The S&OP process attaches the vital plans for the business with its execution and reports performance measurements for continuous improvement.
Building S&OP Team Consensus
S&OP appeals both hard and soft skills. Hard skills include creating steady metrics, calculations and measurements. Soft skills are like leadership, developing relationship, influencing and consutative skills to align S&OP processes across functions.
Causes of Disagreement in S&OP Practices
Differing opinions are common and should be expected in the complex process of S&OP practice. The important thing is to discover why different opinions prevail and whether or not differing opinion is valid.
Differing Time Horizons and Perspectives
S&OP practices may not be conscious of the time horizons and the planning horizons described by the departments. Different departments such as finance, sales and marketing, production, research and development (R&D), may have different planning horizons which makes the process difficult to resolve.
People can modify the estimates based on the expectations of people. So, the forecast trust is only a balance of probability and accuracy in forecasting.
S&OP Team and Skills
The variety of skills required for the team is broadly based on the objectives of the S&OP practices like,
- Expanding revenue
- Reducing risk
- Developing customer service
- Quick response to market changes
- Minimizing inventory
In order to achieve growth and strength in supply chain processes control should be maintained. Agility is the new axle point for power and growth.