If you want to have your supply chain perfectly in order, an integrated strategic and tactical planning is essential. Tactical planning that focuses on aligning supply and demand. Demand in the shape of sales plans, supply in the shape of replenishment of stocks from the suppliers, plans for the use of production capacity, and the deployment of warehouse and transport capacity in distribution. Strategic planning aimed at the phasing out of old products and introduction of new ones, making agreements with suppliers, and creating sufficient production, warehouse and transport capacity. All integrated into a well-coordinated, coherent and deliverable plan that’s also financially sound.
Growing towards a successful S&OP process
Gartner has developed a maturity model and described how this maturity can be achieved. In essence, the story is that with all importnat aspects of a business, steps need to be taken to grow from unconscious and incompetent to conscious and competent. This calls for serious changes for the leadership, executive organization, processes and supporting systems. All to drive a growing interconnection and cooperation in the network of suppliers and customers.
Depending on the current maturity level and complexity of your supply chain, it’s a good idea to use an iterative growth process under the motto, ‘think big (en route to the perfect process), start small (start with an achievable first goal that can be reached quickly), grow fast (ensure you maintain a brisk momentum as you move towards that perfect process).
What steps are involved in the growth towards a successful S&OP process?
It will take 4 steps. And the involvement of the entire organization:
Step 1 – Awareness.
Top management becomes aware of the strength and possibilities of an integrated S&OP process, and the requisite changes needed to achieve it, including a (customized) software system to support the process. The people and resources are made available to make a start with the iterative development.
Thereafter, the following 3 steps are carried out iteratively:
Step 2 - Design.
A new phase in the growth of the S&OP process is designed, including a plan for introduction within the organization, as well as a design and implementation plan for (the extension of) the software system that will support this process.
Step 3 - Implementation.
The software system is (further) developed and introduced. This runs parallel to the organizational changes needed to further implement the S&OP process.
Step 4 – Safeguarding.
The world around us is continuously changing. To safeguard the chosen solution for the future, 'thermometers' need to be installed at specific points in your processes and systems. These let you monitor the quality of plans and execution, and identify any changes occurring in the working environment. This feedback enables you to respond quickly and adequately, and thereby keep people, processes and systems (and thus results) at the desired high level.
Do you also want a successful S&OP process?
With an intelligent S&OP process you achieve the optimum balance in your supply chain. Sales and operations are perfectly coordinated, both strategically and tactically. Your customers are happy. Sales are growing. Costs are under control. Want to know more? Contact Jan van Doremalen.
