The ripple effects of poor sales and operations planning (S&OP) can be staggeringly costly. “Bad numbers” create false information that both internal personnel and vendors alike act on. Clearly, it negatively affects production and diminishes customer service. The consequence of a poor S&OP process severely and negatively affects the income statement and balance sheet and other business outcomes.
High performance organizations have an S&OP process with high quality and timely information flow which initiates material flow from vendors into production and then to customers. S&OP is a pivotal process that aligns and synchronizes the management team for a defined decision-making process with clear accountability for the express purpose to achieve the company’s operating objectives. As a result, vulnerability to silo boundaries and tensions is prevented by strong leadership that ensures a coordinated set of ground rules for effective cross-functional teamwork, communication and accountability. The entire business is the beneficiary of a truly effective process.
There are eight prerequisites to developing and refining a sales and operations planning process:
- Understanding by executive leadership of the S&OP process and its benefits.
- Executive leadership’s commitment, sponsorship and persistence.
- Design the initial S&OP process.
- Organizational alignment and clear accountability.
- Information technology support.
- Performance measurement.
- Change management.
- Refine the S&OP process.
Executive leadership can have a firm grip on how planning and execution decisions drive the company’s performance.
Using our experience and expertise will help management supercharge S&OP progress toward achieving higher and higher levels of operating performance.