Is Your S&OP / IBP Process Solving Business Problems
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The document discusses how to improve S&OP (Sales and Operations Planning) and IBP (Integrated Business Planning) processes to effectively solve business problems and engage stakeholders. It emphasizes the need for regular assessments of how S&OP is addressing issues, and provides strategies for positioning S&OP as a central, problem-solving method through strong leadership and structured meetings. By focusing on core principles and evaluating meeting effectiveness, organizations can enhance the efficiency and impact of their S&OP processes.
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STRATEGIES AND SOLUTIONS
Making S&OP a successful problem-solving tool can be done. Begin by coming up with or updating the
core principals of the process for your company. Some fundamental principles include:
o S&OP is owned and directed by the senior leaders of product, demand, supply, and finance, as
well as the executive leadership.
o S&OP is a business planning and execution process.
o The reasons why numbers are presented is as important as the numbers themselves
[assumptions derived from strategies]
o S&OP is a decision-making process.
o Perfection is not required, only a focus on improving.
o S&OP is the only method for approving the final set of plans to run the business.
Also, look at the flow of the meetings, and ask the following questions:
o Is there adequate decision support via key performance indicators to flag issues?
o Is there an agreed-upon approach to decisions, including supporting analysis?
o Do people participate actively?
o Do facilitators frame key issues and decisions, or just leave them on a page to be read?
o Do facilitators brief functional leaders prior to the executive S&OP meeting?
o Are decisions from previous meetings tracked?
o Is there a feedback process involving all participants that assesses the value of each S&OP
step as it occurs?
This evaluation will reveal key areas for improvement and help reinforce the focus on problem solving.
Ultimately, it will be possible to create a successful plan for making S&OP efficient and effective.
A version of this article was first published by APICS Magazine in Jan 2015.
PETER MURRAY IS A S&OP/IBP, DEMAND AND SUPPLY CHAIN PRACTITIONER AND
CONSULTANT. HE CAN BE REACHED AT PETER.MURRAYCIRM@OUTLOOK.COM](https://image.slidesharecdn.com/isyoursandopprocesssolvingproblems-petermurray-151119145406-lva1-app6892/85/Is-Your-S-OP-IBP-Process-Solving-Business-Problems-2-320.jpg)
Is Your S&OP / IBP Process Solving Business Problems
- 1. Page1 IS YOUR S&OP/IBP PROCESS SOLVING BUSINESS PROBLEMS - HOW TO TURN A "NO" INTO "YES!" ORIGIONAL PUBLICATION IN APICS MAGAZINE JANUARY 2015 All too often, S&OP/IBP processes falter and stall, resulting in a loss of stakeholder engagement. Most importantly they fail deliver on the value of an integrated managing process with a regular cadence. Some leaders and practitioners respond to such situations with new efforts to do S&OP again or differently with new people, a new model, different outside help, or even the same people just in different roles. Keeping S&OP worthwhile comes down to stakeholders seeing S&OP and its related processes as the main collaborative initiative to solve problems. It’s therefore essential to frequently step back and ask the team, “Are we solving problems with S&OP?” If the answer is yes, then the next step is to build capability and performance; if no, it’s time to figure out why and turn that “NO” into a “YES!” There are so many reasons S&OP fails to solve problems: inability to agree; reliance on other, more established methods for strategy, product, supply planning, and finance; failing to support decisions; stakeholders changing job roles; and many more. Behind all these causes is the reality that S&OP is not seen as the place to solve problems. After all, if another initiative became more important or took attention away, it’s because people saw that as the better solution. Properly positioning S&OP as a sustainable, problem-solving method that continuously drives business performance improvement begins with determining the following: FIRST, figure out what problems need to be solved. Likely answers include: the timely approval of supply and demand plans, the identification of risk and opportunity, synchronizing financial and operating plans, agreeing on business drivers, achieving a commitment to communicate on the execution of one set of plans, and the like. SECOND, identify if there are any steps, formal or informal, where problems are addressed outside the S&OP process, or could be within the process. During the course of the month, if an issue arises within the scope of S&OP, does the team use S&OP to address it? Are new processes or technologies being discussed or promoted that actually fit within the S&OP space? The answers to these questions should reveal that team members clearly understand that the S&OP process is the correct place to solve problems. THIRD, determine if S&OP meetings include open discussions where people set aside role and function in order to get things done. Participants should walk out of the meetings feeling that their time was well spent.
- 2. Page2 STRATEGIES AND SOLUTIONS Making S&OP a successful problem-solving tool can be done. Begin by coming up with or updating the core principals of the process for your company. Some fundamental principles include: o S&OP is owned and directed by the senior leaders of product, demand, supply, and finance, as well as the executive leadership. o S&OP is a business planning and execution process. o The reasons why numbers are presented is as important as the numbers themselves [assumptions derived from strategies] o S&OP is a decision-making process. o Perfection is not required, only a focus on improving. o S&OP is the only method for approving the final set of plans to run the business. Also, look at the flow of the meetings, and ask the following questions: o Is there adequate decision support via key performance indicators to flag issues? o Is there an agreed-upon approach to decisions, including supporting analysis? o Do people participate actively? o Do facilitators frame key issues and decisions, or just leave them on a page to be read? o Do facilitators brief functional leaders prior to the executive S&OP meeting? o Are decisions from previous meetings tracked? o Is there a feedback process involving all participants that assesses the value of each S&OP step as it occurs? This evaluation will reveal key areas for improvement and help reinforce the focus on problem solving. Ultimately, it will be possible to create a successful plan for making S&OP efficient and effective. A version of this article was first published by APICS Magazine in Jan 2015. PETER MURRAY IS A S&OP/IBP, DEMAND AND SUPPLY CHAIN PRACTITIONER AND CONSULTANT. HE CAN BE REACHED AT PETER.MURRAYCIRM@OUTLOOK.COM