Sales and operations planning (S&OP) sits at the center of modern supply chain and logistics businesses, as a critical tool that aligns demand, supply and financial goals into a single, disciplined process, and turns strategy into action.
“I would really advise virtually every supply chain organization to implement S&OP,” says Lori Gipp, the vice president of product management for logistics software provider TransImpact.
The first step on the S&OP journey is ensuring that everyone is aligned, and that there aren’t any gaps in visibility between stakeholders and departments. That starts with ensuring that everyone’s working from a single dataset, allowing everyone to speak in a common language with numbers they all trust.
S&OP most often unravels for two reasons: Persistent mistrust in the underlying data that turns planning into a debate over whose numbers are “right,” and a lack of executive buy-in that leaves teams stuck in analysis paralysis.
Getting everyone on the same page also means ensuring that there are clear, shared expectations when it comes to regularly scheduled check-ins. To do that, it’s important to determine how often everyone’s going to meet, so that the cadence works for everyone’s schedules and workflows.
Once everyone has agreed on data, scheduling and shared goals, the next step is to identify the right KPIs, so that it’s possible to accurately track progress and identify the root causes behind any roadblocks that may crop up along the way.
Keeping S&OP on track ultimately comes down to accountability, not just for hitting targets, but for following through on past decisions, understanding why outcomes diverged from the plan, and creating a culture where teams can review what happened, learn from their mistakes and make better, fact-based decisions the next time around.
