10 reasons why S&OP process do not perform and decay [2021]

10 reasons why S&OP process do not perform and decay  [2021]

Too often we focus entirely about the S&OP and IBP process design and their rapid implementation but not about the future business process sustainability.

We try hard to pilot the S&OP process and then expand it to the rest of the organization trying to keep the business process harmonized with a coherent global framework and deviations to meet local business needs.

Typical approaches are about keeping the same process steps, a standard RACI framework to confirm who should do what and when and ideally the same outputs at each and every step of the S&OP process from the key account reviews to the S&OP executive meeting.

Unfortunately, in medium to large organizations, its quite common to not have the same business roles everywhere so applying a "one size fits all" standard RACI framework will not work. For instance, if in a theoretical Business Unit A you have an S&OP Director but not in the smaller but fast growing Business Unit B, how do you adapt your global framework without creating too much uncontrolled entropy in your Supply Chain operating model?

Ideally, there is an initial effort in trying to document it (often the work done by internal Subject Matter Experts (SME) or consultants if you are lucky enough to have the resources to use them). But little effort is really put on maintaining process over time. It is not very "sexy" as the business case is usually focused short term link to implementation assuming it will go on forever without extra effort just to maintain it.

S&OP and IBP are very cross functional processes as you know and therefore is very prone to be jeopardized by multiple challenges along the way.

Here are the 10 reasons why S&OP decay over time. (Some are much easier to fix than others!)

  1. Benefits not clear and immediate
  2. Not enough management support
  3. Process too complex and time consuming
  4. Employee leaving the business
  5. Limited skin in the game
  6. Hard and soft skills of the process lead
  7. Waiting for a bug bang planning solution to fix it all
  8. System enablers missing
  9. Limited cross functional relationship
  10. Remote working

These insights were discussed during the the 21st iBsing pioneers with practitioners from different industries investigated the key reasons for the π’…π’†π’„π’‚π’š 𝒐𝒇 𝑺&𝑢𝑷.

The 3 Top tips identified by the group to make your process sustainable arising from the session:

  1. Secure top π’π’†π’‚π’…π’†π’“π’”π’‰π’Šπ’‘ π’Šπ’π’—π’π’π’—π’†π’Žπ’†π’π’•
  2. Clear responsibilities with β€œπ’”π’Œπ’Šπ’ π’Šπ’ 𝒕𝒉𝒆 π’ˆπ’‚π’Žπ’†β€ and empowerment
  3. Simplify and automate the π’π’“π’„π’‰π’†π’”π’•π’“π’‚π’•π’Šπ’π’ of your process

Thanks to Helmut from iBsing for inviting me as a guest speaker for Metronome to share our insights and point of views.

If you want to further strengthen your organisational and collaboration aspects of your S&OP, don't hesitate to contact Helmut Leitner.

Visual produced by iBsing.