The word “simple” rarely comes to mind when most supply chain professionals think about their sales and operations planning (S&OP) process. But if you take a basic approach and don’t get caught in the weeds, you really can keep it simple, stupid (KISS).
For the purposes of this blog post, we are looking at the high-level S&OP process and we acknowledge that there is not one “right” way to run your S&OP process. With that in mind, start with the most basic essentials: you need a demand planning component, a supply chain planning component, a financial consolidation and analysis of what all the latest information represents, and finally an executive review.
If you focus on these four components, your S&OP process becomes much easier to build around. You can then take a deeper dive into the business to identify exceptions that will occur inside the process and begin to establish a proper flow for how to handle these exceptions.
While there can be numerous other components that may get added to your overall S&OP process, here are a few things that will keep the flow running smooth and simple:
- Each component should have a defined set of business rules.
- Keep a consistent schedule of each S&OP cycle and book the meetings a year out when possible—this is so stakeholders can plan it into their calendars.
- Keep a set agenda for each type of meeting in the process by using a template where specific topics for individual meetings can be discussed under one of the generalized sections.
- Send out meeting minutes after the meeting has ended, by the end of the business day or early the next business day is best.
- Send out a detailed agenda and any presentations at least a day before the meeting. If there are any major topics for the meeting that may cause problems or concerns, it’s a good idea to speak to those stakeholders before the meeting so they can come prepared and hopefully deter unnecessary confusion and finger pointing.
- If there is an action item in the meeting, make sure someone is actually assigned responsibility with due dates.
- Keep strict deadlines throughout the process. One of the big takeaways when starting up your S&OP process is the ability to quickly identify the gaps throughout the business. When a deadline is missed, the executive team or managers need to see that there may be an issue and they need to find the gaps causing the issue and fix them. This goes back to not getting caught in the weeds—there is a simple way to handle the little issues without letting it create more problems in the S&OP process.
- When you implement a strict process, make sure everyone is educated on it and understands how it works. Handling exceptions to the process is where chaos often ensues so it’s important to include an exception management process where applicable. Keep meetings short and organized by following an agenda, to avoid the headaches of getting off topic (which always lead to bigger problems). If all else fails, take a step back and reevaluate how your process is running, and if something seems useless and time consuming, find out its reason for being there, it may not be needed.
Want to discover more about making your S&OP simple, streamlined, and accurate? Join us for a free webinar on DemandCaster Sales and Operations Planning (S&OP) to learn how to balance supply and demand in your enterprise.
For more information on how S&OP balances growth, cost, inventory and customer service levels for your manufacturing enterprise, download the datasheet: Sales and Operations Planning.