Contribution by Somtirtha Das, Assistant Manager at Bristlecone
The market has been through an extended period of upheaval, which has left it volatile. The aftermath of this turmoil makes investors as well as business owners anxious. Sales & Operation Planning (S&OP) has emerged as a popular solution for businesses that are looking to minimize their risks and devise an operations strategy that yields favorable results. S&OP can greatly boost the visibility and instill better business relation within the enterprise. At the Las Vegas S&OP Conference that was organized by the IE Group this year, the interest shown by industry leaders in S&OP can be easily gauged from the volume of the audience who made it to the event. Subsequent events have also generated similar buzz in the industry, and S&OP has emerged as a very real and a viable approach for gearing up the business towards greater revenue generation.
An emerging trend among supply chain vendors has been to headhunt senior executives who have orchestrated change at an organizational level and implemented S&OP for their former employers, and thus possess the skills as well as the experience necessary to perform a similar feat for their new employers. The need for such a move on a vendor’s part arises because of the heavy repercussions of not deploying the S&OP in a correct manner. The sheer investment and the training aspects of the entire process are a logistical nightmare, and only a professional who has a well defined outline of the entire process already in their head can ensure the successful completion of such an endeavor.
The need for organizational change supersedes all other requirements that a company might encounter in their quest for enterprise wide S&OP deployment. The very fact that S&OP has a direct impact on demand forecasts, resource management, and labor utilization makes it a powerful tool for radically improving the reliability as well as performance of the supply chain.
An unconventional approach is required for a successful and rapid implementation of S&OP at an organizational level. This whole process is made even more complex by the fact that there is no defined point at which the implementation of S&OP is deemed completed. It is a gradual and ongoing process that a supply chain vendor will consistently have to work on and optimize in order to adapt to the volatile markets, the evolving business relationships that all growing companies end up forging, and the industry in itself which keeps pushing the boundaries for what is considered standard.
People often are hesitant in pushing forward and questioning what is acceptable and what is attainable. Limiting your options even before you have had a chance to find out for yourself what the limitations actually are is a common reason why S&OP does not yield expected results for many organizations. S&OP needs to be implemented not because the present market scenario will be easier to navigate, but because the organization will be better prepared for major future events. Limiting the process to what is foreseeable defeats the purpose, and thus must be avoided. The inherent inertia that causes this attitude needs to be tackled directly, and organizational change is the key to that.
Changing the mindset of an entire organization and radically altering the established way of doing things will certainly not be an easy task, or even possible to achieve overnight. Consistent and persistent effort, guided by an expert who has the entire roadmap clear ahead of them is the best way to ensure the success of this effort. The need for every single department and organization within the enterprise to collaborate with each other and work in tandem is essential if the implementation of S&OP throughout the company is to be fruitful.