Unraveling the Enigma of Sales and Operations Planning Specters, as Unveiled by The Supply Chain Sleuth!
In a bid to streamline its operations and improve its ability to forecast, plan, schedule, and execute, a global company with two dozen operating facilities employing thousands of employees worldwide embarked on the implementation of a Sales and Operations Planning (S&OP) process.
Despite the new CEO's promise and the hiring of an S&OP expert, the process was still not up and running after a few months. The cause for the slow or halted implementation progress was mainly due to organizational challenges, which often represent the greatest obstacle to effective S&OP implementation. These challenges can limit the potential of the process even when leadership support is present.
One of the key issues was the lack of a formal S&OP process in the company. The Sales team, historically managing all forecasts independently from their individual customers, was not pressuring customers for forecast information. However, this put Operations and Supply Chain teams under pressure, as they struggled to coordinate demand and supply.
To address these issues, education, concerns, accountabilities, and HR concerns were discussed. The new S&OP process was communicated with an edict to be operational within one month. The S&OP expert had a business process and calendar defined and was communicating roles, responsibilities, and timing to all stakeholders.
However, some resistance was encountered. Some Sales people were passively blocking the new S&OP process due to a perceived loss of control and increased accountability. The S&OP expert was aware of office politics and treading lightly with process blockers.
Despite the challenges, the new S&OP process drove a level of common understanding and synchronization unprecedented in the company's history. The Operations teams, in varying states of readiness, received education and hand-holding where necessary. Some teams were providing inputs on time while others were more lackadaisical.
Monthly S&OP meetings were held to address and resolve data or assumptions issues. The meetings, which featured everyone from every facility and function, emphasized teamwork and using one version of the truth. The company's products, which could be shipped to numerous customers or distribution centers anywhere around the world, on an order-by-order basis, saw an increase in the company's ability to execute and be flexible.
Customers also noticed the improvements. They saw a more coordinated and responsive company, capable of meeting their demands and adapting to changes in a timely manner. The ecosystem of suppliers, facilities, customers, carriers, and end customers required a centralized, coordinated S&OP process, and the company was well on its way to providing that.
In conclusion, the implementation of the S&OP process at the global company was not without its challenges. However, with the new CEO's recognition of the need for a formal S&OP process and the hiring of an expert to implement it, the company is well on its way to a more streamlined, efficient, and responsive operation.
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