What is Executive Management’s role in the S&OP process? First of all, the Executive Manager (EM) is part of the Roles and Responsibilities of S&OP. The Executive Management is tasked with making sure your organization meets its strategic objectives. S&OP provides a structured, disciplined approach. It also allows the daily execution of business decision making and tasks in a way that supports strategic objectives.
Reporting Relationships that Support S&OP Cross-Functional Collaboration
EMs need to be savvy about creating job descriptions that include a requirement for cross-functional cooperation and support.
In order to ensure the efficiency of the S&OP process, EMs can create an organizational chart that facilitates nurturing multi-functional relationships. This helps ensure that the S&OP process is fully supported throughout the entire organization.
S&OP Uses a Single Source of Data Providing Unbiased Performance Analysis
For each division in a company, EM’s role in the S&OP process includes developing critical performance objectives, balancing the needs of multiple departments and analyzing performance. Obtaining an “apples to apples” comparison can be difficult unless each department uses one data’s source and a common terminology. Adopting a structured S&OP process ensures that your organization will have standardized performance reports that promote organizational transparency. Furthermore, this is a much easier process. Rather than having the EM team try to integrate disparate reports from each division at the end of reporting periods; they already have a cohesive performance analysis.
S&OP Helps Eliminate Underperformance
Plan deviations will occur including financial and operational plans. Sometimes a department may not meet their performance targets. The S&OP plan provides transparency regarding performance metrics. Each month the organization will be able to assess the root causes for underperformance. In addition, it will develop preventative actions to eliminate recurrence of the same problem.
S&OP Provides Enhanced Organizational Accountability
A successful S&OP plan flawlessly gets all team members working together. Working collectively helps the team achieve a common set of goals. If underperformance occurs, cross-functional teams will have a common framework to assess where any breakdowns may have happened. On at least a monthly basis, your team will have a chance to come together and assess how to make corrective actions. As a result, it will improve collective performance relative to the S&OP plan. This has the dual benefit of helping the organization achieve its goals and also improving working relationships among multi-functional teams.
Improving Resource Allocation Decisions
Managing corporate growth requires an astute use of corporate resources. Determining how much money to invest in new product development, capital improvements and personnel training are just a few of the decisions that Executive Management must make. The performance clarity provided by the S&OP plan removes ambiguity regarding performance targets.
Finally, the regular sharing of market intelligence by Sales and Marketing personnel facilitates Executive Management’s role in the S&OP process and provides a strong glimpse into the competitive landscape. This unbiased information helps EMs improve decision making that will increase corporate profitability.
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