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The journey for S&OP is a road with many ruts and potholes. In my twenty years of following the progression of S&OP as an analyst, I am amazed at the number of “experts” with so little expertise. For most companies, building a great S&OP process is a missed opportunity. Governance.
In my recent Mea Culpa post, I mentioned my prior work on Sales and Operations Planning (S&OP), and the importance of leadership. Leadership and S&OP? Observations on What It Takes In the Mea Culpa post, I wrote that I used to believe that excellence in S&OP was a ratio of 60/30/10. (60%
Sales & Operations Planning (S&OP) as a process has been around since the 1980’s. While the terminology evolved, the underlying thesis of S&OP has stayed the same, i.e., bridge the divide between sales forecasts and operational plans while respecting the budget.
This week, we will be sharing research from over 90 respondents on Sales and Operations Planning (S&OP). In this report, we find that S&OP processes have grown more complex in scope and governance over the last decade. The average company over 3B$ in annual revenue has four S&OP processes.
It’s not limited to managing crops and livestock, but encompasses all equipment, services, and product processing as well as commercialization. A well-executed S&OP process can go a long way to help organizations rein in some of this complexity. That is, after all, what S&OP (or IBP) is all about.
To align S&OP. As companies transitioned from regional to multi-national organizations, Sales and Operations Planning (S&OP) processes proliferated. The average company has seven S&OP processes, but a global chemical company averages over 30. Businesses are different. Reporting Structure.
I spent time this week completing reference calls on the use of S&OP technologies. Eerily the case studies sound the same as the ones heard when I completed S&OP research in 2004. Eerily the case studies sound the same as the ones heard when I completed S&OP research in 2004. What am I hearing?
To align S&OP. As companies transitioned from regional to multi-national organizations, Sales and Operations Planning (S&OP) processes proliferated. Today, the average company has seven S&OP processes, but a global chemical company averages over 30. Each defining S&OP differently.
I wrote my first report on Sales and Operations Planning (S&OP) while sitting on the floor in the Atlanta airport in 2005 when I was an AMR Research analyst. The model in Figure 1 became the foundational model for the Gartner S&OP model. Sales and Operations Maturity Model from 2005-2008. Figures 2 and 3.
I will also pen my 95th report for this week’s Supply Chain Insight’s newsletter. It is one that is often asked: “S&OP How Do I Get Started?” ” S&OP: How Do I Get Started? I asked, “Why is S&OP important to your business?”
It’s not limited to managing crops and livestock, but encompasses all equipment, services, and product processing as well as commercialization. A well-executed S&OP process can go a long way to help organizations rein in some of this complexity. That is, after all, what S&OP (or IBP) is all about.
This turbulence sends ripples through their sales and operations planning (S&OP) process, adding complex layers and challenging the essence of effective decision-making. As these factors become increasingly prevalent, S&OP — the vital nerve center of an organization’s supply chain strategy — is being stretched thin.
Puricelli A few weeks ago, I launched a new blog series on sales and operations planning (S&OP ). To make sure everyone is on the same page, I want to review the basics, the foundation, which is… what exactly is S&OP? S&OP is so much more than a process or a meeting.
Kinaxis recently asked me to author a blog series on the topic of Sales and Operations Planning (S&OP). In addition, prior to becoming a consultant, I was a practitioner in industry, managing S&OP processes. How can organizations better use S&OP? What is S&OP? by Steven J.
The global supply chain is built on three assumptions: rational government policy, availability of reasonably priced logistics, and low variability. S&OP is too slow and cannot achieve the needed alignment. Over four-hundred days of war in Ukraine. Growing tensions between China and trading partners. Unrest in Sudan.
As a formal process they may not be operating to S&OP norms but if they are getting their products onto shelves then some form of S&OP must be in place. This leads me to a frequent problem with S&OP – the name, not the process.
Is it identical to sales and operations Planning (S&OP), an extension of it, or something altogether separate? Call it what you want, IBP is probably best thought of as mature S&OP. 2) Poor or Non-Existent Data Governance. What is the goal of your S&OP process? A GPS for your business?
In addition to industry, logistics and retail, a third element is needed in this complex equation: the government. It’s also necessary to think ahead. Any resemblance to S&OP and S&OE is no coincidence. Many other executives are working now with this bias. Systemic and Holistic View.
Local/Global Governance. Clear governance of global planning and local decisions. Sales & Operations Planning (S&OP). Planning data is often debated and participation in S&OP decisions is often ad hoc. The process is not balanced between the “S” and the “OP.”. Little clarity.
Do Set Clear KPIs and Governance Structures : Establish transparent metrics for sales, coverage, and service levels. Do Invest in Distributor Capability Building : Provide training, digital tools, and performance incentives. A well-equipped distributor is an extension of your brand and a key to market penetration.
What’s on the horizon for supply chain professionals? Governments are also relying on AIMMS-based tools to assess the costs and benefits of renewable energy subsidies. Supporting S&OP with prescriptive analytics . 2020 seemed a world away just a few years ago and yet, here we are.
S&OP Is Over-Played. Sales and Operations Planning (S&OP) is no panacea for the lack of clarity of an operating strategy or the absence of product flow design. A manufacturing company’s safety stock is 30-40% of the total inventory requirement. I could go on and on, but let’s leave it here.
Nevertheless, a little-known Chinese artificial intelligence start-up named DeepSeek did just that and overnight became one of the world’s most famous companies. ” DeepSeek’s strategy seems to be working. 6] Jinhan Li, “ What questions will China’s DeepSeek not answer? in the A.I.
A lemming’s population rises and falls. In this blog post, I share quantitative research, mixed with stories, of Sales and Operations Planning (S&OP). Let’s face it folks, we have acted as lemmings over the last decade when it comes to S&OP. Effective S&OP takes work.
To entice you to participate let’s look at the data more closely. These gaps cannot be closed by a simple focus on S&OP or the implementation of a technology. As organizations became more global, the need for clear governance and supply chain excellence definitions grew, and few companies filled this gap.
However, the lag in the Sales and Operations Planning (S&OP) cycle exacerbates issues like inaccurate forecasting, reduced agility, higher error rates, increased costs, limited scenario planning, and sustainability challenges, ultimately undermining supply chain performance and eroding executive confidence in the supply chain as a value driver.
Yet, few have a sales and operations planning (S&OP) process, as well as the reporting tools and integrated, coordinated network of partners, that’s comprehensive and responsive enough to keep up. Access to publicly available environmental, social, and governance (ESG) information can be leveraged throughout the planning process.
Reward functional behavior with less clarity on governance. Focus on tight integration of the budget to supply chain flows in S&OP. ” The assumption that traditional demand planning focused on order patterns or the use of S&OP to understand demand is insufficient. Driving process innovation agendas.
There is a lot of evidence that S&OP is hard to implement and get right. And when S&OP is implemented it often stalls, doesn’t make enough progress and doesn’t deliver enough value. Maybe at the start of the S&OP project executives buy in and employees are still eager.
In 2012, I published an article on Sales and Operations Technology (S&OP) Maturity. (I At the time, one of the people (let’s call him Noel) that I great respect for in the industry called me to say, “Lora, I don’t get it. Let’s start with a definition of concurrency.
Mary Barra, GM’s CEO, announced a partnership for the development of a 125 mile long corridor of Intelligent and Connected Infrastructure in collaboration with academia, government and industry. Umberto Eco writes that “Any fact becomes important when it’s connected to another.” What do you think?
Even if you’ve implemented the most sophisticated process and technology for your S&OP process, there’s a hard truth you need to hear: a supply chain not designed to be in tune with the rapid market shifts will leave your best-laid plans exposed and make them unreliable. To read the full article, click HERE.
An S&OP implementation requires many changes, not the least behavioural change. However, there are different behavioural change requirements during S&OP maturity stages. In four posts, four coaching phases will be explained to support leaders with behavioural change in different S&OP maturity phases.
The podcast provides valuable insights from both shipper and logistics service provider perspectives, and highlights the solutions offered by Meta Ops and Meta Experts in solving complex supply chain challenges. Discover how Meta Ops and Meta Experts provide top talent solutions for tangible goods-oriented organizations.
S&OP has the potential to transform an organisation. S&OP can do more than create a rolling forecast, contribute to improved strategy execution and company performance. Once S&OP is influencing company culture for the better and achieves these type of employee benefits, I consider S&OP transformational.
PREVIEW In their three-part Foresight series entitled “Misconceptions, Missteps, and Bad Practices in S&OP,” ( Foresight issues 46, 47, 48) Chris Gray and John Dougherty expose a baker’s dozen of blunders blocking the road to an effective S&OP process. . S&OP Is the New Name for ERP.
Early challenges to IBP included a lack of an accepted academic definition, the absence of a governing body and a bias toward supply chain applications. But research suggests the most widespread and stinging criticism of IBP was that it was just mature Sales & Operations Planning (S&OP) by any other name.
Conflicts, government policy changes, regulatory changes and coups can mean that supply is suddenly turned off or that a market is no longer available. We saw this type of issue over the past several years with the Japan earthquake / Tsunami in and with the Thailand floods. Political issues can also have a significant impact on supply.
In the last 30 years S&OP improved performance in many businesses. However, S&OP has not yet substantially delivered on its ultimate promise of enterprise wide resource management, rolling financial forecasting and strategy deployment. Worse, overall S&OP development and progress seems to have stalled.
S&OP can be seen as a provider to a business and its employees. To reach S&OP excellence is a long journey, sometimes estimated at minimal 10 years, and we need leadership and employee engagement and support along the way. Value creating S&OP coaching phases.
Importance Versus Effectiveness of Demand and S&OP Planning Solutions. The third issue is the lack of understanding that global processes–to maximize the economies of scale in transportation and material buying–need strong governance. Build a planning governance model based on a format like shown in Figure 2.
What’s on the horizon for supply chain professionals? Governments are also relying on AIMMS-based tools to assess the costs and benefits of renewable energy subsidies. Supporting S&OP with prescriptive analytics . 2020 seemed a world away just a few years ago and yet, here we are. Sustainability on the agenda.
Your supply chain and S&OP process isn’t immune to the impacts. It’s a common mantra among businesses these days, driven by the digital revolution and all that entails. It’s changing the way the world works, and how we as consumers interact with it. You just need to draw them out, guide them and foster them.
Traditionally, planning processes are designed to serve specific time horizons – Sales & Operations Execution (S&OE) for short term horizon, Sales & Operations Planning (S&OP) for the mid-term horizon and Integrated Business Planning (IBP) for long term strategic horizon.
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