I read the white paper ‘Enabling Sales and Operations Planning with RapidResponse’ with interest. Organizational thinking is often inherently bound by the dimensions of the ‘box’ it is currently in because people don’t question working assumptions strongly enough. It takes a lot of energy and political skills to overcome ‘process inertia’ built up over the years within companies especially when the processes involve cross-functional teams and individuals at different levels of the organization. Popular business press and sales and operations planning (S&OP) consultants will tend to advocate what has worked in the past (i.e. conventional tools and processes). Taken together, this results in organizations likely short-changing themselves when investing in S&OP.

Personally, I’ve found that investment in S&OP is intermittent in many organizations. Interest in S&OP gets hot when a crisis occurs (e.g. the recent housing market collapse) because the organization understands that fundamental changes are occurring and S&OP is a tool to help them ‘get out of this mess’. The result of this is that companies often don’t move cleanly from one stage in the maturity model to another.  They can attain different levels of maturity in different areas and may even fall back because of a change in technology (i.e. the new demand planning system does not talk to the supply planning application) or personnel (i.e. ‘our new CEO doesn’t like to work that way’). S&OP, like any other strategic and tactical planning, takes constant investment and buy-in from senior levels.

I don’t believe that all organizations need to plan more often than monthly. A monthly cycle might be fine for organizations that have slow product turnover and a mature market. I think the key requirement is to be able plan when, and as often as needed; this is, S&OP ‘on-demand’. Recently, I talked to a company that manufactures residential light fixtures. Historically, a monthly S&OP cycle has served them quite well. However, the recent housing market downturn required that they re-evaluate their S&OP five times in two months. Also, many companies are ‘big-deal’ driven. So, what happens when one of those big deals comes in the day after the end of the last S&OP cycle?  They key is that the S&OP process shouldn’t be held back by the technology and this is where many organizations need to make sure they do their homework.

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Tags: On-demand (SaaS), Sales and operations planning (S&OP)
Posted in Sales and operations planning (S&OP)
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