Posts categorized as 'Sales and operations planning (S&OP)'

Goodbye scheduled decision-making, hello concurrent planning

AlexaCheater

Sales and operations planningThe face of sales and operations planning (S&OP) is changing. Gone are the days when sequential, isolated planning and monthly meetings based on out-of-date data are sufficient to drive stability and success.

End-to-end initiatives now span beyond the confines of a single company’s supply chain, encompassing extended supplier and customer value networks, as well. Digitization, sparked by the rise of the Internet of Things (IoT), the expanding number of connected devices and big data, is driving a shift in consumerism. Your company needs to keep pace, or risk falling behind forever.

The reality is, supply and demand waits for no one — not even your executive team.

Running a profitable global business requires speed and agility in both strategic and
tactical planning. But transitioning to a new way of looking at S&OP means saying goodbye to scheduled decision-making, a frightening thought for many. It may seem like an impossible step. How can you let go of the security of regular meetings planned weeks in advance? Or the safety of knowing those big decisions only come around once a month?

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[Video] TE Connectivity – A continuous sales and operations planning process

MelissaClow

This blog is part of a video interview series. Check out the video below as well as links to other supply chain practitioner and Kinaxis executive interviews.

The task of linking sales and operations planning systems of any company with truly global reach is difficult enough to begin with, says Lindsey Kathmann, supply chain analyst at TE Connectivity. But complexity is heightened when the enterprise is structured into separate business units, some with their own spinoffs.

That’s the situation faced by TE Connectivity, which specializes in designing sensors for several industries. It’s divided into Transportation Solutions, which focuses on cars, planes and trains; Aerospace, Defense & Marine; and Industrial, which specializes in consumer products, such as cell phones.

TE Connectivity: Continuous sales and operations planning process

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Kinaxis Positioned in the Leaders Quadrant of Gartner’s Magic Quadrant for Sales and Operations Planning System of Differentiation

MelissaClow

Gartner S&OP SOD Magic QuadrantIt is with great pride that we announce Kinaxis® has been placed in the Leaders quadrant of the recently published Gartner Magic Quadrant for Sales and Operations Planning Systems of Differentiation.

Gartner defines a sales and operations planning (S&OP) System of Differentiation (SOD) as a software solution that supports a Stage 4 or higher maturity S&OP process. According to the report, “Leaders have a strong vision for their S&OP SOD capabilities. They recognize the role they will need to play in enabling the move toward multienterprise horizontal planning allied with vertical integration that links strategy to operations and execution. They are looking at developing analytics to support probability-focused end-to-end predictive and prescriptive analytics to support profitability trade-offs and supply chain design and configuration capability.”1

Because of our unique ability to provide concurrent planning, Kinaxis RapidResponse® is an ideal solution to take companies through the various stages of S&OP maturity. We believe the next revolution in supply chain performance can only be achieved by realizing the speed of cross-functional decision making. As today’s press release indicated, our goal is to advance our customers’ S&OP processes from early stages through to Stage 4, and beyond, over time by taking advantage of all full capabilities in our single product.

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Is S&OP an expensive band aid?

Dr. MadhavDurbha

S&OPI love talking to customers and prospects! Each of these interactions provide me with an opportunity to meet someone new, learn about their business, their challenges, dreams, and aspirations. The topic that often comes up in these conversations is Sales & Operations Planning (S&OP). While S&OP as a discipline has been around for over two decades, it has been generating great interest recently. As much interest as it has generated, based on my conversations, the results from S&OP efforts have been mixed at best. From time to time, I hear comments such as:

  • “My monthly S&OP process takes 6 weeks to execute”
  • “We have this massive excel sheet into which we load all our S&OP data to generate the reports for review. The process to gather the data is time consuming and by the time we present our S&OP to our leadership, the world has moved on and our plans are no longer valid”
  • “We started S&OP as our COO insisted we do it. It is turning out to be a report to him, rather than a tool to run our business”

In fact, this has been such a recurring theme that I decided to share my point of view in this blog. Let me elaborate on what I believe are the reasons behind this disillusionment.

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What is the Operating Model for S&OP? by Accenture Strategy Guest Blogger

Steven J.Puricelli

Last month, I launched a new blog series on sales and operations planning (S&OP). I outlined a number of important topics I plan to explore this summer. Building upon my post about the ownership of S&OP, it’s time to talk about defining the operating model for S&OP. Executives frequently ask: “How should I structure S&OP and organize it to account for different divisions, brands, or geographies”?

One of the more difficult aspects to get right behind a good S&OP process is the underlying structural design…or what I call the operating model. Most S&OP teams are tasked with managing an extensive and complex web of functional departments, sub-processes, products, customers, brands and geographies. A foundational framework that creates the appropriate intersections and touchpoints is imperative for S&OP to function effectively. When I reflect on leading S&OP processes, two key foundational aspects are always present: 1) a well understood conceptual model and 2) a well-defined structural model. They help define the operating model for S&OP.

Conceptual Model
The purpose of the S&OP process, which I discussed in my second blog, is to enable cross-functional information sharing, trade-off analysis, and decision making for the supply chain and overall business. The S&OP process is a broker of information…or to use one of today’s common supply chain buzzwords, a ‘control tower’. A recent Accenture article describes the importance of eliminating the disconnect between sales and supply chain, which is what a proper S&OP operating model seeks to create. This part of the S&OP operating model is as much a cultural mindset as it is something that gets defined by tangible organization charts or team diagrams. High performing S&OP processes do a tremendous job sharing information efficiently across the organization using a hub and spoke model as shown in the figure below…there’s incredible communication and alignment.

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Who owns S&OP? By Accenture Strategy Guest Blogger

Steven J.Puricelli

Last month, I launched a new blog series on sales and operations planning (S&OP). In that introductory post, I outlined a number of important topics that I plan to explore throughout the summer. Building upon the last post about foundational elements behind S&OP, I want to consider a question I get all the time from executives: “who really owns, or should own S&OP”? More broadly speaking, it is important to share some leading practices on the organizational aspects of S&OP that includes three components: 1) proper composition of the team, 2) ownership and who leads the team, and 3) how the team performs effectively.

Team Composition

S&OP is a team sport – period. S&OP is arguably one of the most cross-functional processes in an organization and requires input from sales, marketing, finance, supply chain, manufacturing and so on. Some of the best S&OP processes include great cross-functional participation and engagement (the latter being much more critical) from across the organization. When it comes to S&OP, the composition of the team I typically see, in some shape or form, at leading organizations is as follows:

SOP Team Composition

In concept, this team diagram should make sense and be logical to most people, but in practice, oftentimes a number of these functions are either under-represented or missing entirely. Getting the right engagement from the organization requires a few things. First, leadership from the top-down communicating about the importance of S&OP to the business and its priority to the executive team is critical. Second, when I said S&OP is a team sport, I didn’t mean a spectator sport. A well performing S&OP process requires active involvement and contribution to the team, which means engaging in the process and performing the necessary activities and inputs. Finally, in exchange for the inputs and active participation in the process, it’s only fair to return the favor and provide valuable outputs to the team members. After all, most of the team members in the diagram above have day jobs to worry about, so to encourage sales or marketing professionals to engage and provide inputs into the process, make sure some of the outputs create value for them. Keep in mind the WIFMs (what’s in it for me) for the team, it will help with the engagement.

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What is S&OP? By Accenture Strategy Guest Blogger

Steven J.Puricelli

S&OPA few weeks ago, I launched a new blog series on sales and operations planning (S&OP). In that introductory post, I outlined a number of important topics that I plan to explore in more detail throughout the summer. To make sure everyone is on the same page, I want to review the basics, the foundation, which is… what exactly is S&OP? I’ve seen and heard so many different answers and perspectives in response to this question. Therefore, I think it is important to share what I feel are some leading practices and also how leading organizations think about S&OP.

First of all, S&OP is indeed a process by most academic definitions (Merriam-Webster Link), as it follows a series of steps and activities with a particular cycle or cadence. And there are certainly meetings that occur throughout the process, but S&OP is not a meeting. S&OP is so much more than a process or a meeting. Yes, I’ve seen organizations that think they are ‘doing S&OP’ because they have a monthly meeting, but in fact they are actually missing the point of S&OP.

If one thinks about the purpose of S&OP, it is to ultimately match supply and demand, while balancing the cost (supply) and service (demand) tradeoffs of the supply chain. But as most of us know, addressing or solving this tradeoff is not linear in any way. Organizations face a recurring flow of supply chain imbalances that require decisions. S&OP serves to guide that decision making across the organization, making sure everyone is well informed and that trade-offs are analyzed and addressed properly. As a result, S&OP can be thought of more as an operating model to help organizations make better business decisions.

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S&OP Summer Reading Series by Accenture Strategy Guest Blogger

Steven J.Puricelli

S&OP Summer Reading Series

Kinaxis recently asked me to author a blog series on the topic of Sales and Operations Planning (S&OP). Naturally, I was flattered to be asked to contribute to their popular 21st Century Supply Chain blog. But I was also very excited, because as a strategy consultant at Accenture, I’m able to share a wide range of client experiences on ‘what good looks like’ and what business issues clients are facing across a wide range of industries. In addition, prior to becoming a consultant, I was a practitioner in industry, managing S&OP processes. That gives me a unique appreciation of the challenges organizations face, and what it’s actually like to be part of an S&OP team.

I’ve designed this series to focus on the most common or frequently asked questions I hear from my clients. In this first posting, I will provide an overview of the six key areas I plan to talk about in my blogs. Going forward, I will dive into the details around each of these areas, share examples, and highlight options you may want to consider in your organization. I look forward to sharing my thoughts with you and hope you’ll include this blog on your summer reading list. I also hope we can engage in an exciting dialogue on the topic of S&OP and how we can work to improve your organization’s performance and outcomes.

How can organizations better use S&OP?

I’m often asked as I travel around the country working with various organizations, irrespective of the industry: “What are the most common S&OP challenges facing organizations today and why isn’t our process working?” Many of the organizations are struggling with the long-standing dilemma of effectively balancing customer service with supply chain costs, yet all have some form or shape of an S&OP process in place. So what’s going on? Why is this happening? I get asked these questions all the time. And candidly, I see it all the time too in my everyday personal life… stock outs, backorders, inventory markdowns, and clearance sales. These symptoms all point to a failure or breakdown in an organization’s S&OP process. So, how can organizations better use S&OP to improve their agility and responsiveness to today’s dynamic markets?

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