Diary of Supply Chain Consultant
Now that COVID-19 conditions have allowed businesses to get back to normal, I’ve started working with a few different clients in the automotive and aerospace industry. It wasn’t a surprise that all of them had one priority focus: S&OP Implementation.
This is understandable, last year’s challenges and with the uncertainty and variability that exists in global markets today, the need for a well-functioning Sales & Operations Planning process is greater now than ever.
By working with these clients, I see common themes in their challenges: not understanding or having limited visibility in their demand signal, workforce’s that are close to retiring, new programmes with significant growth, and in automotive when the semi-conductor supply chain recovers, having the ability to catch up as fast as the OEM’s.
S&OP can help solve these challenges and like any new process implementation there are some key learnings that can be considered to create the foundation to pulling off a successful S&OP implementation and more importantly, making the process sustainable.
1. Target your S&OP Learning per audience: Every Organisation will have the experience that training doesn’t always deliver robust processes or results. Why is that? The reason is that most company’s take S&OP education as a blanket and train everyone from executives, process owners to process supporters. Aiming the message to an audience is key, targeting content of training to your audience will allow you to deliver the right message, and to ultimately deliver the targeted results. I have used only a handful of slides with my clients. Instead, I focus on engagement through building a process structure that aids structured learning by matching the client’s business needs. Much of the learning is delivered on the job, sitting with learners at their workplace with key teachpoints.
2. Manage the change: S&OP when implemented in an organisation it is not just about a process, it is about a new way of doing business. When educating client leaders, S&OP awareness is baked into a change management activity and this creates team collaboration, a key benefit of S&OP for any organisation. I spend time with each stakeholder to understand their hopes and fears, and how they will potentially react to the change. Influencing stakeholders is critical for the implementation to be successful. I spend as much time as necessary to ensure stakeholders are engaged. This approach has been hugely successful with clients, and the level of engagement is high, which increases the momentum during implementation.
3. Set a Clear Expectation for S&OP goals: It’s really important to understand what S&OP will be able to deliver, it can’t be seen as a “silver bullet” that will magically fix all your business issues, however there has to be a real business urgency/gap that S&OP will fix. Therefore is key to define the end state, scope, and desired impact and results for your business. Of my current clients, some of them have significant challenges in the next 3 months, and upto the start of the S&OP implementation, the supply chain did not have visibility, now they can plan for the future. All Automotive suppliers will have a challenge when the semi-conductor supply issue is resolved. OEMs will catchback their arrears faster than the supply base. S&OP is a process that enables clear visibility, and makes decision on what needs to happen to ensure cost efficient supply during this future challenge. For my clients having visibility of what is coming at a detailed level is enlightening and allows them time to make contingency plans.
4. Set a cadence and stick with it: Plan the work and work the plan! Set calendar dates and block the time. Stick to the dates, set agendas and stick with the process. It will be clunky at the beginning, but it’s ok, the critical thing is to start S&OP and keep the momentum going. An implementation process that stagnates is very difficult to recover. The discipline of all stakeholders is vital to a successful implementation and to achieve a time when the process is self-sustaining. Several of my clients are now creating robust financial forecasts out for the next 3~4 years only 6 months after starting their S&OP journey.
5. Start with what you know: Design a process that suits your business, not what you think the process should be. The start of the S&OP process for a lot of companies is often done with very limited data. As the team starts the conversations and collaboration process it will become more clear what information is needed and how to get it. You will be surprised by how quickly the meetings develop and information becomes clearer. I do not give my clients any standard templates, I build templates with them that suits their business and its current state. Every S&OP cycle creates a need for more information in a different way. This is normal for any S&OP implementation and it should not be constrained, as it allows the stakeholders to learn and develop.
6. Explore the process : Supporting the S&OP implementation is a facilitative role, and relies on coaching skills to ensure stakeholders have an open mind, and can be continually curious. S&OP matures each month, and the facilitator role is that I encourage stakeholders to contribute and try new ways to achieve their goals, whilst ensuring they are sticking to the S&OP principles. This has given my client the freedom to develop S&OP as a key business process in their organisations.
7. Refine the process: As with any process continuous improvement is vital to increasing the maturity of the S&OP process. I bake this into the agenda for every S&OP review, so that it becomes a focal point for the teams. Encouraging them to be innovative helps my clients to engage with the S&OP process. There is no such thing as a bad idea and no such thing as a stupid question; these principles should be a key part of any S&OP process team.
Contact me if you want to learn more.
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