The S&OP (sales and operations planning) process is vital to modern business efficiency and performance, but it has limitations due to its broad scope, the multiple teams involved, and its monthly (or even bimonthly) cadence. Many businesses waste time and resources unnecessarily at the point of execution of the approved sales and operations plan, as changes become necessary or unforeseen problems arise. Integrating a robust, data-informed sales and operations execution (S&OE) process into a broader S&OP strategy allows businesses to more effectively react and adapt to rapid changes or disruptions, while maintaining the high-level S&OP perspective necessary for overall success.
The S&OP process is vital for today’s businesses, whether it’s couched as sales and ops planning as such, or whether its components are integrated into a more holistic integrated business planning (IBP) process. However, one of its limitations is that the multiple factors, teams, and processes involved can make it difficult to respond to sudden disruptions and modify “the plan.” While the typical S&OP process includes a “review and reconciliation” step, this is essentially intended as a “meeting before the meeting” for non-executive teams and leaders to prepare and come to a consensus of the recommended plan that will be presented to the full group during the final S&OP meeting. While any disruptions that have come to light during the period since the beginning of the current S&OP cycle might be discussed, the broad, multi-faceted nature of the S&OP process doesn’t effectively allow for last-minute adjustments or changes in many cases, and businesses are often left to spend resources and time putting out fires and doing damage control, rather than proactively pivoting or adjusting the plan in time to meet these challenges.
A recent Gartner survey showed that only 45% of respondents agreed their plans allow them to stay aligned with strategic goals even during disruptions. Today’s volatile, fast-moving business environment often makes it difficult for organizations’ execution to remain aligned with established sales and operations plans when disruptions inevitably occur. Adding a more adaptable, granular (and more frequent) S&OE process can improve multiple KPIs all along the supply chain.
If we look at the steps in the S&OE process, we can see where there are multiple opportunities for identifying and responding to sudden changes in the market or supply chain disruptions. The general steps of S&OE include:
Since S&OE meetings generally occur weekly (and emergency meetings can certainly be called more frequently when needed), integrating S&OE into a broader, monthly S&OP process allows much more effective and accurate planning and execution in an increasingly global supply chain with diverse types of disruptions.
Even in the absence of large market shifts or global disruptions, weekly S&OE meetings provide a means for team members to assess whether the previously established plan still lines up with current conditions or data. Where any deviation is noted, team leads can notify company leadership where appropriate, make adjustments to forecasts, develop plans for addressing any gaps, and execute those plans effectively.
Ultimately, S&OP’s focus is at a brand, market, and/or business level, and at a time horizon from one, three, or even 18 months out. These big-picture concepts are necessary and facilitate large shifts in priorities or even adjustments to an organization’s mission or business model when sea-changes in industries occur. However, there’s also tremendous value in S&OE’s more granular, specific focus, which may be as narrow as the customer or even one specific SKU. Effective S&OE allows for short-term operational adjustments and decision-making within a larger, longer-term S&OP strategy.
For those looking for an all-in-one S&OE, S&OP, and/or IBP solution powered by real-time data, ORI provides a true enterprise solution that fully integrates reports and analytics, business scorecards, process facilitation, collaboration, and assessment criteria into one single, streamlined application that can support a multi-division environment where appropriate. ORI has expertise in every major industry, including automotive products, chemicals, consumer goods, cosmetics, electronics, food & beverage, frozen foods, glass manufacturing, health care, logistics & distribution, and paper goods. Our consultants have delivered more advanced S&OP implementations than any other consulting group. Written case studies have shown median improvements of 34% in profit improvement, 25% gains in productivity, 3% growth in revenue, 14% reduction in inventory, 8% lower costs, and 9% greater volume. Let ORI know what we can do for you.
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