The Sales & Operations Planning (S&OP) process has been discussed forever. Discussions on S&OP discussions have been discussed forever.
But is it really that complicated?
Maybe the confusion comes from well…all this discussion.
All the cutting edge academic papers, enterprise software, and consulting support hold value of course. But maybe for most of us in the trenches, all we need is a simpler approach.
We’ve led planning for multi-billion dollar supply chains using some pretty basic tools: Excel and PowerPoint.
We’ve found that keeping to a few simple principles consistently beats all of them.
1. Use Simple Messages
Use the third grade test. Write so a third grader can understand you. This is not about showing your stakeholders the following:
Write so a third grader can understand you.
- your raw quantitative skills
- your elaborate 100-step planning process
- all the new software you’ve purchased
The benefits of above will naturally come out over time in the course of doing solid work.
In addition to simplifying the messages, your other goal is to clearly state what action you want your audience to take. We like 3-5 fairly significant actions. If you track more, you end up including actions that should really be done in the course of your day-to-day interactions.
These actions ideally need to move the process forward. Try to avoid actions that are administrative based. For example, you don’t need to include an action of “contact Paul regarding new forecast”. Note it to yourself and just do it.
Don’t waste the audience you have. Focus them on decisions that cannot be made without a larger group.
2. Involve People
We remove the burden of deciphering the data from our stakeholders. Instead, when choosing data to show, we ask one question: “Why should they care?”
Instead, when choosing data to show, we ask one question: “Why should they care?”
Maybe it’s because a stockout is anticipated (that’s a usual seller). Or it could be because some investment is required to support the sales plan.
You can provide the detailed data in an appendix or even embedded as Excel files in your PowerPoint deck. Often, as you build your credibility, most people become comfortable just taking the high level takeaways.
Also have these stakeholders understand their accountability in the process. For example, the forecasting (if separate) or sales and marketing groups should be accountable for variances between forecast and actual demand.
(Likewise, they should be made accountable for forecast changes.)
3. It’s Not an Event
Here are some thoughts that come to mind when folks hear Sales and Operations Planning:
- It’s a PowerPoint presentation.
- It has something to do with enterprise resource planning (ERP) software.
- It’s a meeting held once a month.
It’s not though. In fact, it might be more accurate to say that S&OP is a supply chain planner’s job description. This is what you should be doing day-to-day.
Trust, credibility and respect are not built via grand meetings once a month. They’re developed by the small actions you do everyday. It’s this consistency that builds these strong working relationships.
These principles have worked for us over time. But I’m sure there are many others. What have you found effective in your own organizations? We’d love to hear them.
As always, if you know of people that may find this discussion interesting, we’d appreciate it if you passed it along.
image: © istockphoto.com/shironosov