{"id":6912,"date":"2018-05-23T12:31:59","date_gmt":"2018-05-23T16:31:59","guid":{"rendered":"https:\/\/demand-planning.com\/?p=6912"},"modified":"2018-05-23T12:32:35","modified_gmt":"2018-05-23T16:32:35","slug":"cross-functional-alignment-sop","status":"publish","type":"post","link":"https:\/\/demand-planning.com\/2018\/05\/23\/cross-functional-alignment-sop\/","title":{"rendered":"Master The Basics Of Cross-Functional Alignment"},"content":{"rendered":"

Have you ever produced a forecast but weren’t told about a last-minute campaign or marketing activity that went on to drive sales far higher than anticipated? If you ended up taking the blame\u00a0for the company not having enough inventory\u00a0to meet demand, I feel your pain. But don’t worry, there is a better way.<\/b><\/p>\n

Why does this happen? What is stopping individuals and departments from providing each other with the correct information? Isn’t there a common interest in ensuring that the customer is served and the company delivers its business plan? Of course there is, but that’s not how it always works in the real world. That’s why we need a structured approach to cross-functional alignment.<\/p>\n

Awareness And Knowledge Arise From Alignment<\/h2>\n

The importance of End-to-End Business Astuteness becomes clear in such cases. It\u2019s all about the awareness, knowledge and alignment of each part of the business. This includes Supply Chain, Finance, Commercial, Marketing and any other department that can impact sales volume. Cross-departmental collaboration is key so that opportunities and risks are made visible to drive a more customer-centric and profitable business.<\/p>\n

The challenge is that most departments do not know what the other department does or what their goals are.<\/p><\/blockquote>\n

\"S&OP<\/p>\n

 <\/p>\n

Each department drives the actions of another department which results in finding the golden cog in the machine. That can be the one big sale the company was looking for, reduction in slow moving inventory or a major cost cutting initiative. The challenge is that most departments do not know what the other departments do or what their goals are. They do not understand the impact of their actions upon other departments, nor the importance of communication. Remember that any action by the various departments can drive revenue, but they can also drive costs. Be aware that any initiative you launch that is decided in your departmental vacuum can adversely other departments, and cost your company money. Unless you communicate and engage, you will never know.<\/p>\n

These actions need to be presented in such a way that the consequences from an end-to-end perspective are clear to the decision makers.<\/p>\n

Factors To Consider When Making Business Decisions<\/h2>\n

Imagine you have your own company and there is a decision to be made to change the production plan so that a large order can be shipped to a customer. What information do you need to make a decision? Here is what you need to consider:<\/p>\n

\u2022 Cost to run extra shifts
\n\u2022 Cost to expedite the transportation
\n\u2022 Cost to procure materials
\n\u2022 Profit of the potential sale
\n\u2022 Risk percentage of product returns
\n\u2022 Impact on gross profit
\n\u2022 Impact on market share
\n\u2022 Impact on other customers
\n\u2022 Importance of the customer versus other customers
\n\u2022 Quality and compliance risk<\/p>\n

The decision should be weighted by financial feasibility (Cost to Serve) as well the customer-centric factors. The pressure to hit the numbers often overrides the importance of doing a financial feasibility exercise. What’s more, it often takes time to get the necessary information to carry out financial feasibility tests – by the time the report is ready, the sale may have been lost, so use your judgement accordingly.<\/p>\n

What You Need From People<\/h3>\n

\u2022 All departments must understand what the other departments do, know what they need and when they must include them.
\n\u2022 Create a training schedule where all employees have to learn about the other departments. This must start at the time of onboarding and then be repeated every couple of months.
\n\u2022 Use the lunch and learn tool, get people around the table to explain what they do and what they need from the other departments.
\n\u2022 Make sure that everyone speaks the same \u2018language\u2019. Departmental jargon is not helpful. Do not use abbreviations!
\n\u2022 Have regular townhalls or cross departmental meeting to communicate the company strategy sending the message that it is a shared responsibility that can only be successful with everyone on board. Hold people accountable!<\/p>\n

What You Need From Processes<\/h3>\n

\u2022 New product launch \u2013 a clear project plan including all parties including accountability and timing
\n\u2022 Exception management \u2013 how to handle exceptions such as higher than anticipated sales, who does what?
\n\u2022 Clear daily\/weekly\/monthly meeting plan including accountability and deliverables
\n\u2022 The decision making process must be underpinned by financial and customer driven data.<\/p>\n

What You need From Technology<\/h3>\n

\u2022 Manageable software \u2013 user friendly and fast
\n\u2022 Business warehouse \u2013 impeccable master data
\n\u2022 Informative interactive live Dashboards
\n\u2022 Scenario tools \u2013 quick action decision making tools<\/p>\n

End-to-End Business Astuteness is the key to having one voice and a united team who are driven by the success of the company! In conclusion, having the big picture in mind and a clear understanding of how the cogs in the machine of your business will help you to make the right decisions at the right time!<\/p>\n

 <\/p>\n<\/span>","protected":false},"excerpt":{"rendered":"

Have you ever produced a forecast but weren’t told about a last-minute campaign or marketing activity that went on to drive sales far higher than anticipated? If you ended up taking the blame\u00a0for the company not having enough inventory\u00a0to meet demand, I feel your pain. But don’t worry, there is a better way. Why does […]<\/p>\n","protected":false},"author":5557,"featured_media":6923,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[379,377,359,378,322],"tags":[402,37],"class_list":{"0":"post-6912","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-collaboration","8":"category-organization","9":"category-people","10":"category-process","11":"category-sop","12":"tag-cross-functional","13":"tag-sop"},"_links":{"self":[{"href":"https:\/\/demand-planning.com\/wp-json\/wp\/v2\/posts\/6912"}],"collection":[{"href":"https:\/\/demand-planning.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/demand-planning.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/demand-planning.com\/wp-json\/wp\/v2\/users\/5557"}],"replies":[{"embeddable":true,"href":"https:\/\/demand-planning.com\/wp-json\/wp\/v2\/comments?post=6912"}],"version-history":[{"count":0,"href":"https:\/\/demand-planning.com\/wp-json\/wp\/v2\/posts\/6912\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/demand-planning.com\/wp-json\/wp\/v2\/media\/6923"}],"wp:attachment":[{"href":"https:\/\/demand-planning.com\/wp-json\/wp\/v2\/media?parent=6912"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/demand-planning.com\/wp-json\/wp\/v2\/categories?post=6912"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/demand-planning.com\/wp-json\/wp\/v2\/tags?post=6912"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}