{"id":7072,"date":"2018-06-28T09:36:57","date_gmt":"2018-06-28T13:36:57","guid":{"rendered":"https:\/\/demand-planning.com\/?p=7072"},"modified":"2018-09-21T11:36:16","modified_gmt":"2018-09-21T15:36:16","slug":"why-all-ceos-must-embrace-sop","status":"publish","type":"post","link":"https:\/\/demand-planning.com\/2018\/06\/28\/why-all-ceos-must-embrace-sop\/","title":{"rendered":"Why All CEOs Must Embrace S&OP"},"content":{"rendered":"

According to Merriam-Webster, \u201cThe English word\u00a0chaos\u00a0is borrowed from the Greek word that means \u2018abyss.\u2019 In ancient Greece,\u00a0Chaos was originally thought of as the abyss or emptiness that existed before things came into being.\u201d Bill Mrzlak, founder of ChainSequence<\/a>, reveals how CEOs must combat business chaos with S&OP.<\/em><\/strong><\/p>\n

When chaos rules over everyday business operations, it isn\u2019t just stressful for your employees, it can be devastating to your company\u2019s bottom line. The cure for persistent business chaos\u2014Sales and Operations Planning<\/a> (S&OP)\u2014was specifically developed to help companies move from reactive business decision-making, to a structured, measurable program that capitalizes on opportunities while minimizing barriers to future growth.<\/p>\n

S&OP<\/a>, which has actually been around for decades, is especially relevant today as a practical methodology to navigate a strategic pathway through today\u2019s unpredictable global marketplace. As commerce becomes increasingly dependent on data, analytics, AI, and digital technology, a thoughtfully-designed S&OP<\/a> program helps an organization 1) identify and map out a cohesive, goals-oriented business strategy, and 2) follow through on that strategy with robust forecasting and transparent reporting cycles.<\/p>\n

A perfect storm of disruptive events has caused disruption to many industries in recent years<\/p><\/blockquote>\n

A perfect storm of disruptive events – the onset of digital start-ups, creative product innovations, and the evolution of e-commerce \u2013 has caused disruption to many industries in recent years. The result for competing businesses? You guessed it – chaos. If your business wants to respond effectively to the potentially negative impacts these disruptors may have on your organization, creating an S&OP<\/a> program can be your best defense in safeguarding your market share, and reinforcing your strategic aims through common purpose. S&OP<\/a> has proven its worth time and again, helping enterprises to effectively disrupt the status quo and change the direction of their business, build support for common goals, and lead to continuous gains and improvements over time.<\/p>\n

Re-Routing Your Business Toward S&OP \u2013 Without Flying By The Seat Of Your Pants<\/h2>\n

We always recommend that business executives take the time to research S&OP<\/a>, obtain a basic understanding of the mechanics of the process, and go about the work of building internal buy-in and support. There are several factors management partners must bear in mind before embarking on an S&OP<\/a> deployment. Change Management<\/a> is by far the first and most important consideration\u2014know what you\u2019re getting your business into and why. Often, changing longstanding behaviors and pivoting to new organizational processes can be more difficult than defining the actual process itself.<\/p>\n

The first and most important question is, \u201cWhy do I want an S&OP<\/a> process?\u201d Years ago, Gartner published its five-stage S&OP<\/a> maturity model, which offers a straightforward guide to help your business determine where it lands along the S&OP<\/a> maturity spectrum. As a starting point, evaluate where you are currently and be realistic in where you\u2019d like to go. If your organization has no process in place, an impartial evaluation conducted by an external subject matter expert can help you launch an enterprise-wide S&OP<\/a> deployment effort on the right footing.\u00a0 Some organizations, for instance, confuse a basic demand\/supply planning process for S&OP<\/a>, so be cognizant of keeping S&OP<\/a>, which is an oversight and decision-support system, separate and distinct from supply chain processes.<\/p>\n

Understand the key drivers and objectives of your organization by 1) identifying the company\u2019s strategic goals and financial objectives; and 2) ensuring that everyone within the organization know what these goals are. Be clear on what you want so that it can be achieved, whether that be for financial, operational, organizational reasons, or for behavioral issues such as revenue, profits, utilization, accountability, communication, or consensus.<\/p>\n

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

Warnings, Detours, and Obstructions Ahead \u2013 Getting Around These Obstacles<\/h2>\n

The inherent psychology embedded in S&OP<\/a> implementations\u2014learning to work collaboratively instead of as independent silos\u2014means that the road ahead has potential behavioral obstacles to overcome.\u00a0 Knowing these obstructions exist in advance will help you to cut them off at the pass \u2013<\/p>\n