{"id":9105,"date":"2021-05-07T08:52:34","date_gmt":"2021-05-07T12:52:34","guid":{"rendered":"https:\/\/demand-planning.com\/?p=9105"},"modified":"2021-05-07T08:52:34","modified_gmt":"2021-05-07T12:52:34","slug":"what-sop-is-what-its-definitely-not","status":"publish","type":"post","link":"https:\/\/demand-planning.com\/2021\/05\/07\/what-sop-is-what-its-definitely-not\/","title":{"rendered":"What S&OP Is (& What It’s Definitely Not)"},"content":{"rendered":"

Sales and Operations Planning (S&OP) is a structured monthly business process that aligns all functional areas under a unified set of assumptions to enable and coordinate decision making. It integrates product, demand, supply, operations, and financial planning into one game plan for business.<\/strong><\/p>\n

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The guiding principle is that S&OP<\/a> is a formalized and repeatable process that integrates different steps and functional areas. To help us understand exactly what S&OP<\/a> is (and what it is not), I have created the following list.<\/p>\n

1. S&OP is not a supply chain procedure<\/em><\/strong> \u2013 It needs to be a business process. It needs to be elevated to the same level as where business decisions are made. If it remains purely a supply chain or demand planning process, it will never be truly linked to strategy or have full participation from executives<\/a>.<\/p>\n

2. S&OP is not about a number<\/em><\/strong> \u2013 It is not about creating a forecast number or how much we need to produce. It needs to become the way you align to strategies. A business process is a structured set of activities that produce a desired result. If your desired result is just a forecast or inventory number, then why bother? A system can do that for you. We need results that generate tactical responses and strategies that drive the business.<\/p>\n

3. S&OP is not just Sales and Operations<\/em><\/strong> \u2013 It needs to align with all functions. If it is a business process, it will be impacting all aspects of the business so everyone needs a seat at the table. As per the point above, if S&OP<\/a> never progresses beyond a functional process, while we can say it is integrated, we will struggle to get cross-functional buy in and participation.<\/p>\n

4. S&OP is not supply\u2019s response to a forecast<\/em><\/strong> \u2013 It needs to be a unified plan. There needs to be a one number attitude and this goes beyond forecast. Just as we need to go beyond integration of all functional areas, we need to extend this one number attitude to a single set of assumptions and plans.<\/p>\n

5. S&OP is not a reporting forum <\/em><\/strong>\u2013 It needs to be a decision-making consultation. If all you are doing is meeting and reporting what happened last period, how bad your KPI\u2019s<\/a> were, or even revealing the latest forecast, then you\u2019re wasting yours and everybody\u2019s time because these can all be done via email. It is almost guaranteed that a process that doesn\u2019t help solve business decisions will, over time, lose engagement from executives<\/a>.<\/p>\n

6. S&OP is not a meeting<\/em><\/strong> \u2013 it needs to be an iterative process. While there are various meetings that comprise S&OP<\/a>, we cannot lose sight of the objective of the S&OP<\/a> process. This is about collaboration, communication, and consensus – and meetings facilitate part of this. But each meeting is part of a whole and enables the next step in the process, guiding us closer to making key business decisions.<\/p>\n

7. S&OP is not a project<\/em><\/strong> \u2013 it needs to be a continual development. Unfortunately, many organizations start their journeys with only the objective of having a running S&OP<\/a> process. Projects have a defined deliverable and timeline with an end date. S&OP<\/a> has continuous incremental improvements and if done properly, will help run your business and enable decision making. Do not start an S&OP<\/a> project, but rather begin your journey,<\/em> implementing small changes and improving each month.<\/p>\n

The Bottom Line<\/h2>\n

Sales and Operations Planning (S&OP<\/a>) is a powerful decision-making tool for businesses. According to Tom Wallace<\/a>, one of the originators of S&OP<\/a>, \u201cS&OP<\/a> enables the company\u2019s managers to view the business holistically and gives them a window into the future\u201d.<\/p>\n

It needs to be thought of more as a strategic operating model for making better decisions. Sure, you may be organizing monthly meetings and maybe a four step or five step process, but your mindset should focus on an enterprise-wide process, aligning all functional areas around a common set of assumptions, thereby enabling the business to make better decisions.<\/p>\n

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To develop your S&OP skills, there is no better training than IBF’s Forecasting, Demand Planning, & S&OP Live Online Training<\/a>, held in May 2021. You’ll\u00a0learn all aspects of the field from university professors and Directors of Supply Chain and Demand<\/span> Planning at multinational companies. Pick and choose each module for $379 ($329 when you become an IBF member) or the full course plus exams to get IBF CPF certified. Find out more<\/a>.<\/strong><\/p>\n

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

Sales and Operations Planning (S&OP) is a structured monthly business process that aligns all functional areas under a unified set of assumptions to enable and coordinate decision making. It integrates product, demand, supply, operations, and financial planning into one game plan for business. The guiding principle is that S&OP is a formalized and repeatable process […]<\/p>\n","protected":false},"author":3470,"featured_media":9109,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[37],"class_list":{"0":"post-9105","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-uncategorized","8":"tag-sop"},"_links":{"self":[{"href":"https:\/\/demand-planning.com\/wp-json\/wp\/v2\/posts\/9105"}],"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\/3470"}],"replies":[{"embeddable":true,"href":"https:\/\/demand-planning.com\/wp-json\/wp\/v2\/comments?post=9105"}],"version-history":[{"count":0,"href":"https:\/\/demand-planning.com\/wp-json\/wp\/v2\/posts\/9105\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/demand-planning.com\/wp-json\/wp\/v2\/media\/9109"}],"wp:attachment":[{"href":"https:\/\/demand-planning.com\/wp-json\/wp\/v2\/media?parent=9105"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/demand-planning.com\/wp-json\/wp\/v2\/categories?post=9105"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/demand-planning.com\/wp-json\/wp\/v2\/tags?post=9105"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}