{"id":9714,"date":"2022-07-08T09:01:33","date_gmt":"2022-07-08T13:01:33","guid":{"rendered":"https:\/\/demand-planning.com\/?p=9714"},"modified":"2022-07-08T09:01:33","modified_gmt":"2022-07-08T13:01:33","slug":"driving-decision-making-in-sop","status":"publish","type":"post","link":"https:\/\/demand-planning.com\/2022\/07\/08\/driving-decision-making-in-sop\/","title":{"rendered":"Driving Decision Making In S&#038;OP"},"content":{"rendered":"<span class=\"cb-itemprop\" itemprop=\"reviewBody\"><hr \/>\n<p><strong>Sometimes driving S&amp;OP towards decision making is challenging, with meetings often focused more on the here and now than looking forward, especially when the economic environment is so uncertain. <\/strong><\/p>\n<p><span style=\"font-weight: 400;\">The pandemic highlighted the importance of collaboration, consensus and transparency in this process and, if we weren\u2019t aware before, the criticality of using <a href=\"https:\/\/demand-planning.com\/category\/process\/sop-process\/\">S&amp;OP<\/a> to make timely and effective decisions. So, how do we optimize <a href=\"https:\/\/demand-planning.com\/category\/process\/sop-process\/\">S&amp;OP<\/a> for decision making?<\/span><\/p>\n<h2><b>The Challenges of Planning in the Current Environment\u00a0<\/b><\/h2>\n<p><span style=\"font-weight: 400;\">I have been involved in <a href=\"https:\/\/demand-planning.com\/category\/process\/sop-process\/\">S&amp;OP<\/a> since 2005 and <\/span><span style=\"font-weight: 400;\">am currently implementing<\/span><span style=\"font-weight: 400;\"><a href=\"https:\/\/demand-planning.com\/category\/process\/sop-process\/\"> S&amp;OP<\/a> at DS Smith, a global packaging company. <a href=\"https:\/\/demand-planning.com\/category\/process\/sop-process\/\">S&amp;OP<\/a> is all too often an update forum where we talk about previous performance and a one number plan. With the challenges presented by COVID and the Ukraine war <\/span><span style=\"font-weight: 400;\">scenario planning is critical, so a business has a response to factors that may become reality. This reduces the all too common firefighting loop that businesses find themselves in. I have seen, however, t<\/span><span style=\"font-weight: 400;\">hat functions don\u2019t always like giving up their power of decision making to a collaborative, cross-functional forum, partly because they feel that they alone have the depth of knowledge to make decision relating to their functions, and partly because they can make decisions quicker if they operate outside the <a href=\"https:\/\/demand-planning.com\/category\/process\/sop-process\/\">S&amp;OP<\/a> cycle.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">In my world, the focus is now much more short term as well as on assumptions for the longer term horizon as we\u2019re unclear as to what the next year to 18 months will look like. Selling patterns are different to pre-pandemic and what I\u2019m finding now is that we need a very good S&amp;OE (Sales &amp; Operations Execution) process running alongside <a href=\"https:\/\/demand-planning.com\/category\/process\/sop-process\/\">S&amp;OP<\/a>.<\/span><\/p>\n<p>&nbsp;<\/p>\n<p><iframe loading=\"lazy\" title=\"Optimizing S&amp;OP For Effective Decision Making\" width=\"1200\" height=\"675\" src=\"https:\/\/www.youtube.com\/embed\/Zx7ZfHuPu-s?feature=oembed\" frameborder=\"0\" allow=\"accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture\" allowfullscreen><\/iframe><\/p>\n<h2><b>Where to Make Decisions, S&amp;OP or S&amp;OE?<\/b><\/h2>\n<p><span style=\"font-weight: 400;\">With that, it\u2019s important to define where we take decisions \u2013 in the shorter-term S&amp;OE or in the longer term, more strategic S&amp;OP process? Having very defined S&amp;OE and S&amp;OP processes stops people from \u2018going rogue\u2019 and making siloed decisions.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">In the packaging world linked to FMCG, volumes have reduced compared to pre-pandemic. As a result, we\u2019ve had to make some very quick decisions. Do we stock build, turn off capacity for example? If so, we can\u2019t wait for the <a href=\"https:\/\/demand-planning.com\/category\/process\/sop-process\/\">S&amp;OP<\/a> cycle. Tactical decisions, tackling the next month\u2019s view, are then taken care of. This reassures people across functions that the key tactical decisions are being taken<\/span><span style=\"font-weight: 400;\"> in a timely manner,<\/span><span style=\"font-weight: 400;\"> and thus stops them going \u2018off-piste\u2019. <\/span><span style=\"font-weight: 400;\">Communication of these decisions is also a critical part of ensuring alignment across the business.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">You may well find that maintaining your existing <a href=\"https:\/\/demand-planning.com\/category\/process\/sop-process\/\">S&amp;OP<\/a> cycle in this current environment is having negative impacts on your business. If I see an upturn in demand, I want us to be ready for it so we don\u2019t miss out on sales \u2013 S&amp;OE helps with that.<\/span><\/p>\n<h2><b>Don\u2019t Make S&amp;OP More Tactical, That\u2019s What S&amp;OE is for<\/b><\/h2>\n<p><span style=\"font-weight: 400;\">I find that data is the challenge at the moment; things are changing so much that we can make a decision one week, and by next week the assumptions behind that data have changed and don\u2019t support that decision anymore. Assumptions behind market behavior are changing with us coming out of COVID, people coming back to work, inflation, and the war in Ukraine. All of that creates demand volatility.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">We need to be on top of all these fluctuations, increasing the importance of shorter term decision taking, but leaving the <a href=\"https:\/\/demand-planning.com\/category\/process\/sop-process\/\">S&amp;OP<\/a> process intact so we\u2019re not constantly changing the longer-term strategy based on tactical decisions.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">You have to keep the shorter and longer-term planning approaches separate. I caution against making <a href=\"https:\/\/demand-planning.com\/category\/process\/sop-process\/\">S&amp;OP<\/a> more tactical \u2013 it\u2019s not designed to be agile. It\u2019s about identifying gaps. So, regardless of whatever is happening in the short-term we don\u2019t change our targets and budgets, and so we shouldn\u2019t change our <a href=\"https:\/\/demand-planning.com\/category\/process\/sop-process\/\">S&amp;OP<\/a>.<\/span><\/p>\n<p><iframe loading=\"lazy\" title=\"Why S&amp;OP Needs S&amp;OE To Combat Volatility\" width=\"1200\" height=\"675\" src=\"https:\/\/www.youtube.com\/embed\/M2WgaUlZC4U?start=19&#038;feature=oembed\" frameborder=\"0\" allow=\"accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture\" allowfullscreen><\/iframe><\/p>\n<p>&nbsp;<\/p>\n<h2><b>Tips for Keeping S&amp;OP Meetings Focused On Decision Making<\/b><\/h2>\n<p><span style=\"font-weight: 400;\">Constant reinforcement of what <a href=\"https:\/\/demand-planning.com\/category\/process\/sop-process\/\">S&amp;OP<\/a> is for is key to keeping focused on decision making. At DS Smith we do the \u2018what-ifs\u2019 \u2013 what are the realistic likely scenarios that we need to model that executives need to make decisions on, <\/span><span style=\"font-weight: 400;\">when would these decisions need to be taken<\/span><span style=\"font-weight: 400;\">, and what are the financial implications of those scenarios? It\u2019s about coming back to the gaps and closing them in good time. For me it\u2019s about discussing how we use inventory, how we use <\/span><span style=\"font-weight: 400;\">our capacity<\/span><span style=\"font-weight: 400;\"> so there are no surprises relative to the plan.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Identifying best and worst-case scenarios allows us to close the gaps ahead of time so we don\u2019t have to make tactical decisions. This helps delineate <a href=\"https:\/\/demand-planning.com\/category\/process\/sop-process\/\">S&amp;OP<\/a> and S&amp;OE, keeping the right level of decision making in the right forum. If we do need shorter term, and tactical decision making then we take that to S&amp;OE.<\/span><\/p>\n<p><span style=\"font-weight: 400;\"><a href=\"https:\/\/demand-planning.com\/category\/process\/sop-process\/\">S&amp;OP<\/a> stakeholders don\u2019t always read the meeting pre-reads so if there are decisions that need to be made coming out of the next <a href=\"https:\/\/demand-planning.com\/category\/process\/sop-process\/\">S&amp;OP<\/a> meeting,<\/span><span style=\"font-weight: 400;\"> I\u2019ll meet the main participants <\/span><span style=\"font-weight: 400;\">individually ahead of time and <\/span><span style=\"font-weight: 400;\">walk them through the desired outcomes<\/span><span style=\"font-weight: 400;\">. In week 4 before <a href=\"https:\/\/demand-planning.com\/category\/process\/sop-process\/\">S&amp;OP<\/a>, I might book an hour with the key people which <\/span><span style=\"font-weight: 400;\">can then be canceled if not needed<\/span><span style=\"font-weight: 400;\">.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">This is harder with remote working \u2013 gone are the days of going up to somebody in the office for a quick chat and setting expectations ahead of meetings. With remote working I find people&#8217;s diaries are completely full, so arranging a Zoom call is difficult. Going back to just phoning people as and when helps rather than trying to book peoples\u2019 time.<\/span><\/p>\n<h2><b>Educating S&amp;OP Stakeholders for S&amp;OP Maturity<\/b><\/h2>\n<p><span style=\"font-weight: 400;\">Driving <a href=\"https:\/\/demand-planning.com\/category\/process\/sop-process\/\">S&amp;OP<\/a> as a powerful decision-making process requires constant improvement and education. As an <a href=\"https:\/\/demand-planning.com\/category\/process\/sop-process\/\">S&amp;OP<\/a> lead, I always keep an eye on our <a href=\"https:\/\/demand-planning.com\/category\/process\/sop-process\/\">S&amp;OP<\/a> maturity and where we are in our evolution. I sometimes engage consulting firms to gain a clear picture of where we are and what it\u2019ll take to progress to the next step. Every step needs some education \u2013 there\u2019s no shame in bringing in outside experts; after all, some messages are better delivered from the outside than in.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">From my point of view, as someone responsible for this education, it is just a case of getting the budget to do it. I always<\/span><span style=\"font-weight: 400;\"> follow<\/span><span style=\"font-weight: 400;\"> a change management approach where we do the initial education with coaching and hand holding, then we run the process, then we have a review. For example, last year with DS Smith we launched <a href=\"https:\/\/demand-planning.com\/category\/process\/sop-process\/\">S&amp;OP<\/a> in April, then in October we had a \u2018what\u2019s working and what to improve\u2019 review. <\/span><span style=\"font-weight: 400;\">This helps with the buy in of those involved in the process, and helps me understand what they need as an outcome of <a href=\"https:\/\/demand-planning.com\/category\/process\/sop-process\/\">S&amp;OP<\/a>.<\/span><\/p>\n<h2><b>The Bottom Line<\/b><\/h2>\n<p><span style=\"font-weight: 400;\">To conclude, it\u2019s worth remembering the key elements of successful <a href=\"https:\/\/demand-planning.com\/category\/process\/sop-process\/\">S&amp;OP<\/a>. Keeping focus on the below will facilitate the decision making it is designed to achieve:<\/span><\/p>\n<p><b><i>Collaboration<\/i><\/b><b>:<\/b><span style=\"font-weight: 400;\"> Bringing cross-functional teams together to drive a one-number attitude with clear timings for decisions based on scenarios coming to life<\/span><\/p>\n<p><b><i>Transparenc<\/i><\/b><b>y: <\/b><span style=\"font-weight: 400;\">Explaining on what you know and what you don\u2019t across functions and extending that attitude to your trading partners<\/span><\/p>\n<p><b><i>Consensus<\/i><\/b><b>:<\/b><span style=\"font-weight: 400;\"> Making decisions together that benefit the business as a whole<\/span><\/p>\n<p><span style=\"font-weight: 400;\">\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\"> <a href=\"https:\/\/ibf.org\/events\/orlando2022\"><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-9719 size-full alignnone\" src=\"https:\/\/demand-planning.com\/wp-content\/uploads\/2022\/07\/Orlando-2022.png\" alt=\"\" width=\"800\" height=\"450\" srcset=\"https:\/\/demand-planning.com\/wp-content\/uploads\/2022\/07\/Orlando-2022.png 800w, https:\/\/demand-planning.com\/wp-content\/uploads\/2022\/07\/Orlando-2022-300x169.png 300w, https:\/\/demand-planning.com\/wp-content\/uploads\/2022\/07\/Orlando-2022-768x432.png 768w\" sizes=\"(max-width: 800px) 100vw, 800px\" \/><\/a><\/span><\/p>\n<p><span style=\"font-weight: 400;\">\u00a0<\/span><span style=\"font-weight: 400;\">Join us in Orlando for IBF&#8217;s <a href=\"https:\/\/ibf.org\/events\/orlando2022\">Business Planning, Forecasting &amp; S&amp;OP\/IBP Conference<\/a> from October 18-21. With 2 maturity level streams, you&#8217;ll find the specific knowledge you need to implement or improve S&amp;OP\/IBP, and level up your planning skill set. With great networking and socializing in a wonderful Florida setting, it&#8217;s the biggest and best event of it&#8217;s kind. <a href=\"https:\/\/ibf.org\/events\/orlando2022\">Register now<\/a> to avail of Super Early Bird pricing.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">\u00a0<\/span><\/p>\n<p>&nbsp;<\/p>\n<\/span>","protected":false},"excerpt":{"rendered":"<p>Sometimes driving S&amp;OP towards decision making is challenging, with meetings often focused more on the here and now than looking forward, especially when the economic environment is so uncertain. The pandemic highlighted the importance of collaboration, consensus and transparency in this process and, if we weren\u2019t aware before, the criticality of using S&amp;OP to make [&hellip;]<\/p>\n","protected":false},"author":2880,"featured_media":9715,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[562,37],"class_list":{"0":"post-9714","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-uncategorized","8":"tag-soe","9":"tag-sop"},"_links":{"self":[{"href":"https:\/\/demand-planning.com\/wp-json\/wp\/v2\/posts\/9714"}],"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\/2880"}],"replies":[{"embeddable":true,"href":"https:\/\/demand-planning.com\/wp-json\/wp\/v2\/comments?post=9714"}],"version-history":[{"count":0,"href":"https:\/\/demand-planning.com\/wp-json\/wp\/v2\/posts\/9714\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/demand-planning.com\/wp-json\/wp\/v2\/media\/9715"}],"wp:attachment":[{"href":"https:\/\/demand-planning.com\/wp-json\/wp\/v2\/media?parent=9714"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/demand-planning.com\/wp-json\/wp\/v2\/categories?post=9714"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/demand-planning.com\/wp-json\/wp\/v2\/tags?post=9714"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}