Stop for S&OP
Make some time. It will be worth it. Implementing Sales and Operations Planning Process will take your organization to another level. How? We’re great right now! If you ask the right way, everyone will tell you the king’s clothes are perfect, every time. S&OP takes time to implement, maybe a few months. If you don’t allow people time to prepare and change routines for S&OP, it won’t happen – because you did not prioritize it. Making time for S&OP by hiring staff, contractors, consultants, or Simplement (I’m getting to that – promise), lets everyone know S&OP is a priority. Your staff won’t need to choose daily tactical work or S&OP preparation, they can support both, because they will have help.
Lead S&OP
Its the same things. Some might already be done. But you always need leadership. If leadership doesn’t care, there is no hope for S&OP. Need to help your leadership understand the process and benefits? Get this book by Wallace and Stahl that lays out S&OP perfectly. In 138 pages, they cover S&OP entirely, at a high level. Leadership is required to ensure participation because only leaders can ensure accountability. But what if people still don’t participate? Leadership should gently ask staff and management what is necessary to help S&OP happen. You can demand people come. Or try to learn about your business and it might start with “I didn’t know your team needed help”. After interest from leadership, make sure specific people know they have responsibility for S&OP.
Start S&OP
What do we do? After people, you need a decision. Where to start. Start with only part of the business like a small product family, or product type. It should be a market facing grouping. The “S” in S&OP is for SALES and if you want input from marketing and sales, pick a market facing grouping so sales understands how the process AFFECTS them. Why do I care about what sales thinks? Selling is how you get revenue, increase revenue, and optimize profit.
This is where Simplement helps. We extract SAP data in real time for these decisions. This depends on your business. This is written based on the author’s experience, of course, primarily in manufacturing businesses with large finished goods portfolios. That means lots of data, and Simplement excels at providing lots of quality data. Simplement also makes it easy to analyze that data.
Paycheck
Which product or group? Start with profit ranking: a rank of profit by material by month, 3 month, 6 month, last 12. Not revenue? Say it with me: “Where does my paycheck come from?”. Profit. Why would I start there? Focus on the profit first. Find the material producing top profit consistently and pick that item or product family that includes that item.
This starts some of the conversations, like “Sales, what do you think about this product? Product group? What should we use for a pilot for S&OP?” Then ask planners: “Where is this made, purchased from, built…?” And ask analysts or IT, whoever gathers your data “what is the easy aggregation for this group?” This last part gets to your master data hierarchies, product groups, et cetera and whether or not the group, that you think is a group, is actually a group. And do the other products logically ‘group’?
First Agenda
Get a leader, get input, get data. Decide on a grouping, create a plan, and have a meeting. With laptops. Everyone logged on ready to discuss details. It won’t be perfect, meet anyway. I’ll talk about each of the steps in another post. For this first meeting, discuss the following:
1. Why are we doing this? To benefit from a central plan, with input from everyone.
2. What is the goal? To help the business grow and succeed, and improve.
3. What are we starting with? Discuss how the product or group was selected.
4. How do we start? Focus on all inputs to improve the product or group. Forecast, Stock, Sales, Lead Time…
5. Are there risks or complications? What has not been considered? Ask about obvious risks.
6. What’s next? Assign action items as you go, store it centrally for viewing, limit edits to coordinators.
7. How did it go? Ask for feedback about the MEETING. What is lacking in the MEETING.
Action Items
This is how things get done. When your name is on the list, you want it off. Use an excel file and start right away. The file needs these columns: meeting (collect actions for multiple meetings here), entry date, specific action description, due date, and a name of the owner (always a person). When this happens, people will try to get things done before the meeting ends. Because it feels good. Um, yeah. Not entirely. More to do with getting your name off the action item list.
Do not be shy about action items. Create mundane action items. If action items don’t get done, ask what is needed which can lead to: I need xyz from lmnop. New action item: for someone who might not be present. Make sure you distribute it to everyone with actions. Remember that part about leadership? When leaders show up, and staff is asked about THEIR action item, with their name, and they answer “done” or “I need help” or “I’ll do that now”, stuff gets done.
Time It
Keep it on time. End on time. Your staff have the rest of their job to do. You hired them to do a job, then threw this on top. Be fair and you’ll get the best. Demand the best and you’ll get turnover. Cut it off with 15 left and discuss improvements. The leader should speak last to get the best, unbiased input. Some discussions need to be in the lead up meetings to the S&OP – create an action item to meet to discuss and make a decision on something. Don’t let the meeting get derailed for more than a minute or so. This is why there are multiple meetings. To allow time to discuss details of a forecast, or production, or investments, et cetera.
Conclusion
Ultimately, a successful S&OP implementation requires time and patience, leadership, and data. Ensure staff know the goal: involvement. You invite people because what they say is important to making things better.
And get Roundhouse so you can get real time data. You need it, and you need it to be easy.
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