You need data: for collaboration, decisions, preparation, availability… for Sales and Operations Planning (S&OP). In this
blog we explore how to improve collaboration in the S&OP process.
Collaboration Habits
Collaboration, from Merriam Webster is defined as: [working together with others to create something]. The opposite is obvious: not working together. S&OP is a process for working together discussing functionally focused parts of the business, to optimize outcomes. A scheduled series of negotiations.
S&OP often starts with polite complaints. Meanwhile, private calls and emails continue to get orders out, product built, components expedited, and disrupt the “plan”. These efforts are “For the good of the company” but this does not deliver consistent benefits. The complaints are important. They help everyone feel heard, and participate, but they need to be converted to improvements.
Strategy to Action
Every S&OP launch is bumpy and requires data – so skip to the data. But, collaboration? Data access levels the playing field, creating focal points for discussing opportunities. When everyone sees the same picture, they more clearly understand different viewpoints. When each department has only their own data, especially aggregated data, it is hard to convey opportunities.
But who will gather the data? IT has a full plate. Some determined associates will find a way and get quietly punished: “How did you get data? Is it right? Where did you get it? When did you get this? This is not an approved method…” Then they lose their SE16N access or get updated export limitations.
S&OP Actions
To illustrate, here are some key S&OP collaboration topics with links to detailed posts. Each highlight the importance of detailed data to support aggregated S&OP reviews resulting in a link between strategy and action.
Portfolio Analysis: Daily, planners ask: “What do I do first?” Answer the phone, emails, hide with coffee? Portfolio analysis connects strategy with daily activities and priorities. It is a combination of profit rankings and product lifecycle management with an ABC ranking as the output. ABC indicators (not cycle count rankings). It is the answer to the question: “What do I do first?” Take care of the A items.
Demand planning: Forecasts don’t matter – except to the someone forecasting capacity, components, or vendor capacity. Forecasts require maintenance or result in excess inventory or lost sales. Reporting needs to include all existing forecasts – not just aggregate reporting. This catches problem forecasts, whether too high, too low, or too inaccurate so accommodations can be made. Additionally, A items should have the most regular forecast reviews. Lastly, reality check sales projections with a revenue forecast from units x prices.
Inventory: Reduce inventory! Which inventory? How much? At a conference, some attendees shared a request to reduce A item inventory when covid hit, hurting sales when demand returned. Blanket “reduce inventory” request? What were the A items? Why were inventories high on A items? To repeat: ABC rankings drive action – they are the priorities, which should dictate attention, inventory, and service levels.
Supply Planning: “Can they ship today?” Give planners a system with ABC rankings to reduce firefighting. The portfolio analysis drives priorities, option development, and maintenance. Align on priorities to lower stress for everyone. Help them do a good job, and they will.
Common Goals
Without a doubt, confidence in the data is key for collaboration in S&OP. When functions align on priorities, firefighting decreases. Common goals can be identified and communicated resulting in strategy embedded in day-to-day actions instead of side car calls and emails.
Multiple SAP systems? Simplement pulls the data into the same place, easily, for aggregated and detailed reporting. This is the easiest way to catch exceptions – like slow moving inventory, forecast issues, master data complications, et cetera.
Get the same data to the whole audience as a first step, and make it easy to modify reports. Simplement delivers real time, row level data, from any table in SAP. Feed any target, consume in PowerBI, or Tableau, or another product.
When planners and buyers know priorities, have detailed data to act on, they will fix issues before the KPI shows a problem. The data we deliver reveals the issues and drives action. Collaborative S&OP will happen organically.
Next Step
Contact Simplement for a POC and install. Get a report in a week. Simplement can deliver lots of table data live, within weeks and extensive reports in months at the outside. Adjusting reports is one of the worst tasks. Everyone thinks: “Again?”. With Simplement, more data is a few clicks away: tables, descriptions, domains, any texts, or calculations is easily done with minimal IT effort.
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