Want to find out the greatest success factor in S&OP?

What do you need to have an effective one?

Watch the full video below as we discuss what makes the S&OP work.

 

 

#1 Success Factor for S&OP

 

Rob: If you’re involved in S&OP, do you know what the number one success factor is to making sure it’s really effective? That’s what we’re going to be talking about!
So this week I welcome back Steven Thacker, one of our directors who’s a specialist in S&OP. Welcome, Steven!

Steven: Thank you!

Rob: And you’re going to tell us this is going to be very enlightening. I know! What is the number one success factor to making sure that your S&OP is effective?

Steven: It’s a shame we couldn’t have done a survey prior to this, isn’t it? To see what people feeling as to what the question is. So after years of implementing S&OP and also doing what we call S&OP renovations, which is where companies have a process, but it needs some help and needs renovating.

We’ve come to the conclusion and we’re not alone and you can also look at this from various other experts in this area. There is one, number one success factor in doing (A) ensuring A that your process is delivering what it’s supposed to, and secondly that it’s sustainable.

 

You Need a Converted MD

 

And the key success factor without any exception is you need and there’s a number of different ways we can use here, but you need a converted MD or an enthusiastic MD. Careful with the words because just tacit approval for S&OP is not going to cut it in the long term. And even if it does, it’s not going to deliver the maximum benefit than S&OP needs to. So it needs a converted or enthusiastic MD in order to (A) make it effective and (B) to make sure it’s sustainable.

 

And you may very well ask well, why? Why is that? And the answers are for a number of reasons:

 

Reason #1:

The MD is the only one that has the span of control over all executives, and all functions in the business to ensure compliance. If S&OP is owned by or run by or seen to be owned by or seemed to be run by in the business for example, supply chain as sometimes happens. Supply chain don’t have any authority or any jurisdiction to be able to say to sales, “We need you to make a change in your processes or in your policies in customer service”. It can’t happen. Certainly the analytical grunt very often resides in supply chain.

So demand plans sometimes will reside in supply chain function along with supply plans. But nobody can make the other structural change or the other key factoral changes in the business, the cultural changes, for example, except for the MD. He’s the only one that has the span of control. So that’s reason number one.

 

Reason #2:

It’s related to Isaac Newton, strangely. So Isaac Newton proclaimed what he called the second law of thermodynamics. Which you may be thinking what the heck’s physics got to do with S&OP? But the second law of thermodynamics is that in short form, unless you put heat or energy into something, the natural course of the universe is that it will cool down or it will degrade. We all experience that, we all know that. So unless you have an MD that’s complying with the second law of thermodynamics and putting effort and energy into supporting and sustaining the S&OP process, the law of the universe will say that the quality of the meetings will ultimately degrade.

So we not only need MD who understands SOP and what the key success factors are, but also is the one in the business who’s the custodian for ensuring that those standards, the things that make S&OP different from any other management meeting are maintained and he’s the one that’s ultimately responsible for that.

 

Rob: Well, I bet that came as a surprise to a few people, so I would love to hear your comments down below. Your CEO, your MD, he or she, do they support the process. Are they passionate about it? Are they active? Are they putting heat into the process? Because as Steven has explained, if they’re not, it’s gonna kind of not go anywhere pretty fast.

 

Related articles on this topic have appeared throughout our website, check them out:

 

 

Contact Rob O'Byrne
Best Regards,
Rob O’Byrne
Email: [email protected]
Phone: +61 417 417 307
Share This