Are your Sales and Operations (S&OP) meetings and process destined to fail? It happens more often than you might think. Like when S&OP is a one-off process or is simply not as strategic as it could be. Failure even occurs when metrics and incentives are in conflict. These obstacles are largely related to a general misunderstanding of the actual process, its purpose, and lack of company alignment.
Luckily, there are three universal questions you can ask in preparation—the answers to which can make a huge difference when it comes to achieving alignment across your manufacturing business.
Question 1: How do we ensure executive buy-in?
Ideally, your executive team should have a basic understanding of the purpose of sales and operations planning (S&OP) and how it affects their positions. But they also need to know that it is an iterative process that determines the optimum level of manufacturing output, and requires top-down executive engagement to be successful. Make sure that your executive team understands the value of alignment because without it, things can get complicated real fast. Executives need to buy in on a cross-functional consensus-based plan for a holistic enterprise-wide plan. Be prepared to show proof of processes that work.
Question 2: Where do we want to go?
Examine your company’s short and long term goals, taking into account if there is exponential growth in the future. You’ll want to make sure the company is prepared for that growth too—which means putting the right people and tactics in place. Combining strategic input from multiple teams including sales, marketing, engineering, operations, and finance in a formal sales and operations planning structure will ensure that you’ve got all perspectives covered. Remember, S&OP is iterative so you’ll need to schedule status checks and updates as necessary. Your S&OP meetings and process must have clearly defined and universally accepted short and long term goals and objectives—the only way to effectively align all facets of the company.
Question 3: Are we on the right track to achieving our goals?
Does your company track performance? If so, you’ll need to ensure that you are using the right metrics with meaningful information that tells a story leading to a goal. You’ll also need to trust the integrity of those metrics. Metrics provide the confidence cross-functional teams need to ensure that your company is on the right path toward achieving both long and short term goals. Your S&OP meetings and process must be data driven so you can track progress and continually improve. Managing S&OP in an integrated environment means you get daily updates from your ERP system and your plan is automatically updated for unaccounted/unplanned demand/supply fluctuations.
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For more information on how S&OP balances growth, cost, inventory, and customer service levels for your manufacturing enterprise, download the datasheet: Sales and Operations Planning.