Do you need executive involvement in S&OP?

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I came across this article by Colleen Crum, a principle with Oliver Wight Americas.  In it, she outlines a compelling argument about how critical leadership involvement is to S&OP.    I couldn’t agree more. Over the past few years, I’ve talked to many people who have had varying degrees of success implementing S&OP.  One theme was consistent, however,  the successful implementations had full senior management support and involvement.  As Colleen points out in her article,

“[success].. cannot happen without senior leadership involvement in the process. Involvement means just that - active, high-profile involvement, and not just lip service support”.   

One person I met at a S&OP conference a few years ago told me about the struggle they were having implementing S&OP at their company.  They were trying to implement S&OP as a “grass roots” movement without executive involvement.  Their approach was to try to implement S&OP, prove success to the executives and try to grow the process organically.   They’d been at it for the better part of a year, but still hadn’t broken through.  I admire their dedication but I’m afraid that they won’t be successful. Why is leadership involvement so important?  Let’s think about what S&OP is about.  It’s a process that aligns all parts of company into a common direction.  Sometimes, the direction that is best for the company may not be favourable for a given group.  Sometimes, it takes the GM (or CEO, or president (insert your leader here)) to settle a disagreement.  Without that arbiter, without someone to make that final decision, it can be very difficult to get results from your S&OP meetings. Once your executive team is involved how do you keep them involved?  Above all, be prepared.  The executive team is busy and their time is very valuable.  The executive S&OP meeting should be a review of performance metrics and a blessing of the new S&OP plan.  If your meeting takes more than an hour you are at risk of losing executive involvement.  If there are issues, have the issues clearly articulated and have alternative solutions ready for the meeting.  The pre-sales and ops meeting is the place where the tradeoffs are made, alternatives evaluated and preferred solutions prepared for the executive meeting. In my days putting together the S&OP plan, there were some months where we had multiple pre-sales and ops meetings before we presented to the executive team. I’ve had the privilege of being involved in the sales and operations activities at a company where the executive team was truly involved in the process.  When a major long term material shortage threatened our supply chain, the sales and operations planning process was the tool used to navigate that challenge.  When a major customer’s union went threatened to strike (we had visibility to the strike risk several months in advance), sales and operations planning was the tool used manage that risk.  In fact, sales and operations planning is the tool that managed that company. Would you call your S&OP implementation a success?  What factors  would you contribute to the success of your S&OP implementation?  Comment back and let us know!

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