Disclaimer: Only those 21 years and older should continue reading. Gambling on your S&OP process doesn’t pay. If you exhibit any warning signs please call 1-800-GOT-S&OP.
Last week the IE Group held their S&OP Innovation Summit in Las Vegas, and in this case, what happens in Vegas will not stay in Vegas. A sure bet is that all participants will be taking some best practices back to their respective organizations. If there was only one take away from this conference, it was the rally call for innovation and the next generation of S&OP. What stood out with many presentations were the call outs to the volatility of today’s supply chains. You didn’t even need to talk about events like Hurricane Sandy to see the challenges of swinging demand patterns, “fruit fly” product life cycles along with supply risks that included sole sourcing, limited capacities and piracy. A theme started to emerge. S&OP needed something new as much as the Golden Nugget needed to change what looked like its original carpet. Others talked about a need for an S&OP cycle based on events and not on a calendar. This was clearly evident during a presentation entitled, “Short Cycle S&OP – How Often is Enough?” My wife had given me a similar presentation but I definitely paid attention to this one. The thought of waiting for a monthly S&OP cycle to respond to changes that regularly happened at a frequency of less than a week was not an option. S&OP is at a tipping point for much needed innovation and this thought was solidified after listening to a presentation on the evolution of S&OP. It was hard to believe but according to the presenter, the last innovation to S&OP came in the form of CPFR (Collaborative Planning, Forecasting and Replenishment) in the early 2000’s. Now, I love hearing stories of the “Rat Pack” as much as anyone but nothing new for S&OP since 2000? The message was clear; the S&OP process of today needs to be able to manage a new level of volatility, both planned and unplanned events, at a speed faster than the roller coaster at New York New York. The presentation from the folks at AMD was the first to use words like “sense and respond”, “scenario planning” and “simulation”. If I were to gamble on an S&OP process, I would place my bets on the one that had these capabilities. S&OP needs to be “change ready”. The question I now had though, what would make the next generation of S&OP a reality? The answer started to become clear during Trevor Miles’ presentation “Is an Operations Control Tower the Next Phase of S&OP/IBP”. I have to be honest; I was a bit sluggish from the night before and wasn’t really paying attention to Trevor. When he said “Control Tower” I thought he was talking about the latest Casino / Hotel going up in Vegas. He described it as “one place for everything”, “something for everyone”, “an exceptional customer and user experience”. After one more espresso I realized Trevor was describing the next evolution of S&OP. If an S&OP process was to be change ready, all data to support the process needed to be in one place, everyone who participated in the process needed to go to one place, and anyone could easily get visibility to the current state, understand the impact of any event, planned or unplanned, and test solutions for course correction at a speed currently unimaginable by many organizations. I decided I needed to find a place in Vegas where I could just be by myself and reflect on my S&OP epiphany. The only place I could find was zip-lining down Fremont Street. In those 20 seconds of peaceful flight, I realized that the Control Tower should be the next innovation on the S&OP evolution chart. It had everything an S&OP process would need to be change ready. The only question now, what will that next evolution of S&OP be known as? I’m placing my bets on Control Tower. Where is your money going?