How to Make Your S&OP Process More Successful
- Establish an inter-disciplinary marketing, sales, finance and operations team to manage the process and support it with the right metrics. Increase collaboration with key customers to drive to a collaborative single demand forecast. Finance teams need to play a more important role in Integrated Business Planning processes.
- Integrate the sales revenue planning process with the demand planning process — integrate the customer, supplier and internal systems into the process.
- Move toward supply and demand shaping. Look into incentives, promotions and other causal events to shape demand. Look into profit optimized sourcing of supply and optimal inventory allocation to shape the supply.
- Set up financial metrics like working capital, gross margin in addition to the operational metrics. Build closed loop analytics and performance management systems for top management.
- Invest in technology enablers that allow the institutionalization of the S&OP process with application infrastructure, security, user roles, and workflows in an enterprise environment. ERP systems and Best in Class supply chain vendors should be considered by these companies.
- Explore specialized S&OP players which bring years of domain expertise, low cost and ability to present a quick ROI. These tools often work on top of excel spreadsheets and help change the mindset of users from reactive "planning" to an Integrated Business Planning mindset.
Read more recommendations in the " Technology Strategies for Integrated Business Planning Benchmark Report " published by AberdeenGroup, which is available to the readers of the article for free.
About the Author: Nari Viswanathan serves as Research director in Aberdeen Group's Supply Chain & Logistics Practice. He specializes in order-to-delivery and S&OP processes. His research investigates the business strategies and technologies that drive cost reductions and productivity improvements for order-to-delivery processes within different industries. Viswanathan's business process and technology expertise includes demand management, manufacturing management, and demand fulfillment. He holds a masters degree in manufacturing engineering from the University of Wisconsin-Madison and a bachelor's degree in Mechanical Engineering from the Indian Institute of Technology, Madras.