Different personality types cause friction in S&OP

Volumes of books have been written about Sales & Operations Planning (S&OP). Almost all those books deal with processes and systems, while the human factor remains underexposed. During Webinar Wednesday, Jan Kraaijeveld of Slimstock, in a conversation with talkshow host Martijn Lofvers of Supply Chain Media, zooms in on this very factor. ‘What is little discussed is how participants should behave during the S&OP process.’

By Marcel te Lindert

Many conversations about S&OP are about processes or technology, but according to Jan Kraaijeveld, it’s all about the people at the table. ‘If you want to work towards a common goal as a company, you have to create the plan for it together. S&OP is teamwork,’ says Slimstock’s sales director as the screen shows an illustration of a poker table with various officials. One of them is a sweating salesman who dares not admit that he has no idea how much he thinks he will sell. ‘The hardest thing is to put all your cards on the table without any restraint. However, this is necessary to operate as one team and reach agreement together,’ Kraaijeveld argues.

Different personality types

Typically, the S&OP process counts a four-week cycle. The first week is devoted to product review, where changes in the product portfolio are scrutinised. In the second week, demand review follows, identifying expected demand. Then, during supply review, we check whether sufficient capacity is available to meet demand. The final step is financial review, where the financial impact of decisions is analysed and discussed. ‘What makes this process so difficult is that during each stage, a different department is in the lead,’ reports Martijn Lofvers, chief trendwatcher of Supply Chain Media and host of the webinar.

Lofvers explains that product review is the domain of marketing and R&D, while sales is responsible for demand review. During supply review, the supply chain department is in charge, while finance is last. ‘Those are totally different people who think and act in different ways,’ says Lofvers, who refers to the Myers-Briggs Type Indicator (MBTI) that is widely used to map the different personality types within a team. ‘Those different personality types are the reason why companies still struggle with S&OP.’

Yellow, red, green or blue

In the Myers-Briggs indicator, each personality type has its own colour. Applying those colours to S&OP, product review turns yellow. ‘This colour represents intuition. People in marketing and R&D are the researchers who rely partly on their gut feeling. Red is the colour of sales people, the extroverts who like to have a cup of coffee with customers and keep their ear to the ground. Green is the colour of supply chain professionals who like to keep an overview and monitor stability. Finally, blue is typically the colour of financial analysts,’ Lofvers explains.

The idea of applying the Myers-Briggs colours to the departments involved in the S&OP process came about following a roundtable discussion with Slimstock customers. ‘Of course, not everyone can be pushed exactly into one of these boxes,’ agrees Kraaijeveld. But these colours show why friction sometimes arises at the S&OP table and why different people sometimes pursue different goals. And why we should cherish all these different personalities, because we all need their qualities.’

Science versus art

How differently people think and act becomes clear during the S&OP Roulette game introduced by Supply Chain Media at the S&OP Flavour Day congress in November 2024. In this game, all participants are given a limited number of chips, which they may divide at their discretion among the topics they want to bet on. In doing so, they can choose from sixteen topics, spread across the four process steps of product review, demand review, supply review and financial review. ‘When you play that with your own team, you see how everyone bets differently. Then a good conversation naturally develops’, says Lofvers.

During an earlier webinar, Slimstock already made the distinction between science and art. ‘Slimstock, like many other software vendors, is in the science corner. As supply chain professionals, we can recognise patterns, formulate rules, make calculations, generate predictions and reason everything out,’ Kraaijeveld argues. ‘But sitting opposite you are people from sales and marketing who mostly rely on intuition, emotion and personal beliefs. If a marketer wants to introduce a new product, a supply chain professional will immediately ask for a forecast. In a business, you need both, but it is good to realise the differences between them.’

Key behaviour indicators

Kraaijeveld recalls the purpose of S&OP: to create a common plan to improve business performance and profitability. ‘Whether you are doing it for the shareholders or the family that owns the company: we do all the work for a reason. That is why it is good to use insights from all stakeholders, from sales, supply chain and the finance department. Talk to each other and try to understand each other’s points of view. It doesn’t work if you just keep opposing each other and don’t seek rapprochement.’

When it comes to S&OP, much is said about the importance of Key Performance Indicators (KPIs). What is little discussed is how people should behave in the S&OP process. ‘Perhaps it is time to define Key Behaviour Indicators (KBIs),’ believes Kraaijeveld, who borrowed the term from the work of Danish professor Jan Stentoft. He researched how participants in the S&OP process communicate with each other and prepare for the S&OP meeting. ‘Explain how people should behave.’

Not welcome

Kraaijeveld describes KBIs at three levels. At the individual level, it is about how employees contribute to discussions and whether they are mentally present. In conversations between two people, it is important to be respectful of each other’s views and sometimes think before answering. In consultations, it is important to be present on time, but of course also to use the right tone and do your best to solve problems rather than escalate them. Kraaijeveld: ‘I know the example of a company in which the process owner strictly monitors this. Anyone who has not prepared is not welcome at the S&OP meeting. Anyone who is not motivated is better off staying away.’