Learning by doing in S&OP takes forever

When scanning through a whole set of recent S&OP publications, I noticed that the vast majority were focused either on processes and systems or on the creation of buy-in. Two important aspects, obviously, but it struck me that a third essential aspect, S&OP capability development, was hardly mentioned at all. For any process to work well, the people running it need to have the right skills and competencies, and S&OP is no exception. In this blog I will argue why competency development in S&OP may not come automatically and suggest how this can be addressed.

By Hans van der Drift

Competencies and skills can be developed. The 70-20-10 model states that people learn 70% by doing, 20% from colleagues and only 10% through formal learning. This means that for 90% of employee learning, companies rely on formal and informal feedback loops. There are three main reasons why this is inherently more difficult in S&OP than in many other processes.

Firstly, in most companies, S&OP follows a monthly cycle, so learning by doing will always be slow. People’s attention can easily become consumed by new initiatives and day-to-day firefighting. S&OP-related learning by doing therefore requires above-average discipline and stamina. Secondly, S&OP has a planning horizon of typically 3-18 months. The impact of decisions made in S&OP may only become apparent after many, many months – which means that learning by doing can seemingly take forever. Thirdly and finally, S&OP is a cross-functional process that helps to support the company’s strategy. A decision made by Supply Chain can impact sales-related and financial KPIs, and vice versa. This might even be clear at the time of decision-making, but if it’s not, how often do companies make the link afterwards and evaluate it? In such cases, S&OP learning by doing may not happen at all.

Magic Circle

The ‘Magic Circle’ model (Jan Klabbers, The Magic Circle: Principles of Gaming & Simulation)

In order to address these inherent difficulties, at Involvation we have adopted the ‘Magic Circle’ model (Jan Klabbers, The Magic Circle: Principles of Gaming & Simulation) and we use simulations and serious gaming. The Magic Circle is an important concept which exploits the fact that most people learn more from experience than from listening or reading. The reflection and conceptualization steps make people think rather than passively learn, thus driving deep learning. When the facilitators are S&OP experts, they can add expertise and best practices to the learning cycles and help participants translate the new insights to their real-life work environments.

By introducing a realistic and simulated environment, we can shorten the feedback loops from many months to just a few hours. By applying the Magic Circle model, we can close the feedback loops, even when they are cross-functional and relate to long-term strategies. In other words, by using simulations we can finally achieve real learning by doing, even in S&OP.

Is serious gaming the ‘be-all and end-all’ of S&OP learning? Obviously not; S&OP is a complex process that requires a blend of formal learning, coaching, PDCA cycles, etc. But a representative simulation offers a very powerful platform to really boost the S&OP competencies in your company. And last but not least, it can also make S&OP learning fun – which is not unimportant if you’re looking for buy-in as well!

Hans van der Drift is partner at Involvation