S&OP motivation

blockchain belief

Why is sales & operations planning (S&OP) such a difficult decision-making process? How hard can it be to hold a product review, then a demand review, a supply review and a business review in the four consecutive weeks of a monthly cycle? A while back, a supply chain director who is responsible for the S&OP process with a multinational in the food industry confided in me that their process was going through a rough patch. A couple of years ago, an extremely reputable consultancy firm had provided the company with extensive S&OP training and had subsequently implemented the process successfully. But a couple of key people who had undergone the training had since left the company, leaving behind a less smooth-running process.

At Supply Chain Media we collaborated with Niels van Hove, who spent many years working in Australia as a supply chain manager responsible for S&OP in practice and is now a consultant specialized in this field, to produce a checklist for S&OP effectiveness. It incorporates a well-known sport psychologist’s insights into mental toughness. We then asked various supply chain managers to complete the checklist. This revealed not only that companies with an effective S&OP process focus unwaveringly on the long term, but also that they address the mindset and behaviour of the S&OP participants.

No fixed finish line

The monthly cycle of S&OP meetings is like a relay race with a team of four runners who, at the end of their lap (i.e. week), hand over the baton containing the necessary data and the decisions to be made. The problem is that there is no fixed finish line for the athletes to focus on; it is continually extended and remains eighteen months away in the future. At the end of the month, it’s not entirely clear whether the budgeted annual target will actually be achieved, and that is of course the ultimate goal of S&OP. So when experienced and highly trained runners drop out of the race, as happened at the multinational mentioned above, the relay will become increasingly difficult and the athletes will quite literally run out of motivation.

There is plenty of S&OP software on the market, of course, and it can definitely help to gather and analyse the data required for the process, but it would be nice if it would also help to encourage and reassure these relay runners during their laps. In my opinion, the software still lacks that motivational functionality.

Martijn Lofvers, Chief Trendwatcher
martijn.lofvers@supplychainmedia.nl