Building Blocks for Successful S&OP

This is an excerpt of the original article. It was written for the November 2013 edition of Supply Chain Management Review. The full article is available to current subscribers.

November 2013

Sales & Operations Planning is both a science and an art. Like any science, it relies on principles, rules, methodology, and specific measurable outcomes. But an S&OP implementation also calls for creative, incremental thoughts to address challenges.

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Since the birth of Sales & Operations Planning (S&OP) in the late 1970s, volumes of text have been written about the subject and hundreds of organizations have embarked on implementing S&OP. It has been referred to by a number of names, including Executive S&OP and, more recently, as Integrated Business Planning (IBP).

Still, four decades later, organizations struggle to realize the promise of S&OP. In 2010, for instance, Gartner reported that about 70 percent of global organizations are in Stage 1 or Stage 2 of the four-stage S&OP Maturity Model. Most organizations continue to acknowledge the need for a step-change improvement to their S&OP process. Why then do organizations find it arduous to achieve sustained success from S&OP?

• Do organizations adopt S&OP as a fad, start with much fanfare but fail to support it?
• Is it lack of perseverance or discipline? Misaligned KPI’s or silo-driven behaviors?
• Do they invest in training while embedding the process?

Lots of rich, intellectual content on S&OP presents valuable insights on strategies to succeed in this game-plan. Yet, there appears to be systemic reasons why so many organizations have had limited success.

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