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How to make S&OP work in unprecedented times…(when everyone says it never will)

Here’s how S&OP became a business star at the Consumer Health division of Merck KGaA, Darmstadt, Germany by putting people first with an under-the-radar strategy. If that sounds inverted, it is. But it’s not counterintuitive.

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This is an excerpt of the original article. It was written for the January-February 2021 edition of Supply Chain Management Review. The full article is available to current subscribers.

January-February 2021

This morning, I turned on the television and watched the first stretch-wrapped pallets of the just-authorized vaccine being loaded onto a truck at a Pfizer plant in Michigan. From there, the pallets were headed to FedEx’s logistics hub in Memphis where they would be delivered to 153 locations across the 50 states. The event was both historic and mundane: Historic in that the shipments represent the hope of a nation that in the coming months, we’ll begin to put 2020—and COVID—in the rearview mirror; mundane in that this is a scene repeated millions of times a day, without fanfare, in plants and distribution centers across the country. Two of…
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Sales and operations planning (S&OP) has a checkered storyline. Some companies use it to great advantage, improving a range of metrics from forecasting to the bottom line. Others get mixed results. Some find that S&OP doesn’t much move the needle of most any metric.

So, the question is: What is the secret to S&OP success? Certainly, there is plenty of help available from process experts to software suppliers and even a consultant or two. All too often, however, even a newly engineered S&OP still looks and feels like a bolt on. Basically, not enough changed along the way to make a difference. And we all know that the definition of insanity is: doing the same thing over and over and expecting different results.

At its essence, S&OP is all about expecting different results. And that is a highly reasonable expectation. Unless, of course, you start in the wrong place.

All too often, people focus on the process of working across departments as different as sales and marketing and manufacturing. Others zero in on the technology that makes S&OP hum. Both process and technology are critical to success here. No doubt about it. But they are not the cornerstone of building S&OP. People are. But it’s not just people with a certain supply chain profile, but people with an attitude—a business-oriented attitude.

This is not theory. I lived it when I worked at the Consumer Health division of Merck KGaA, Darmstadt, Germany. Here’s my story of how to make S&OP a resounding success in unprecedented times—and when everyone else says it will never work.

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Sorry, but your login has failed. Please recheck your login information and resubmit. If your subscription has expired, renew here.

From the January-February 2021 edition of Supply Chain Management Review.

January-February 2021

This morning, I turned on the television and watched the first stretch-wrapped pallets of the just-authorized vaccine being loaded onto a truck at a Pfizer plant in Michigan. From there, the pallets were headed to…
Browse this issue archive.
Access your online digital edition.
Download a PDF file of the January-February 2021 issue.

Sales and operations planning (S&OP) has a checkered storyline. Some companies use it to great advantage, improving a range of metrics from forecasting to the bottom line. Others get mixed results. Some find that S&OP doesn’t much move the needle of most any metric.

So, the question is: What is the secret to S&OP success? Certainly, there is plenty of help available from process experts to software suppliers and even a consultant or two. All too often, however, even a newly engineered S&OP still looks and feels like a bolt on. Basically, not enough changed along the way to make a difference. And we all know that the definition of insanity is: doing the same thing over and over and expecting different results.

At its essence, S&OP is all about expecting different results. And that is a highly reasonable expectation. Unless, of course, you start in the wrong place.

All too often, people focus on the process of working across departments as different as sales and marketing and manufacturing. Others zero in on the technology that makes S&OP hum. Both process and technology are critical to success here. No doubt about it. But they are not the cornerstone of building S&OP. People are. But it’s not just people with a certain supply chain profile, but people with an attitude—a business-oriented attitude.

This is not theory. I lived it when I worked at the Consumer Health division of Merck KGaA, Darmstadt, Germany. Here’s my story of how to make S&OP a resounding success in unprecedented times—and when everyone else says it will never work.

SC
MR

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