S&OP Made Good: The Importance of Investing in People

This is an excerpt of the original article. It was written for the January-February 2016 edition of Supply Chain Management Review. The full article is available to current subscribers.

January-February 2016

It’s a new year. Most of us will have new budgets to meet and new expectations for the performance of our supply chains. Many will look to best practices from industry leaders to improve our operations. But, are best practices really the “best” way to go? As you think about 2016, I hope you ask the question: What better practices can I adopt for my supply chain?

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Here’s an uncomfortable question: After 30 years of talking about sales and operations planning (S&OP), can we truly say it’s working?

S&OP is a terrific idea in principle. When it’s done right, it’s great in practice too. But the trouble is, it’s not often done right. Here’s how I know that.

Recently, my company, together with the trade organization Eye for Transport (EFT), surveyed 131 supply chain executives, mostly from large manufacturers, to explore their S&OP experiences. At first, the evidence was reassuring: 85 percent of respondents claimed to be following S&OP with discipline “somewhat to completely.” But answers to the follow-on questions weren’t so encouraging: Almost 40 percent said that they thought a monthly meeting was enough to qualify as S&OP, and a staggering 94 percent were making crucial supply chain decisions outside the process. (See Exhibit 1.) Not good.

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