S&OP: Power To The People

“Here's an uncomfortable question: After thirty years of talking about sales & operations planning (S&OP), can we truly say its working?”

That's the question Hugh Williams, the Managing Director of Hughenden Consulting, poses at the beginning of S&OP Made Good: The Importance of Investing In People, one of the features in the January 2016 issue of SCMR.

The crux of his argument is this: Everyone says that S&OP is a combination of people, process, and technology. The question is, how do most companies allocate their time, efforts, and resources across those three buckets.

“Enough material has been written about the S&OP process to sink an ocean liner!” he writes. “We've also got technology in abundance. If you aren't getting enough cold calls from supply chain software vendors to believe this, a quick search online for ‘supply chain planning software’ reveals more than 40 million results, among which are links to thousands of vendors, industry reports, and articles.”

Why then, do many companies end up with such limited success? “I contend it's a lack of focus on the people!” Williams writes.

To buttress his point, Williams offers two charts from a survey of 131 supply chain executives, mostly from large manufacturers, his firm conducted with the trade organization Eye for Transport (EFT).

First, roughly 85 percent of respondents claimed to be following S&OP with discipline “somewhat to “completely.” However, almost 40 percent said 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.

Second, most companies are investing roughly 70 percent of their budget on technology and 20 percent on process. A mere 10 percent goes to people.

Williams' conclusion: “In practice, this means they roll out new technology. They bring in consultants to design processes and sometimes integrate these processes into the technology. The education budget is used mainly to train people on the new technologies and processes and to deliver one-way “communications” to tell people that S&OP is happening.”

Is your company investing in people in your S&OP process? Or, like the executives surveyed by Williams, is 90% of the budget going to technology and process, with people as an after thought?

Let me know about it [email protected]. Or drop a line to Williams at [email protected].

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