K.I.S.S. Your Complicated S&OP GoodbyeS&OP
Is your S&OP process too complicated? If so it’s time to KISS that headache good-bye. A sales and operations planning (S&OP) process should simplify and streamline the company, not add additional complications. If this is not your reality, it’s time to learn how to KISS complexity good-bye.
Right now, you may be thinking, “Yeah right, simple and S&OP don’t go together.” Well, that's just not true.
If you take the right approach and don’t get caught in the weeds, S&OP can truly be simple. To start, let’s push aside the more technical issues that companies face and look at the high-level process.
Building the S&OP Process
There is never just one way to run your S&OP process. Each company will have its own unique way of effectively running their S&OP process to meet their needs. It’s important to not get bogged down on doing it the same way as an existing model. Just because one method is successful for one company does not mean it will fit your company.
So how do you simplify an S&OP process? Think about the most basic essentials to S&OP and start there.
Begin the process design by identifying four components:
- Demand Planning
- Supply Planning
- Financial Consolidation and Analysis
- Executive Review
Once these steps are in place, you have an outline to build the rest of the process around.
Build Your S&OP
Once you have established the core components, take a deeper dive into the business. Flesh out each component. Ensure everything is communicated simply. Make your language simple to understand at all levels of the company. Keep it super simple. Identify any exceptions that will occur inside the process. This is where you begin to lay out, inside of your process, a procedural flow.
Top 10 Ideas for a Smoother and Simpler S&OP Process
While there can be numerous other components that may be added to the overall S&OP process (tailored to your business), here are eight simple ways to keep the process running smoothly:
- Each of the four components should have a defined set of business rules.
- Keep a consistent schedule of each S&OP cycle. When possible, book the meetings a year out so the stakeholders have it locked into their calendars.
- Keep a set agenda for each type of meeting in the process. The agenda should stay the same each cycle. Generalize the agenda template. This allows specific topics for individual meetings to be discussed under one of the generalized sections.
- Send out meeting minutes promptly after the meeting has ended. Keep the information fresh on everyone’s mind by following up at the end of the business day or early the following day.
- Send out the detailed agenda and any presentations at least one day before the meeting. If there are any major topics for the meeting that may cause problems or concerns, it’s a good idea to speak to individual stakeholders beforehand. This allows them to come to the meeting prepared and (hopefully) deter unnecessary confusion.
- If there is an action item in the meeting, ensure someone is assigned responsibility with clear due dates.
- Keep strict deadlines throughout the process. This allows you to quickly identify the gaps throughout the business. When the deadline is missed it gives a direct line for the executive team or managers to see where real issues lie and how to fix them. Don’t get caught in the weeds. Keep it super simple by handling the small issues while they are still small.
- When you implement a strict process, make certain everyone understands the how and why. Keep your language simple and limit special terminology; use words that will be understood by everyone in your company.
- The biggest issues that cause chaos are in how to handle exceptions. Include some type of exception management process where applicable. There will always be an exception to the rule, plan for it.
- Keep the meetings short and organized by following an agenda. Avoid the headaches of getting off topic, which always leads to bigger problems. If all else fails take a step back and re-evaluate how your process is running, and if something seems useless and time consuming, find out its reason for being there and decide if it's actually necessary.
At the end of the day if your S&OP process is a complicated mess, take full ownership of it. Decide here and now to KISS the complication farewell. Streamline the process, communicate clearly, and discover the value of a well-run S&OP process.