Sales & operations planning, an intensive but worthwhile journey

On the 26th of November EyeOn hosted its 8th network event for the Food & FMCG industry at Croy Castle. A record number of 35 participating companies were present to discuss the hot topic of Sales & operations planning.

Has the current economic downturn fueled the  enormous exposure S&OP has been getting and is this justified?  Is S&OP an effective instrument, especially to cope with a crisis? From the discussions during the day it became clear that S&OP really delivers,  but there is no one-size-fits- all approach and the  maturity level companies have achieved differ strongly. Despite efforts to install a matured process,  a lot of companies only realize demand and supply balancing in terms of volume (as over 50% of the participating companies are still doing), while other companies are able to translate volume into value at all times, creating a pro-active financial driven supply chain.

Presentations from Mars Food Europe,  Leaf International and EyeOn gave clear insights in the struggles and successes in their S&OP processes and addressed questions like:

• How can I involve finance in my S&OP process, while evolving from tactical S&OP towards integrated S&OP?
• How do I get my staff committed and enthusiastic to start the S&OP journey, taking into account the time and effort involved?
• Can I really get to a one-number-plan or will I always be confronted with a financial forecast and an operations outlook?
• What does a ”most admired”  S&OP process look like and how can I achieve this?
• How can I find the proper balance between a pragmatic and academic approach in my S&OP process and what do I need for my company?

It was commonly agreed that S&OP is a very useful instrument to steer the business. Particularly in volatile circumstances, S&OP enables companies to quicker react on changing market conditions, but this requires increasing the frequency of the process. Some of the critical success factors that were identified in an EyeOn benchmark study and also confirmed during the day:

• Just start the S&OP process and evolve step-by-step
• Get top management support and staff committed for the S&OP journey
• Create the right set of KPI’s , not only to monitor the output of the process but also the process itself
• Stay away from too much detail
• Make it simple, transparent and fact-based
• Focus on decision-taking

At the end of the day, participants were able to take home some key learnings from each other and could compare themselves with their peers in terms of maturity, successes and enablers to install a successful S&OP process within their own company.  S&OP is a worthwhile journey, but it is a long trip with a lot of struggles to overcome in the process.