The 6th element of our approach focuses on the importance of rapid S&OP implementation on the ground. It is better to practice and learn as you go, rather than waiting to design the perfect process before taking action.

We emphasize the following four points:

Engage the Executive Management and clarify governance

• Implementing an S&OP process requires strong leadership to drive change. The CEO must promote a shared vision and align all teams around the S&OP objectives.
• Moreover, defining clear governance with well-assigned roles and responsibilities is crucial for ensuring rapid execution. In this regard, the RACI matrix is a useful tool.

Start with a simple process

To avoid extended implementation timelines, it is best to begin with a minimalist yet functional S&OP process. In this case, focus on the most critical elements for the business. For example, it might involve aligning supply and demand in a basic manner to support growth. The number of participants will be limited (it’s essential to include the CEO!). The data will be simple.

Thus, the goal is to project volumes within the scope of the current year’s budget. You will use an easily accessible algorithm and capacity data for the same time horizon. And you will position yourself against the budget. The next step is to make decisions regarding demand, avoiding additional volumes (e.g., promotions) on under-capacity lines.

This approach allows you to quickly test the process and obtain initial results. It can then be gradually adjusted and expanded to include more advanced activities. For example, you could consider financially-driven business management. You can also build more accurate demand forecasts for a horizon longer than 12 months…

Use agile software solutions

• To quickly implement an S&OP process, it is essential to choose flexible S&OP tools. These tools should also be easily integrable with your existing systems, without requiring lengthy development efforts. Of course, Excel appears to be the most obvious solution.

• You should also assess how existing tools within the company can support the S&OP process. Sometimes, features that are useful for the process have not yet been fully utilized (e.g., forecast valuation in € within the APS…). It may be worth activating these features at a low cost.

As the S&OP matures, it will be time to consider more comprehensive solutions tailored to a true management process. APS or EPM systems will help accelerate revenue growth and profitability within 18-24 months. We refer you to our post on Information Systems: SUPPORT YOUR S&OP WITH A ROBUST INFORMATION SYSTEM!

Iterative approach, continuous training, and health check

• Afterward, you can adopt an iterative approach where each cycle of the process is measured using an evaluation grid. This will include the meeting content (agenda, KPI review, minutes…). It will also consider cultural elements: Were decisions made? Were disagreements resolved? The aim is to adjust and refine practices.
• At the same time, you must ensure that teams are properly trained. You also need to verify that they are committed to the S&OP process and adopt it as a key lever for their own performance. This guarantees rapid skill development and greater efficiency. It also improves the quality of decisions.
• Finally, it is important to conduct an annual health check of the process with key stakeholders. It is essential to include the CEO, as they are the final customer of the S&OP! The goal is to build a robust improvement plan.

Four key levers

In conclusion, successfully implementing a rapid S&OP process relies on four key levers:

• Engaged leadership with clear governance,

• A simple and prioritized process from the start,

• Agile technological solutions,

• An iterative approach to ensure long-term improvement and performance.

This is the final part of our 6-article series on S&OP.

And for you, what are the key points for quickly implementing an effective S&OP?

A PROJECT? A QUESTION?

CONTACT-US !

Olivier Gautier
Director at DIAGMA

The previous 5 parts of our series on S&OP:

ALIGN YOUR S&OP WITH YOUR BUSINESS STRATEGY

BUILD A MORE EFFICIENT S&OP PROCESS

FEED YOUR S&OP WITH EFFECTIVE BUSINESS PROCESSES 

SUPPORT YOUR S&OP WITH A ROBUST INFORMATION SYSTEM 

WIN WITH A COLLABORATIVE S&OP