Pour DIAGMA, le S&OP (Sales & Operations Planning) est un processus de pilotage et d’accélération de la croissance, ainsi que de la rentabilité des entreprises. Notre cabinet a développé une approche S&OP originale et personnalisable articulée autour de 5 piliers. Ils vont de la définition des stratégies Supply Chain et des objectifs, à la mise en œuvre rapide du processus. Voici le 2eme volet de notre démarche, sur l’efficacité du processus S&OP lui-même.
How can you make your S&OP more efficient?
In the previous article on the Strategy pillar, we stressed the need for coherence between business strategy and Supply Chain strategy. The associated KPIs (sales, EBITDA, cash, service rates, etc.) become the targets to be achieved through the S&OP process.
In the following lines, we’ll take a closer look at the S&OP process itself and how to make it more efficient.
From the 5 steps of the “standard” S&OP process …
S&OP is a process based on cross-functional collaboration. It is strong, structured and sequenced around 5 monthly sessions:
- Products Portfolio Review,
- Demand Review,
- Supply Review,
- Pré Executive Review,
- Executive Review.
This process enables you to plan ahead in terms of budget and objectives. But above all, it’s where you develop business-accelerating scenarios, with an environmental component if you wish, and compare them to choose the most suitable ones. The aim is to boost your results and meet or exceed your objectives and/or budget.
… to an S&OP process tailored to your business
Numerous books detail the S&OP process and how to implement it. However, to move from theory to practice, you need to adapt this process to your company’s needs.
Making your S&OP effective requires detailed observation and understanding of several aspects:
Business and Supply Chain governance,
- industrial and logistics footprint,
- role organization charts,
- corporate culture.
This is the only way to define an S&OP tailored to your needs. We also recommend incorporating the lessons learned from benchmarking the practices of the best-performing companies in the S&OP field.
Example of how to adapt the S&OP process
How to structure the Executive Meeting in a company where the European Region/Division (and not the countries) is in charge of S&OP? One solution is to sequence 3 distinct and complementary sessions:
- An Executive Review at country level,
- A 45-minute exchange session between each country and the Region. The aim is to take stock of the country’s business health. And also to share with the Region any needs for additional funding to accelerate business. Remember, it’s the Region that holds the purse strings.
- An Executive Review at Regional level, which consolidates all the countries’ needs and rapidly selects the best actions to finance.
A less cumbersome process than it seems
Is the S&OP process cumbersome and resource-intensive? Quite the contrary. It actually makes the company more efficient!
In fact, when properly adapted and organized, S&OP eliminates the need for numerous formal and informal alignment meetings between different functions in the countries and the Region. Similarly, it eliminates improvised one-to-one interactions over a cigarette or a cup of coffee (a real-life experience!), which are never accounted for.
So, at a lower operating cost for the organization, S&OP brings out the best business scenarios. What’s more, it facilitates informed, transparent decision-making by the management teams in charge of the profit and loss statement (P&L).
A unifying, structuring and mobilizing process
S&OP is a unifying, structuring and mobilizing process for the entire organization, when the teams feed back the best business ideas, and in return, the Executive Board reports back to the teams on its decisions, encouraging action and implementation.
In the next article, we’ll look at the importance of robust business processes.
How is your business management process structured? How efficient is your S&OP process?
I’d be delighted to talk to you about it!
Olivier Gautier
Manager at DIAGMA
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