5 points for a successful S&OP implementation

During the implementation of one of the most famous cross-functional process in different companies, we have learned from the experience several aspects that will make the transition easier for the company. Such 5 points are:

1) Start with the "S".
Tipically, a S&OP project is initiated by the Supply Chain function in the company and it makes it to be interpreted as another "supply chain project". However, the initiative will not success unless we start designing the Sales part of the planning, from the Commercial Planning to the Demand Planning. This part tends to be overlooked by the project, and indeed, it is the most important part: to achieve that Sales buys the project and be accountable for its contribution and responsibilities in it.

2) Start simple, then build up maturity.
We tend to push the whole capability (process, technology, organization) from the start. However, I have found that, in most of the cases, there is a problem of business readiness that we have to solve. So, better start simple, exercise the process, build the organization and then put technology in place. When ready, build up maturity with more advanced process and technologies and training the talent accordingly.

3) Design your S&OP with a 20-20-60 view.
What does it mean? Design the S&OP meetings and other S&OP interactions in order to cover in time: 20% past (lagging KPIs and results), 20% present (solve current issues) and 60% future (leading KPIs and what-if scenarios). The S&OP is a great process to start exercising views of "what will happen" instead of explaining "what happened". There are other meetings in the company with that objective.

4) Don´t try to boil the ocean.
It is difficult to solve all demand and supply issues in one meeting. The S&OP is not a meeting, is a process that has specific activities and deliverables every single day of the month. Try to bring to the meeting only the issues that need to be solved, and do not try to revise all SKUs in every single point of your network. Focus in KPIs and expected results, new product introductions, and the most important aspect, in how to serve better the clients at the right cost to serve, delivering or exceeding the expected profitability.

5) Connect intimately planning with execution.
A plan without the right execution is useless. Guarantee that the execution process (sales execution, manufacturing, distribution, transportation, etc) are aligned to deliver the plan. Also, that any variation between plan and execution is recorded, analyzed and fedback to the planning process. If not, the plan accuraccy will not improve, and the expected benefits for the process will not come.