by Greg West, Farthing West Chief Brilliance Officer
The great rewards from S&OP / IBP come through collaborative processes and focused planning. Forging a company culture that is unified in purpose. A company culture moving forward positively to achieve a common strategic direction.
The following is a guide to developing and improving your S&OP process. I have broken it into 4 sections. The first three sections are about People, Process and Technology, while the fourth is the importance of being Future Oriented.
In this blog, I will highlight the importance of the first two steps which will be people focus.
1. Ensure the right people are in the room
While it sounds obvious, it is important to ensure that the right people are in the room.
Make sure you have the right people involved with the right responsibilities, the right capabilities and the appropriate seniority and inclination to make decisions.
S&OP / IBP needs the buy in of senior management. Always reserve a permanent “seat” at the table for the leadership. CEO and board sponsorship sends a clear message to the business on the strategic importance of the process.
Avoid extra sign off wherever possible, to avoid additional delays.
Plan the meeting’s rhythm and associated preparation with an eye to who is responsible, who is accountable, who needs to contribute and who needs to be informed. This thoughtful approach leads to better work design.
2. Provide strong leadership while promoting positive tension
The heart of S&OP is collaborative thinking where decisions are made for the overall good of the business and the customer. it is important to ensure that the reward system is structured to promote collaboration. Shared KPI’s provide a tangible focus for cross functional co-operation. To achieve this outcome, it is important to formalise individual responsibilities and align KPIs to avoid competition.
There is a fine balancing act between encourage openness and healthy questioning and the need for agreement and resolution.
Creativity and resilience comes from an environment where there is enough trust within the group to disagree with each other and use data to openly discuss the impact of decisions on the whole business and the customer.
Strong leadership is required to develop this culture of positive tension.
Always be vigilant to recognise behaviours which threaten to either derail progress or discourage other participants. Red card anyone who displays this behaviour.
When there is trust within the group you develop a culture of optimism and creativity and S&OP then unifies the organisation in a common purpose.
To be continued…