APICS is the premier professional association for supply chain management.

Getting Tough with S&OP

By Jenny Schneider | November/December 2013 | 23 | 6

You cannot just implement S&OP, clap your hands, and assume the process is going to be effective. It is important to establish clear rules that everyone understands, knows, and follows.Six rules that should never be broken

Implementing a sales and operations planning(S&OP) process is hard work; sustaining it and keeping the meetings effective are even more difficult—and far more important. You cannot just implement S&OP, clap your hands, and assume the process is going to be effective.

It is important to establish clear rules that everyone understands, knows, and follows. Keep these guidelines to a select few. If you have too many, then they are easily forgotten. I recommend the following. In my experience, if any of these six rules is ignored, it can trigger a series of harmful events and potential fractures in the process.

1. The president or chief executive officer (CEO) should own the S&OP process. Any initiative is more successful when top management is involved. For S&OP, it is essential. Make sure executives are asking questions, challenging the answers, identifying areas of weaknesses, promoting healthy debate, and holding people accountable for countermeasures. Many times, the number-one reason S&OP fails is because of lack of ownership. If this is the case with your company’s process, these questions can help you determine the primary reasons:

  • Do top managers attend S&OP executive meetings and engage attendees? 
  • Do they talk about S&OP outside of the meetings? 
  • Do they stay engaged when a decision needs to be made, acting as the tiebreaker? 
  • Does the president or CEO understand S&OP? Can he or she explain the link between strategic business planning and S&OP?


If the answer to any of these questions is no, then it’s time to meet with company executives and ask for their thoughts on how to make S&OP more effective. This is a great opportunity for a kaizen event with leadership attendance. The goal is for the president or CEO to view S&OP as management’s way to run the business and the executive meeting as the avenue to get information. If the leaders do not own it, then the process needs to change based on their input.

2. All participants must take meeting attendance seriously. Without active participants, there is no S&OP. If a primary attendee cannot be at the meeting, then someone from the same functional group must attend and have authority to speak. It is essential that each of the required functional groups is represented. Consider making meeting attendance a key process indicator that is reported in partnership and executive meetings. In addition, attendees always must be accountable for presenting their own products’ or families’ S&OP data and countermeasures.

If there are issues with this rule, consider conducting a kaizen event with stakeholders, and redesign the meetings so people get the information they need to make informed decisions. Finally, attendees must understand the data being presented. Just because the same information is reviewed every month doesn’t mean people truly comprehend its meaning. Make sure they do, and engagement will quickly become enhanced.

3. Promote a team environment, but encourage healthy debate. Appreciate and use differences to make your meetings even more successful. Leverage the support of top management to ask questions until you get to the root of problems—and do so without accusations while being sure to communicate negative growth projections, supply constraints, gaps to annual operating plans with no countermeasures, and the like.

Don’t quibble over minute details. In the executive meeting, you shouldn’t have a lengthy discussion on a lower family forecast for just one specific territory. If needed, develop an action item to revisit after the meeting. Also, ensure you know the reasons for shifts in the forecast, gaps, and goals so you can answer questions and make good decisions during the meetings. Lastly, before a meeting ends, verify each attendee’s approval of the forecast.

4. Supply does not change the forecast. “That forecast is far too low. Bookings have been strong for the last two weeks. We’ll bump it up 20 percent just in case.” Sound familiar? Unfortunately, this is one of the most commonly broken rules. Instead of escalating questions to stakeholders, supply professionals make the decision to go with an alternative forecast based on their own estimates. It is imperative to keep supply aligned with the forecast unless a change is decided in the partnership or executive meetings.

5. Perform a kaizen event on the S&OP process at least twice a year. You can focus on either the entire demand step or one product line within demand. This choice should be based on business strategy, current performance metrics, or issues with engagement. The benefit of kaizen is that stakeholders participate in the activities and leave with a feeling of ownership and that something was accomplished that will benefit them.

6. Use an action item list to keep people accountable and ensure what gets measured gets done. This list should keep track of actions assigned to address gaps in the forecast, potential countermeasures that require different stakeholders to fulfill, or important process improvement ideas identified in meetings. Each meeting should have its own action item list that is reviewed at the beginning of the event.

Talk to your stakeholders—they may have additional rules to consider. No matter what statutes of S&OP your team decides on, stick to them. Following the rules will make your S&OP process much more effective and easier to accomplish.

Jenny Schneider is the sales, inventory, and operations planning manager for Ingersoll Rand’s Security Technologies Sector in the Americas. She also is the regional materials manager, responsible for leading materials strategy, planning, and control. Schneider is a certified six sigma black belt. She may be contacted at jenny_schneider@irco.com.

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