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Human Energy Alignment

By Bradley McCollum | July/August 2012 | 22 | 4

Exploring this powerful benefit of effective S&OP

Fast approaching is the fourth anniversary of Jarden Corporation’s executive sales and operations planning (S&OP) implementation and my eighth anniversary with the organization. Looking back over those years, our business—like so many others—has had opportunities to capture and challenges to overcome. Without question, our S&OP processes have helped us navigate those waters.  

The work we’ve done has had lasting impacts on a broad array of business processes. We forecast differently, we plan supply capacities differently, we make decisions around warehousing and transportation differently. Our investments in S&OP have brought significant, quantifiable returns. However, I would submit that the most valuable change has been to something far more qualitative, something most of us never even talked about when we started: our very culture. S&OP has brought about a significant shift and enabled us to leverage the power of aligned human energies.

The culture change
Prior to the S&OP implementation, our business had the usual functional silos: sales, marketing, finance, supply chain, and operations. Our process structure provided no opportunity or forum to discuss, understand, or certainly argue about the quality or bias of our key inputs. Therefore, each silo was left to make its own calls, based on its own perspectives. This translated into the familiar sandbagging and hedging, typically leaving finance to make heads or tails out of what was really going on. 

The result was a business that was difficult to predict and control—and thus very challenging to optimize. Today, however, our S&OP design not only provides for that forum, but also makes consensus a cross-functional priority and monthly requirement. What began as a somewhat uncomfortable process change as part of our S&OP design developed into a key cultural transformation.

I have identified three key aspects of the S&OP implementation and ongoing practice that facilitate this change:

  1. Consensus around the data we use to make decisions: A key step of S&OP design starts with deciding what data are going to be used each cycle. No longer is it acceptable for each business function to have its own data source. The cross-functional team must agree to the data inputs needed for each step, validate the data, and support the inputs.
  2. Disagreeing without being disagreeable: Every time I introduce new team members to our S&OP process, I explain to them it’s not only acceptable for them to disagree and argue their perspectives in our meetings, but it’s really their responsibility to do so as part of the team. For some people, this can be uncomfortable at first; but this mandate for disagreement within the process eliminates the unproductive passive aggression that often otherwise results. That situation can be divisive and serves no benefit to the task at hand.
  3. Focusing on the error: We know we will never be exactly right with our assumptions, so we stop arguing about what the correct number is and start understanding how wrong the numbers could be. This change in thinking completely refocuses the efforts spent rescrubbing numbers, enables a better understanding of error and risk drivers, and lets the team more quickly develop mitigations. Our responsibility as an S&OP team is to ensure that we’re successful as a business, not to point fingers when we’re not. 

S&OP can’t and certainly won’t by itself solve the challenges that businesses face every month, quarter, and year. When implemented correctly, however, it can support a cultural change that enables people to have control and achieve optimization. As a cross-functional S&OP team, you are able to make decisions knowing that each perspective has been explored, challenged, and understood as part of the solution. The result is a broader understanding of overall business capabilities, opportunities, and risks—and decisions made with that understanding are more likely to be the right ones. 

Proof that this cultural change has occurred will come in the form of a visible shift in focus from individual success within functions to success as an integrated business. And at the end of the day, that’s why we all get paid.

Bradley McCollum is the sales and operations planning manager for Jarden Corporation’s Leisure and Entertainment Group, which manufactures, markets, and distributes a broad line of consumer products. He may be contacted at bmccollum@jardenbc.com.

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