Successful SIOP Rule 1 Executive buy-in or die
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One of the major barriers to a company’s performance is the lack of a robust and routine SIOP process. SIOP (or S&OP as it’s sometimes referred to) can be the make or break process for an efficient, effective and importantly agile business. But a SIOP process is only as good as the senior support it receives.
SIOP fundamentals
We’ve covered SIOP here before, but if you’re new and want to get up to speed you can check out this excellent SIOP process on slideshare http://www.slideshare.net/anandsubramaniam/sop-process. The goal of a SIOP process is to figure out how a company meets it’s demand for goods (in both the short and long term) through applying it’s resources.
Importantly, SIOP isn’t a make shift or temporary process it should be rigorous in it’s approach, follow a set scheduled plan (with appropriate meeting cadence). It relies heavily on data and information but without senior support it’ll whither and die.
SIOP Senior buy-in or die
For SIOP to be effective it must have senior buy in and support for the process. It requires a number of processes and steps to be effective each of which need the appropriate levels of governance. As we stated in our previous article what you don’t have a SIOP process the need for close collaboration within the business can, without support from the top, often end in tears.
Senior sponsorship from within the business should aim to guarantee:
1/ Collaboration – all key functions within a business need to work together (for a common aim) to a set cadence.
2/ Buy in of result – whether or not you individually like the result – the business buy’s off the plan, this may require some tough choices but once agreed it needs to be stuck to.
3/ Monitoring of execution – the plan gets executed, teams need to be held accountable for doing their part.
As you can see these 3 functions, without senior support could be fraught with challenge. Unfortunately, getting people (especially execs!) excited about a process that’s unfamiliar can be hard (check out this link for some ideas) http://nexviewconsulting.com/five-ways-to-excite-your-executive-team-about-sop/
Many organizations choose to delegate some of the responsibility down via a SIOP manager/leader (sometimes full time others not). They typically act as the link between leadership and the business here, the roles primary function is to direct and drive the process. But this should not completely remove the need for exec support.
EXECUTIVES STILL HAVE RESPONSIBILITIES!
Whether or not your organization sees directing SIOP process as a full time function whomever leads SIOP is a conduit (not god!), the business needs to ensure he not only has direct access to the organizations senior leadership they also offer their support and buy in.
But what would happen if you didn’t have senior support?
Usually one domineering function (let’s call them Finance J) will drive the process, without leadership from the top it’s likely to be characterised by:
1/ Weak buy in to plan (No big stick to drive people)
2/ Lack of adherence to process
3/ Process improvements not being driven
4/ Risk / Reward not being managed effectively
5/ Deviations from the plan considered the norm
Don’t just sit there and nod – get involved
SIOP doesn’t just require strong sponsorship of the process but also active participation and support for a data driven fact based approach. All too often you might find leadership swayed by an important customer without understanding the impact, SIOP attempts to plug that gap and provides a route that needs to be followed.
The best SIOP’s are the ones that are integrated throughout the business with leadership actively involved.
Executive support for continuous improvement
The other area that leadership can help drive is that of process improvement. SIOP should be seen as a machine, one that can have its weaknesses. Leadership should routinely survey the SIOP process this helps prove out the effectiveness of what’s being done. SIOP often finds itself in a position where after time some of the required steps don’t get executed effectively of even more commonly collaboration between competing functions fails.
When it’s successful SIOP is like a well oiled machine. A process that facilitates the sharing of knowledge to support a common view of the supply chain. Its capabilities, its strengths, the risks all joined up into one effective coherent (bought off) plan.
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