We’ve enthused about S&OP (SIOP) in some of our previous posts (SIOP Process)– we really think it’s one of the bedrocks of an efficient organization.
The problem is that many organizations find it difficult to implement.
While S&OP isn’t rocket science (if you use a common sense approach you’ll do well) many organizations find it extremely challenging to get right.
But why is this? If an organization recognizes the benefits and the process is based on a set of common sense activities then it should be easy right?
Here’s our list of 5 common mistakes when approaching SIOP.
1/ Lack of executive sponsorship.
If the leadership team don’t own SIOP (and are actively engaged) then its success will be limited. Often they aren’t supply chain specialists and while the approach is recognized and understood, the output may need to be in such a format that is easily digestible with decision points and outcomes described in easy to understand language (and where consequences are also easily represented). Clearly identify where leadership become involved in the process (e.g. signing off plans) and that their roles and responsibilities are clearly understood. The SIOP team should understand the role of the leadership team and how they interact with the process.
2/ Ease of use
Don’t make it too hard. SIOP should be easy. If you develop a complex process which people fail to understand and operate effectively you’ll end up minimizing your results. (Whilst failing to get buy in). Really work hard to keep it simple.
3/ It’s a team sport
SIOP only works when cross functional teams come together and work the process. If it’s heavily led by one function (without buy in from the others) it’s doomed. People need to come together and understand the objective and the goal. Leadership can help through promoting roles and responsibilities (including delegated authority). Remember that if a particular team isn’t participating then results can be skewed and the SIOP process will fail.
4/ Process, process process
SIOP is a process. As such ensure you have appropriate documentation, training materials, meeting cadence etc. This should not be free-form where you have no guide/plan on what your doing. Do not make it up as you go along, SIOP should be regimented, step by step. Everyone should understand the process (because you’ve made it simple), their roles within it, how to do it and how to process the results.
5/ Flexibility
One common result from SIOP is that it produces one plan offering zero flexibility. If things happen the business is unable to react (as it has no alternatives) and problems happen. Consider how you can plan best/worst/medium cases (still following the SIOP process). This provides flexibility and an ability to tune as you go.
Summary
I always think of SIOP in terms of continuous improvement. There are many things you can learn from your business from deploying SIOP and you should not be blinkered that you shouldn’t learn from the process and tweak it from time to time in order to optimize it. See what works, what doesn’t and hone it, remember it’s your process so make it work for you.
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