Many people ask me, "What is the value proposition for Sales and Operations Planning (S&OP)?" I have tried to answer this question many times and in different ways. One of the most interesting projects that we recently completed is a study where we asked companies to self-assess their S&OP processes on a scale of 1-7 based on perceived effectiveness. When we group the responses by Effective S&OP responses (scores of 6-7) versus those that Do Not Feel That They Have An Effective S&OP (1-5), we see distinct patterns in how they describe their organization. In Figure 1, we share these differences:
Figure 1. Characteristics of Effective S&OP
So, would you like to work on a program that could help and organization be more agile, strategic, and more in control? A program that could help companies be less reactive? The answer is an effective S&OP (with a 90% confidence level). However, what defines an effective S&OP process? Companies rating themselves with stronger capabilities are more likely to use supply chain planning systems, are more likely to be able to produce a feasible plan in supply planning, and use "What-If Analysis." We find that it is not one, it is many elements. One thing is clear for me, it does not happen without the use of planning technologies.
Would you like for your organization to have these characteristics? I think so....
What do you see as the biggest advantage of an effective S&OP? I look forward to the discussion.