Execution managers need the S&OP plans, too

This is an excerpt of the original article. It was written for the May-June 2016 edition of Supply Chain Management Review. The full article is available to current subscribers.

May-June 2016

The procurement function is at an inflection point.” So begins “The reinvention of procurement," an article by Jonathan Hughes and Danny Ertel, partners at the Boston-based consulting firm Vantage Partners. The authors argue that while many leading companies have transformed their procurement organizations into a linchpin of their enterprise strategy, far too many others remain trapped by procurement models that are out of date in today’s fastpaced economy, where the acquisition of innovation, collaboration, services and solutions is more important than transactions based on the lowest cost per unit. Reinvention is a fitting theme for…

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I recently got two calls from trade publication writers interested in how warehouse (and perhaps other supply chain execution) managers might get involved in their company’s sales and operations (S&OP) processes. It seems S&OP teams often have little to do with execution/operations managers regarding synchronizing execution to plans. While some software companies purport to do this—perhaps from a computer systems perspective—the business processes of supply chain planning (e.g., S&OP) and execution ought to be integrated.

These managers often don’t need to be at S&OP meetings because supply chain planners typically represent their interests. However, S&OP supply plans ought to be communicated to operations managers because they need them to drive their own short- and long-term planning efforts. This is the way to tie business strategy to operations (e.g., strategy executed daily on the manufacturing plant floor and in the warehouse).

Synchronizing operations with planning is strategic. Operational managers don’t necessarily need to attend S&OP meetings because these meetings are focused on more aggregated business views over longer planning horizons than the managers are interested in. SO&P plans that typically focus on six months to 18 months out, and on a weekly or monthly basis, don’t provide operations managers with enough detail about products, customers and geographies.

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