How They Did it: Red Wing Shoes’ Journey to S&OP

This is an excerpt of the original article. It was written for the May-June 2014 edition of Supply Chain Management Review. The full article is available to current subscribers.

May-June 2014

Getting the most from Sales and Operations Planning is a combination of people, processes, and technology. The Red Wing Shoe Company details the steps it took to improve S&OP processes, slash its S&OP planning efforts by 50 percent, and align manufacturing with sales—all while growing its business.

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Who owns your Sales and Operations Planning process? Is it the supply chain? Is it sales and marketing? Is it manufacturing? Is it your executive team?

In 2008, those were questions that we struggled to answer at the Red Wing Shoe Company as we started our journey towards S&OP success. After speaking to consultants and to other companies like ours at conferences, we knew we were certainly not alone. Gartner, for instance, has reported that about 70 percent of global organizations are only in Stage 1 or Stage 2 of the four stage S&OP Maturity Model. Most organizations acknowledge the need for a step-change improvement to their S&OP process.

At the start of our journey, the S&OP process took six weeks to prepare. It was reactive, manual, and primarily a backward looking
exercise; much of our planning was based on historical data that we updated by backing out our most recent sales figures from the total projection for the year. The remainder at the bottom of the column became the figure we expected to sell for the rest of the year. There was little collaboration with our suppliers or manufacturing team to understand their capacities and constraints compared to our forecasts. We relied on voluminous and complex spreadsheets and updating them was a manual, labor-intensive process that was prone to error. More importantly, nobody in the organization really owned the process or the results.

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