Sales and Operations Planning (S&OP) Unleashed

This is an excerpt of the original article. It was written for the July-August 2019 edition of Supply Chain Management Review. The full article is available to current subscribers.

July-August 2019

If you’re a long-time reader of Supply Chain Management Review, you’re familiar with Larry Lapide’s “Insights” column. Typically, Larry is writing about the many facets of planning, but occasionally, he takes on a provocative topic. One year, he questioned whether it was necessary to be a Top 25 supply chain leader, especially if in your industry, good enough gets the job done.

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Done well, sales and operations planning (S&OP) aligns an organization’s assets with the demand for its products. That sounds good, but all too often S&OP efforts come up short in this quest. Despite diligent efforts to succeed, it is not uncommon for companies to struggle with a range of shortcomings, ranging from lengthy time-to-market processes, imbalances between manufacturing and sourcing costs and low capacity utilization, to name just three.

How can that be? The truth is that S&OP is relatively easy to understand but difficult to implement—and not for the reasons most people think.

At its core, S&OP is all about tearing down silos that have historically allowed departments (sales, production and purchasing) to optimize their piece of the supply chain at the expense of the whole. A highly functional S&OP program changes all of that and aligns key performance indicators (KPIs) across the company. But it doesn’t always work out that way, and often KPIs are different than before but no better aligned.

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