I have had the good fortune of working with some of the best chemical companies in the world. Over the past year, the Chemicals Industry SAP User’s Group (CISUG) formed an S&OP working group, chaired by Tapan Mallik from DuPont. The group had 8-10 different companies actively participate and the timing coincided with an SAP development cycle. SAP wisely elected a parallel path approach to S&OP – a short-term, leverage what we have now, solution and a longer-term, let’s blow the socks off with an in-memory platform, solution.
So how can Bonnie and Clyde help your S&OP process? Without Bonnie, Clyde was nothing but a 2-bit punk who robbed convenience stores. When Bonnie was introduced to the scene, the pair became dynamic and inseparable. They transformed the concept of being outlaws to being legends and icons. Operations planning must occur in any manufacturing environment in order for a business to survive – you have to have some base level scheduling and planning in order to service a customer. But operations planning is not enough – you must include the Bonnie side of the equation (sales) in order to make the process dynamic. A handful of companies have made the inseparable transition of Sales and Operations Planning to more of an Integrated Business Platform – the vision is just that. One cannot separate sales from operations planning, or the process will fall apart.
Bonnie and Clyde never acted alone – there was a gang of 5 to 8 members that really made them effective. Each member had an equally important role to keep the legend alive (literally in this case). The S&OP team must also have gang members in order to survive and thrive. During a recent roundtable at SAP Insider, I polled the audience on who the gang members should be. The members included marketing, R&D, logistics, procurement, manufacturing, finance, GM’s, and of course supply and demand planners. A truly dynamic S&OP process will incorporate new product schedules, inventory optimization and planning, macro-economic indicators from both a marketing and procurement perspective, and transportation planning. I am also seeing a re-emergence of contingency planning into S&OP as a result of drastic unplanned events such as Japan, tornadoes, or rail strikes.
Along the way, Bonnie and Clyde encountered many barriers, normally in the form of ambushes, and they attacked each barrier with the same rigor. Many companies have allowed disruptive factors to derail their S&OP process. These factors, such as the economy, new regulations, changes to raw materials, or any other unplanned event, are actually a driving force to an effective S&OP process – they should not derail, but accelerate.
Tapan and I will be hosting a session at the annual ASUG/Sapphire conference on S&OP. In addition to business process disruptors, we will also talk about technology enablers, including the recently released rapid deployment solution on S&OP and our plans for the new in-memory platform. Hopefully our ending will be less dramatic than that of Bonnie and Clyde…