Business consultants often state that the key to successful S&OP is “80% process and 20% technology”. However, I believe that this is changing as technology advances to support this critical business process.
We are in a business environment with increasingly volatile demand patterns due to growing middle classes in emerging markets, and an “always” on millennial generation which is connected and informed in real time. This volatile demand is compounded by the increased globalization of logistics processes to support this demand driven world.
These challenges have increased the importance of technology to effectively leverage the big data volumes from structured and unstructured sources. We are also seeing the need for increased collaboration across these global networks and the ability to sense, analyze, simulate and profitably respond to the business dynamics. And at the eye of the storm: Global supply chains and the sales and operations planning (S&OP) processes that drive them.
Many companies struggle to move up the S&OP maturity curve, despite having well defined processes, due to a lack of appropriate enablement tools. Today, most S&OP processes are driven by independent spreadsheets, coupled with systems designed to perform other business functions. This results in disconnected stakeholders operating in silos.
The key is not just to deploy technology, but the RIGHT technology in the form of a solution that is purpose-built for S&OP, and designed to drive processes based on real-time information.
When managed successfully, S&OP can be a powerful tool for evaluating the past and future success of your business. In leading companies, the processes span beyond sales projections and production capabilities to take into account financial goals, marketing efforts and inventory targets. When everyone involved in the S&OP process can share information and work from one consolidated plan, you ensure that one number, not a series of individual plans, is driving your business.
So, of course the “process” is critical. But let’s give today’s technology some credit, and take advantage of it to both support and improve our S&OP processes.
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This article was origionally published in the May 2014 edition of Consumer Goods Technology (GTS Straight Talk - Experts Debunk S&OP Myths)
