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Through this COVID-19 experience, supply chain leadership has had to pay specific attention to fundamental business practices. One of the most critical aspects has been the sales and operation planning (S&OP) sessions. Unfortunately, some companies, due to the uncertain times, have S&OP practices from their standard business model. However, it is more critical during these times that the frequency of the S&OP increase versus decrease to help navigate the turbulent times of the business. My intent is to highlight the interdependent elements of an effective S&OP process.
There is no question that within the S&OP process, our forecast is going to be “wrong,” but that’s okay. It gives us key critical information on what our market trending and customers’ current buying patterns reflect. Nevertheless, the criticality of the information that comes from this collaborative activity is what will drive success and keep businesses driving toward progress and profitability.
Focus #1: Stay Committed to the Process
Many organizations start the budgeting processes for the “next” fiscal year committed to holding regular monthly S&OP meetings. Those meetings tend to be well attended and with good collaboration—until mid-way through the first quarter. In almost every organization I have served, this is when there begins to be “mission-critical issues” that preclude members of the S&OP team from getting together with the same rigor/vigor and dedication and focus on driving the extraordinary supply chain leading to growth and profitability. The fundamental “rock” within the supply chain is understanding and driving your competitive advantage as on-time-in-full (OTIF).
While we still do not know what the “new normal” will be, it will be an evolution for business leaders to successfully navigate what, in high likelihood, will be entrenched with daily ambiguity and instability. An additional variable will be that key S&OP members may possibly work from a remote location. Fortunately, collaboration tools like Zoom, Microsoft Teams, and Skype have become virtual meeting tools that many have become skilled in and proficient in. Without a doubt, the consultations that I have participated in during the last 90-days are far more interactive and productive when there was the ability to see, hear, and share information visually during the meeting. Was it perfect? No. But was it an exponential improvement over voice-only conference calls?
We will get through this crisis. I have personally worked from a remote office for part of my work history. While some of my previous business associates have been very firm that neither they nor their teams could be effective working remotely, the current success that we have been forced into clearly challenges that mindset. The economy will eventually “reopen,” and these realized adaptations very well may reshape our business models and infrastructure. Please note that this is not to say a reduction in force, but rather less brick, mortar, and utility expenses. As businesses resume more normal operations, and small- to mid-size businesses (SMBs) reopen and/or ramp back up, the foundation of this go-forward culture will be the S&OP process.
Fane Friberg is principal of CEPHAS.