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In this series, CEPHAS principal Fane Friberg highlights the interdependent elements of an effective S&OP process for leaders of supply chain management. While some companies tend to fall back on the status quo, Freiberg highlights why it’s critical to actually increase the frequency of the S&OP rather than decrease the operations. He has reviewed the importance of staying committed and strategic imperatives. Today, he discusses participation.
Focus #3: Participation
You cannot have an effective S&OP meeting without sales. It is critical that all department leaders, at a minimum, are actively participating in the process. During this crisis, Morgan Stanley is projecting that for the U.S., the GDP will decline by 30%, and unemployment could potentially exceed 12% . Thus, weekly S&OP meetings are strongly suggested.
In addition to the sales team (field and inside), the supply chain operations team is very key in this collaboration. With the sourcing team keeping the enterprise aware of the ever-changing events and supply with their networks, this also may include having to find replacement supply for companies that have not been able to sustain the economic pressures from the pandemic.
Again, the manufacturing operations teams must leverage the demand and forecast to ensure that they have ample humans, machines, methods, and materials to fill what may be a shift in the demand profile. The biggest challenge is to stay actively aware of and compliant with all state and federal regulations on workplace safety for the essential workers. As there are changes in the workforce availability, operations must candidly keep the other members of the S&OP process aware of any changing dynamics that may hinder the fulfillment of the desired customer experience.
Finance and executive leadership will always have to ensure a robust infrastructure and processes to provide remote workforces real-time access to critical information, data, and business performance, as well as necessary methodologies for quickly communicating when variations are required to execute actionable real-time modifications.
Subsequently, the S&OP participants will aggregate these data points to determine the strategic and economic direction of the organization focused on safety, effective communication, customer, and shareholder expectations. As with any plan, the enterprise will be expected to use real-time understanding to quickly react to any disruptions within the business cycle.
- C. Reinicke, “Morgan Stanley now thinks U.S. GDP will shrink 30% next quarter as coronavirus pushes unemployment to historic highs,” Business Insider, March 23, 2020.
Fane Friberg is principal of CEPHAS.
To read Part 1 of this series, click here.