The concept of S&OP or sales and operations planning is actually relatively simple to understand and for the most part, it is just common sense. However, the real issues come when trying to actually execute S&OP because of just how many people are involved.
Most companies work in segregated departments and each of these has their own specific agendas. This can make it hard for everyone to agree on and follow one set of rules over a long period of time.
Nonetheless, it can be done and by avoiding these common S&OP mistakes, you can begin to build a process that runs smoothly and follows best practices.
No executive ownership
One of the most common S&OP mistakes that businesses make is having a lack of executive leadership.
If a leader isn’t fully engaged, then the process will not work.
If you’re worried that your executives aren’t fully engaged, ask yourself why that might be.
- Is it a lack of information?
- Do they fully understand the S&OP process?
- Are they being given the correct information to move forward?
Digestible KPIs and the ability to ask the right questions are exactly what your executive leader needs to move forward successfully.
No business wide engagement
The main problems with S&OP don’t usually stem from the process itself but the difficulties executing it. This ties in with another common mistake team leaders make, where they actual fail to communicate cross platform.
When S&OP is described as a process that involves every sector of the business, it really does mean every sector.
Sales, finance, operations – whoever you might be thinking of leaving out of the process, just don’t do it.
Another thing to consider when integrating everyone into your plan is to remember that each sector will need their information processed in a different way.
To ensure the S&OP process runs smoothly, you’ll need to relay the same information to every leader but convey it in a way each department can understand.
Too much focus on one number
In its simplest form, S&OP has always had a strong focus on one number or one end goal. However, simplifying it too much can actually be damaging to the process and is one of the most common S&OP mistakes holding businesses back.
Rather than focussing on just one number, try to give yourself a best and worst case scenario to work with, as well as one realistic option in between.
Planning for change and accepting that it will probably happen adds strength to your S&OP process, helping you to deal with unexpected change in a better way.
S&OP is a long process and one that focuses on long-term goals. Therefore, it’s easy to understand why issues that have been discussed at the beginning of your journey often get lost over time.
It’s a common mistake not to keep track of all of your meetings, conversations, and emails, as it doesn’t seem important at the time.
However, no matter how unimportant it may seem, you should ensure that you document every conversation you have about S&OP.
Online group chats, meeting minutes, recordings of telekits – every piece of information is important for a clearer and more fault free process.