A recent article on the top 10 myths and realities of S&OP made some great points about what S&OP is and isn’t and why you need it. I particularly liked myths #2 and #3 which pointed out that if your leaders focus on real time issues (firefighting), they are not thinking strategically over the long term. As the article points out, firefighting is simply an expensive, non value-added attempt to recover for inadequate aggregate planning, lack of foresight and poor execution.
There is simply no amount of adjustment at the detail level will correct an error at the aggregate level. Companies who try to plan at the detail level over the long term, such as the 24-month planning horizon common to most good S&OP processes, simply waste time and resources since such plans will need to be updated almost daily. More importantly, they lose the forest for the trees and might not notice the clearcutter coming their way. If you’ve always got your head down correcting for minor deviations in consumer demand, you are going to miss the major deviation coming up with the next major shift in consumer preferences (such as the introduction of a new product that uses new technology or offers a brand new feature). And when this happens, you might just find that your already struggling business goes up in smoke.
So if you haven’t already done so, implement proper S&OP practices. You might just find that you have fewer fires to put out.