In yesterday’s post, we stated the top 10 myths of S&OP as defined by JDA and Oliver Wight in a recent white paper. Today we define the top 10 realities of S&OP planning. Tomorrow we will review the myths vs. realities and decide what is myth, what is reality, and what is the real deal. But first, here are the:
- S&OP is an executive process employed to plan and manage the business that must be executive-owned and led.
S&OP is an aggregate planning process that occurs monthly to ensure all company plans and strategies are aligned over at least a 24-month rolling planning horizon.
- Aggregate plans from S&OP are translated as necessary into detailed product management plans, detailed demand and replenishment plans, and item-level supply chain and production plans over the planning horizon.
- The focus of the S&OP process is on the future: the rolling 24-plus month planning horizon. S&OP is a fact- and assumption-driven process, not a numbers-driven process.
- Fact and assumption management and the qualitative aspects of S&OP are more important than the quantitative aspects of the business plans.
- When executives take control of the process, they define the information that they need and how they need to see it to make smart decisions.
- Demand-shaping strategies and scenarios are evaluated through the monthly S&OP cycle.
- Winning companies are collaborating with their trading partners more closely than ever before.
- The new paradigm for S&OP incorporates financial analysis into each key step of the S&OP process.
- S&OP must have a combination of people, processes and
tools working collectively.
Now some of these are obviously realities. But are all of them realities? Or are some of them perceived realities through rose coloured glasses which look a lot different with the rose coloured glasses off? We’ll provide our take on the myths vs. realities in our next two posts.