What’s the greatest success factor in S&OP? What do you need to ensure the process delivers real results?
We discussed the essential elements that make S&OP work effectively.
If you’re looking to enhance your planning process and achieve better outcomes, watch the full video below and gain valuable insights into successful S&OP.
Rob: If you’re involved in Sales & Operation Planning, or S&OP, do you know what the number one success factor is to make sure it’s really effective? That’s what we’re going to be talking about today. So, I’d like to welcome back Steven Thacker, one of our directors and a specialist in S&OP. Welcome, Steven!
Steven: Thank you, Rob.
The Key to S&OP Success: The MD
Rob: Now, I know you’re going to tell us something really enlightening today. What is the number one success factor for making S&OP effective?
Steven: Well, Rob, it’s a shame we couldn’t have done a quick survey before this to see what people think! But after years of implementing S&OP and even doing what we call S&OP renovations—which is where businesses already have a process, but it’s not delivering or needs help—we’ve reached a clear conclusion.
And we’re not alone in this thinking. Many experts in the field agree. The number one success factor to ensure that S&OP delivers results and is sustainable is this: you need a converted or enthusiastic MD.
Rob: So it’s all about the MD?
Steven: Exactly! It’s not enough for the MD to just give tacit approval. That won’t cut it. You need the MD to champion the process—enthusiastically. And you might be wondering, “Why does the MD matter so much?” Let me explain.
First, the MD is the only person in the business with authority across all executives and all functions. If S&OP is run or perceived to be owned by supply chain, for example, there’s a problem. Supply chain can manage the numbers, the analysis, and the plans, but they don’t have the power to enforce changes in areas like sales, finance, or customer service.
Only the MD has that span of control to ensure full alignment and compliance across the business. That’s reason number one.
Rob: Makes sense. And there’s more, isn’t there?
The Energy to Sustain S&OP
Steven: Yes, the second reason ties back to Newton’s second law of thermodynamics. Strange, right? But hear me out. The law says that without energy, things naturally degrade over time. The same principle applies to S&OP. If the MD isn’t actively putting energy into the process, the meetings and overall quality will decline.
The MD doesn’t need to spend hours on it every week. But they do need to set the tone and make it clear: “This is my process. It’s the forum for decision-making about the future of the business.” If the MD isn’t engaged, others won’t be either.
Rob: That’s a powerful insight, Steven.
Steven: Absolutely. Without an enthusiastic MD, S&OP won’t deliver its full potential, and it certainly won’t be sustainable long-term.
Rob: I bet that came as a surprise to a few people! I’d love to hear your thoughts. Does your MD support S&OP? Are they putting the energy into it? Because as Steven explained, without that, S&OP won’t go anywhere fast.
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Editor’s Note: The content of this post was originally published on Logistics Bureau’s website dated February 22, 2023, under the title “ Sales & Operations Planning (S&OP) – The Greatest Success Factor“.
