Five Actions to Improve the Quality and Speed of Decision Making in S&OP

By Micheal Youssef | September 06, 2022 | 0 Comments

Supply ChainPower of the ProfessionSupply Chain Planning

Consensus is one of the principles that make up the supply chain planning process.

For example, within a demand-planning process, the demand-planning leader needs to reach consensus on the demand plan. To achieve that, the demand-planning leader needs to align different stakeholders ranging from a commercial leader of the business unit or market to finance leadership, marketing and sales leaders. Some of these stakeholders may have conflicting priorities and metrics. So, reaching a consensus every month becomes a difficult task.

On top of that, when escalating decisions to executive S&OP meetings, SC planning leaders expect commercial leaders to make trade-off decisions so that they can steer supply in different ways. For instance, building an inventory of raw materials in anticipation of a price change or winning a major contract. These decisions require consensus across functional leaders (commercial, sales, marketing, finance, manufacturing, logistics and procurement) and need full alignment to proceed.

Consensus in decision making can be a risk for the organization. It creates a culture of agreeability while undermining accountability. It only takes one function not aligned on the proposed decision to delay the decision-making process. Stakeholders who ask questions like the following indicate a level of indirect delay of decision making: Do we have enough data points to make the decision? What if factor X changes, would this decision still make sense? Or my favorite: Why don’t we take this decision off-line? While some of these challenges are legitimate and necessary to validate decisions, in many of the cases they are unintentional excuses for not making decisions or delaying them as part of the consensus culture.

In a quest to improve decision making speed and quality, Tina Nunno and Irving Tyler, two distinguished VP analysts at Gartner supporting executive leaders, recommend five key actions (accessible to Gartner clients) that I believe can immensely help SC planning leaders in improving decision making:

  1. Clarify the scope of the decision.

Ambiguity in the scope of the decision does not help to make that decision. The SC planning leader needs to pressure-test the decision statement to ensure that the scope of the decision is clear. To achieve that, SC planning leaders need to consider the following dimensions of decision scoping:

  • Decision direction in supporting overall company objective.
  • Decision source of funding and total bill.
  • Time and resource investment in the decision.
  • Activities that need to be performed once the decision is made.

Spelling out the specific dimensions above clarifies the value and implication of the decision. It enables a more objective assessment of the stakeholders to determine the benefit and level of commitment needed. In S&OP, a single slide that explains the decision scope, assumptions, cost, resources, activities and next steps would be a good starting point for a SC planning leader to lay out the foundation of the decision to the decision maker and stakeholders.

  1. Determine the decision maker and key participants.

The decision maker should define the key stakeholders who should participate in making the decision. In Gartner research on decision making in SC planning that spans 404 responses, only 64% of participants indicated that their companies clearly defined decision-making rights and governance for planning decisions. Certainly, there is an opportunity to align stakeholders. There is a fine-line balance to have enough participants to get the organization engaged and not too many participants that it will delay the decision making. To determine the participants, decision makers should examine to what extent the participants have enough relevant information and expertise and to what extent do the participants have control over funding and resources.

  1. Define the criteria for making the decision.

Decision criteria are the principles or standards by which decisions are made. Defining the criteria makes the decision-making process more objective and can be referenced to determine why that decision was made. The criteria need to align with overall company objectives and cascade down into measureable objectives for the business unit or geographical region. SC planning leaders and decision makers should reference the criteria if the decision-making process diverts to an adjacent discussion that may not lead to the decision itself.

  1. Agree on a process for making the decision.

In some organizations, decisions are not made within an executive meeting, but before it. Then those decisions are ratified within the meeting. If the company decision-making culture is to have pre-alignment, the SC planning leader may need to consult stakeholders to build momentum towards the decisions that need to be made. During the executive S&OP meeting, SC planning leaders need to remind everyone of the scope of the decision, criteria for making a decision and the role of each stakeholder. The SC planning leader may create a few options to show the decision implications and potentially ask for voting for the decision to reach full consensus. Once the decision has been made, the SC planning leader needs to document the final decision with the relevant details to stakeholders and the executers of the decision. This may require some explanation of background to those who were not part of the decision-making process.

  1. Track the progress of decision execution once the decision has been made.

Not all decisions that are made are executed. We often find that part of the organization did not do their part in the execution of the decision because they had a different interpretation or divergent opinion of the decision. So, tracking the decision execution in a transparent way is an important step that SC planning leaders must do to avoid obstacles in execution. A clear dashboard will help provide transparency of the decision flow to the executers, track progress of key actions, show any potential delays and encourage SC planning leaders to pre-empt any delays before they escalate.


Micheal Youssef
VP, Team Manager
Gartner Supply Chain


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