The Break-Up: “S&OP, We Need to Talk…..…”

By Pia Orup Lund | July 12, 2022 | 2 Comments

Supply ChainPower of the ProfessionSupply Chain Planning

Dear S&OP,

When we met 30-odd years ago, everything was new and exciting. You were the missing piece in my puzzle and, although not everyone agreed with me, I knew that you were my key to success. I learned so very much from you. But now it’s time to move on. I know you have the best intentions at heart, but it just doesn’t work anymore. And I feel you have become a bit disconnected from the world … and from me.

Times were different back when we first got together. Things were simpler, more stable and not as unpredictable. It was perfect for the two of us. We had our routines, our ways of doing things in certain structures. We took our time to do what we needed to do, and we thrived at it.

But times have definitely changed.

The pace of business is accelerating, my structure is more complex and our customers are much more demanding. If we want to stay successful, we can’t keep doing the same thing over and over again in rigid structures — spending a month to make a decision, like we used to. We need to act faster and with more flexibility, so we can keep up with the rapidly changing environment.

Having just one way of going about things really doesn’t work anymore. We need break down our processes into smaller pieces — like LEGO-brick processes we can assemble and reassemble to fit whatever situation we need to handle. But you aren’t really a LEGO-brick kind of process, are you? Trying to make you into something you’re not would probably never work.

I know that technology has been a challenge for us in the past. But this has also changed, and you never really seemed to notice nor change with it. We can’t ignore technology, and what it can do for us, anymore. We need to take much more advantage of that! I want to be online all the time, so I know what’s going on in the world. I don’t want to check my data sources and plans “once every month” or “once every two weeks.” I want to become much more continuous and react whenever I need to. I really do have a fear of missing out! I don’t necessarily want to react to every little piece of information. But I want the visibility so I can be alerted and choose to react or not, depending on the situation.

We have spent so much time talking about the wrong things — and just talking without really acting. I need this to change. If we want to take advantage of technology, do less manual work and be better and stronger at planning, then we need to focus our discussions on factors that are important in making that technology work. That means that our overall ambitions and goals must be clear and broken down into rules, priorities, etc. that we can model in our technology.

I know that ideally we’d like to be able to just do it all and treat every customer the same way rather than having to prioritize and differentiate. But I simply do not have the resources to do that anymore. Many supply chains are in this situation now, so it’s not only me. And I don’t want to continue spending the majority of time looking back in hindsight or aligning on numbers (volumes, targets, gaps, etc.) because these numbers will change anyway. Certainly, we need to learn from our past. But our focus should be on the future and how we want to manage and prioritize my resources.

Finally, we really need to get away from this narrow focus on time (horizons) when we plan and make decisions. Everything is so intertwined these days that we simply cannot differentiate that way anymore. Analyzing the impact of events on me — on all the different bits and pieces that I am made up of — is so much more important. Time really does not say much about what an event means to me or to the business as a whole. Sometimes things happen right here and now that have a huge impact on me. We need to gather the right people to figure out what to do at those times — and often very quickly. And at other times, things happen with a longer time horizon that really don’t matter much at all, making it possible for other people to take care of that.

So, dear S&OP, we’re not a good match anymore. We’ve drifted apart. We now seem to have different approaches to how we want to act. I will carry along with me all the good things you’ve taught me. But now I have to be honest: It’s not me, it’s you.

I wish you all the best, but I hope we never meet again,

Supply Chain.

 

Created by
Pia
Orup Lund
Director Analyst
Gartner Supply Chain
Pia.OrupLund@gartner.com

 

 

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2 Comments

  • Paul Ross says:

    Hi Pia

    Thanks for the article, very clever.

    I fully understand your points around a changing more volatile world and that expectations have changed.

    However, it’s important not confuse supply chain execution with business planning. It’s even more important than ever that companies have a structured process in place to make cross functional decisions based on data.

    If you think about the planning window being 0-3 months for execution and 4-24 for planning then there is no need to have more frequent interactions.

    My worry here is that companies start to chase solution based on knee jerk responses to a small data set.

    S&OP moves teams away from short term reaction to proactive management of their business. Be careful not to suggest we go back to reactive business management.

    The work has not changed and will not change enough to move away from medium term proactive management.

  • Ricardo says:

    Dear Pia, nice to meet you and thank you very much for these post, but I would to share my oppinion about S&OP I am disagree.

    S&OP or IBP is a very flexible process, the key is to be able to manage the 3 levels that manage variations very well, it is a process that perfectly connects the three levels of the organization (strategic, tactical and operational); making clear roles for the entire organization in the process is part of the organization’s development, it’s not that we should see each other every month, or twice a month, S&OP clearly marks that we should have sessions and actions that manage day-to-day variations because the demand is thus outlined. This is a process of continuous improvement approved by the directors and at the same time develops a valuable empowerment towards the teams that are in execution, communication as a fundamental pillar helps to take care of the way of working and meet the goals.
    S&OP or IBP continues to be a process that generates results and is still applicable to any type of organization today and some clients where we have implemented their profits reflected in their profitability.

    I am a loyal fan of Garnet and I follow him in every post, but this time I disagree.

    Thanks again for allowing me to share in this post,

    Ricardo