RAS

3/18/13

TW

7/29/13

Bullets from Bob:

August 2013

Energy Alignment: Taking S&OP To The Next Level

Executive S&OP – the high-level volume planning part of Sales & Operations Planning – has been around for a long time and remains one of the most highly leveraged things a company can do to increase its competitive advantage.

Executive S&OP, by its very nature, exposes disagreements among people and departments in a company. Sales/Marketing don’t always see things in the same light a Operations. Or Finance. These differences must be resolved and a first-rate S&OP process will enable the resolution to be harmonious. We call this “getting the moose on the table,” facing up to the tough issues rather than pushing them underneath the table.

The best solutions come from the reconciliation of these differing ideas that flow from different skills and knowledge within a company. These ideas carry the different perspectives that the various disciplines embrace. When alignment of these disparate energies occurs, the innovative solutions people canbring to problems are enormous, yielding company a significant competitive edge. The challenge is achieving that alignment of human capital or brainpower so that it can become a sustainable competitive asset.

Former Senator Everett Dirksen, talking about the U.S. Congress, said “We need to learn to disagree without being disagreeable.” Thanks to S&OP, manycompanies have done a good job learning how to disagree without being disagreeable so that the reconciliation process is a comfortable exercise. For those companies, they continue to reap quantum benefits from Executive S&OP for a long time to come.

Some businesses, however, struggle withconflict aversion, which is anti “moose on the table.” This prevents them from gaining comfortableand productive reconciliations to disagreement. These companies may benefit from Executive S&OP, but they’re not using it to its full potential, as shown in the figure below.

One of the proper roles of top management in an Executive S&OP implementation is to:

  • Create an environment that encourages and allows the ugly moose to be put on the table. If you have the practice known as “shoot the messenger,” that must be stopped and, here also, that must be led by top management.
  • With that, they can effectively reconcile conflict in a comfortable and productive fashion.
  • This will allow the alignment of human energy so that issues of policy, strategy, risk, fiscal problems, and performance measurements can be harmoniously resolved before their absence becomes a crisis in the short term.

The widespread adoption of these three attributes is the next level for Executive S&OP.

Thanks and best wishes,

Bob Stahl