eft partnered with Hughenden consulting and surveyed 100 shippers to create a three-part article on S&OP as part of an ebook. Here is the first part ‘The journey of S&OP’
To borrow an expression from our American colleagues, S&OP is a bit like ‘motherhood and apple pie’. Virtually everyone we meet at conferences and customer sites agrees that S&OP is a good thing, but not everyone defines it in quite the same way or feels they are getting it right.
When the full extent of people’s range of ambitions for and definitions of S&OP sunk in, we decided to join forces with EFT to seek some clarity. We conducted a survey around three sets of questions: (1.) How are companies faring on the S&OP journey?; (2.) are we all doing the same thing once we get going?; and (3.) is it all really worth it? In this three part article series, we will examine people’s responses to these sets of questions in more detail.
1.1 Who took part?
The survey respondents were comprised of 112 supply chain professionals that regularly attend EFT events. People from manufacturing companies (75%) naturally dominated, with most of the rest (14%) coming from retailers. Thanks to the diversity of EFT’s subscriber base, just over 50 percent were based in Europe, with 30 percent coming from the USA. The remaining fifteen percent came from Asia, the Middle East and South America. Most (65%) represented companies with a sales turnover of more than €1billion; 16% were between €250M-1billion; 10% between €50M-250M; and 10% below €50M
1.2 The S&OP Journey
When it comes to the S&OP journey, we discovered that most people’s opinions vary greatly not only when it comes to defining the process, but also agreeing the best way to go about it. For instance, one thing I often hear from clients and conference delegates is the importance of “getting the Board engaged.” However even this seemingly specific detail means very different things to different people. Here’s a summary of the contradictory results we analysed in this group of questions:
Sixty percent said that corporate management had either a “significant” or “complete” understanding of S&OP. Despite this nearly 70 percent thought it was enough to have an S&OP process that consisted solely of one monthly meeting!
When it came to specifying how actively CEOs are sponsoring S&OP initiatives, we asked people to specify “Supportive,” “Involved” or “Engaged” or “Not Involved” but intentionally did not define these. Encouragingly, respondents perceived that nearly 80% of their company’s CEOs fell into one of first three categories.
Only one in five companies has S&OP as a core decision-making process for their business. Half of companies had S&OP “Somewhat” as a core process. Only 5% did not use it at all.
So what can we conclude from these contradictory results? Cleary, S&OP is being recognised as a strategic tool for business by executive management and this is very encouraging news.
It appears that a critical mass of companies (70%) have embedded a monthly S&OP meeting into their operational processes. This simple improvement would appear to be making a difference in many companies, but to achieve more dramatic gains from S&OP, much more comprehensive changes is required. The fact that only one in five companies has defined S&OP as a core process only underscores this point.
My own experiences working with some major S&OP change initiatives in the past couple of years leave me with no doubt that the people issues that accompany more dramatic improvements are not always easy and in order to make new ways of working stick, companies have to instil new habits. This takes patience, perseverance and fully-engaged board members.
In my next article, I’ll be exploring what our survey respondents had to say about “living the S&OP process.” In the meantime, as ever, I invite you to share your S&OP experiences.