2021’s Most Important S&OP Best Practices
Sales and operations planning (S&OP) is a projectional review of an organization’s supply, demand, and resulting financial impact. An S&OP should also include looking at new risks and opportunities and planning and managing new initiatives. The goal of S&OP is to correctly allocate company resources.
Why Is S&OP Important to Supply Chain Professionals in 2021?
Why is S&OP important, and how can the S&OP process be improved? It’s always been a very well-regarded undertaking for supply chain professionals because of the insights gained from various departments during the planning phase, as well as for the direction and forecasts it provides. But this year, S&OP is especially vital because so much rapid change has taken (and will still be taking) place.
Supply and demand has been brutally interrupted in some industries and been given a big boost in others. Either way, even the best forecasts and plans of the last few years didn’t predict a pandemic and are no longer relevant—nor will we be able to revert to those plans once the virus is someday in the past.
But for now, customers have different demands, employees require their health to be at the forefront of all operations planning, and financial projections and goals are shifting dramatically.
How Does Following S&OP Best Practices Improve Cross-Functionality?
Successfully weaving together all the new changes and expectations is most likely to happen when cross-functionality between all leaders (i.e., VPs of products, sales, marketing, operations, and finance) is considered.
The S&OP best practices outlined below can improve cross-functionality by aligning quality information and procedures for executing organizational outcomes that attribute to a broad, successful context. Those best practices are put forth here to lead organizations along a lit path with marked signposts that will ultimately get them where they need to be—in a safe spot with a beautiful, forward-looking view.
What Are the Top 5 S&OP Best Practices?
The COVID-19 Effect has greatly influenced business continuity and growth. It has also affected which five S&OP best practices are tops for this coming year.
1. For All of 2021, Give Ownership of S&OP to One Executive or High-Level Manager
Planning from the top down allows for the development of productive tactics based on the overall vision of an organization.
Giving ownership of the year’s S&OP to one person (rather than a committee) helps to quickly drive progress. The ideal individual is an executive or high-level manager who excels in the following four competencies:
- Two-way communication
- Effective negotiation
- Professional presentation
- Analytical decision-making
These traits are not comprehensive, but are beneficial when pushing a specified plan through the approval and adoption process.
2. Regularly Involve All Stakeholders in Conversations
No one likes to be left out, and that especially goes for company stakeholders. Provide them with:
- Main goals and objectives
- Strategies and tactics
- Investment costs
- Operational issues
- Course corrections
Communicating this information allows stakeholders to contribute, review, and request anything they deem vital to the overall health of the company.
3. Keep an Eye on External Influences That Are Outside Your Control
External influences, or risks, happen all the time. Keep a close eye on these potential threats because, as we’ve all learned this last year, they can wreak havoc on even the best sales and operations planning.
Two tips for keeping your planning on track, should something outside your control arise:
- Implement plans quickly. Minimizing the time it takes to put a plan into action reduces the risk of finding yourself with outdated solutions.
- Make minor changes easy through the use of flexible technology. However, avoid major modifications if possible, as these tend to eat up a lot of resources.
Now that the pandemic has an end in sight, it’s time to plan for the next prodigious risk. And what might that be? Cybersecurity threats and even cyberwarfare. They’re coming, so talk about them and include tactics for dealing with them in your new S&OP.
4. Don’t Gather Data Just for the Sake of Having It
Gathering data is great, but not just for the sake of having it. Doing something with the data is what really makes a difference.
- Provide useful KPIs and benchmarks
- Allow for cross-departmental collaboration
- Identify issues before they become problems
- Increase flexibility of each link in the supply chain
- Support faster, smarter decisions
- Improve insight and transparency across the entire supply chain
The value that is gained from following through on data cannot be understated.
5. Use Software Tools to Automate and Monitor Your Supply Chain
Software tools are absolutely necessary for today’s S&OP. The world is too complex, with vast amounts of inputs, never-ending potential threats, and endless possible outcomes. It’s become impossible for piecemeal systems to keep up and get the best benefits that S&OP is meant to give.
Every business should have a seamlessly integrable, complete, and customizable supply chain management solution. With everything located on one streamlined platform, managing all S&OP details is simple and effective.
Why Should You Work With Avetta?
Trusted by 100,000 businesses in over 100 countries, Avetta is the leader in all things regarding the supply chain. Our up-to-the-minute technology helps our clients reach their full potential using automation, risk management, high-quality data, and trusted partnerships.
If you want guidance going down the sales and operations planning path, connect with Avetta.