I liked your comments regarding rolling out S&OP globally.

As you mentioned, this is a simple process in concept, but seems to be extremely difficult to implement, particularly, on a global basis. The good news is everyone is implementing S&OP. However, the not so good news is everyone is doing S&OP differently. In fact, some companies actually have multiple S&OP processes and all are different within their company.

In research for our new book “Bricks Matter: The Role of Supply Chains in Building Market-Driven Differentiation” my co-author (Lora Cecere) and I interviewed 75 supply chain executives. In almost every case they said that there are two key fundamental ingredients for a successful S&OP process, 1) the commercial side (sales/marketing) need to participate in the process, and 2) there also needs to be a common set of performance metrics that everyone in the process shares. The biggest gap in their S&OP processes was convincing the commercial side of their business that they need to participate.

I also recently submitted an article to the Journal of Business Forecasting (JBF) that will appear in the Spring 2013 issued entitled, “Putting “M”arketing Back in the S&OP Process”. If sales/marketing are not participating in your S&OP process then you are not doing S&OP, just “OP”. Most companies are really doing “OP” not really S&OP. Before you can truly get the process right you need a commitment from the sales/marketing departments to participate. In order to get their commitment you need to explain the value to them. In other words, what’s in it for them? Finally, you need to match supply to demand, not demand to supply. Sales/marketing are responsible for demand generation, and as such, should be responsible for the unconstrained demand forecast.

The Finance department should hold sales/marketing responsible for creating the most profitable demand response, and also, hold operations planning/manufacturing responsible for creating an efficient supply response. By the way, the one number forecast doesn’t work in my experience. The financial plan is what it is, a plan not a forecast. The consensus forecast should be between sales/marketing only. No need for another financial input that essentially says, roll this month’s miss forward to next month and hold to the annual plan (also known as “Hold-N-Roll”). Operations planning should not be entering a forecast at all, as they are too fall removed from the customer, and they are not responsible for demand generation. They are responsible for meeting demand with the most efficient supply response.

As you can see I do have a passion for this topic. I hope my response is helpful?

Charles Chase