Category: S&OP
What is the purpose of starting a Sales and Operations Planning process? For many, S&OP is a process to get information to flow between various parts of the business, the most obvious being Sales and Operations (hence the name). The premise, I believe, is that if Operations knows what is happening in Sales, then they will be able to respond. Great starting point. At some point, perhaps it worked well.
the more steps you have, the less likely your calculations will be completely predictable.
So, why are we still applying the solution when we no longer are facing the problem? There are only two possible answers to that.
We are looking at the wrong end of the problem.
If you’re frustrated and unable to see the path forward, it starts with inventory management and fixing the inadequate systems you’ve been forced to work with. Once you see the solution that I’ll present to you, you will never be able to “unsee” it.
Your goal is to maximize the money kept in the Saving’s account. And therefore, minimize the money in your Checking account. But don’t let the checking balance drop below zero.
Looking back, I don’t know what took me so long to realize that I have outgrown you. You never had an adaptable planning process – you only work if there is no variability.
We know intuitively that we must be agile in order to meet the changing and volatile customer demand. Why do we continue to insist that precision and the resulting chaotic emergencies are the best way to achieve agility?
“We’re taking data we know is wrong and using it to predict a precise outcome that we somehow expect to be right.
The irony is two-fold. First, for all our talk about processes and process improvement, we really spend an obscene amount of time manually adjusting and firefighting to achieve the desired outcome.
