What’s the greatest success factor for an effective S&OP process? Many companies struggle to get it right, but it’s not impossible.
If you’re looking to strengthen your process and deliver better outcomes for your business, watch the full video below!
Success Factor in Effective S&OP
If you’re involved in S&OP, you might be wondering what truly makes it work. After years of experience implementing and renovating S&OP processes, the answer is clear: you need a converted or enthusiastic MD (Managing Director). It’s not enough to have passive support; the MD needs to champion the process to ensure it delivers results and remains sustainable.
Here’s why this leadership role is so critical.
The MD Has the Span of Control
The MD is the only person in the business with the authority and oversight across all functions and executives. When S&OP is perceived to be owned by a single function—such as supply chain—it creates limits. Supply chain teams often provide the analysis, like demand or supply plans, but they don’t have the authority to enforce changes in other areas like sales, customer service, or finance.
For example, let’s say sales needs to adjust its processes or customer service needs to align with new policies. Without the MD’s authority driving these changes, compliance becomes inconsistent, and the process loses its effectiveness. A converted MD ensures that all functions align, collaborate, and execute changes without friction.
S&OP Requires Energy to Avoid Degradation
Drawing from Newton’s second law of thermodynamics: without energy, things naturally degrade. S&OP follows the same principle. Even with the best setup, if the MD doesn’t consistently put energy into the process, its quality will deteriorate over time.
This doesn’t mean the MD needs to spend hours on S&OP every day. Instead, they need to set the tone and clearly signal its importance. A committed MD acts as the process’s custodian—maintaining standards, ensuring engagement, and preventing meetings from becoming just another routine discussion.
S&OP Is the MD’s Process
At its core, S&OP is designed for the MD. It’s the forum for making informed, strategic decisions about the future of the business. If the MD doesn’t declare ownership and show visible enthusiasm for the process, others in the organization won’t take it seriously either. As the saying goes, “what interests the boss, fascinates me.”
Is your MD fully engaged with S&OP? Do they actively support and energize the process? Without that leadership, S&OP won’t deliver its potential or sustain itself long-term.
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Editor’s Note: The content of this post was originally published on Logistics Bureau’s website dated February 22, 2023, under the title “ Sales & Operations Planning (S&OP) – The Greatest Success Factor“.
