Ask several companies about the focus of their sales and operations planning (S&OP) meetings, and you’ll likely receive very different responses, depending on a company’s S&OP maturity level. Some view it as a purely demand planning, sales planning or a consensus planning process, whereas others view it as a process of matching demand and supply. Very few think of S&OP as an integrated business planning process that can drive gains in revenue, margin and operating performance.
For companies operating at lower levels of S&OP maturity, the process is often siloed by department or business unit, with locally optimized or department-specific metrics. S&OP meetings tend to cover day-to-day operational or production issues, and the process is very manual. Often companies at this maturity level use Excel to enable the S&OP process, spending approximately 80 percent of the time collating data from multiple, disparate spreadsheets and only 20 percent of the time on making decisions.
Companies operating at higher levels of S&OP maturity use the S&OP process to facilitate true integrated business planning. This cross-functional business process includes stakeholders from across the organization, including sales, marketing, finance, product portfolio management, all of which come together to determine that one-number plan that the whole organization marches toward. With integrated business planning, the metrics are not departmental metrics, but corporate performance metrics – driving decision-making consensus about what’s best for the organization. If you want to know where your company falls on the S&OP maturity curve, consider these factors:
- Time horizon: are you focused on the short-term (0-12 weeks out) or the mid- to long-term (18-24 months out)?
- Product focus: are you looking at the SKU/order/shipment level or the product family level?
- Metrics: are you focused on departmental objectives or organization-wide objectives?
- Participants: are inputs being provided by one team or multiple teams across the organization?
- Technology: are your S&OP processes supported by spreadsheets or by technology with in-memory scenario analysis, a performance dashboard, management by exception capabilities and automated workflows?
We’ve worked with many companies over the years to enhance their S&OP processes and have seen benefits such as greater enterprise-wide visibility of demand and supply, improved inventory management, increased promotional planning, increased accuracy in budget forecasting, and an improved product lifecycle management process.
If you’d like to learn how you can to take your S&OP process to the next level and make it best-in-class, join JDA and KPMG LLP for a collaborative and informative workshop on recent industry trends and innovations across integrated business planning processes. Hear firsthand from KPMG and JDA supply chain solution experts as they discuss the latest process and technology capabilities required to enable a responsive, aligned, and synchronized S&OP process across an enterprise. The workshop will cover how to:
- Manage the “gap” between the current plan and the annual operating plan
- Analyze and view data through multiple lenses and cope with a regional/global matrix process
- Implement and administer the S&OP process cadence using workflows, exceptions and audit trails
- Identify performance gaps early to ensure optimal profitability and thereby create a directionally correct plan
- Promote enterprise alignment and accountability through transparency and impact analysis
The S&OP Executive Workshop will be held on Tuesday, Sept. 12, from 12 – 5 pm at the KPMG Orange County office in Irvine, California. Register today to attend.