ADDING VALUE TO YOUR S&OP PROCESS

Use change management to make your S&OP projects a success

Forfattere

Connie Køhler Gudum

Change management is adding value – in S&OP projects as well

Most companies are keen to improve their planning processes so that they can assure short lead times and enhance delivery performance. At the same time, they want to retain agility if extraordinary opportunities should arise on the market and be able to make the best possible use of their capacity across production facilities.

Companies may also become aware that their supply chains are neither flexible nor scalable in relation to fluctuations or step changes in demand. This often happens because the S&OP process is not working well enough – or because it may not exist in the first place.

Typical symptoms we see when S&OP is not working well enough include:

Process-related symptoms:

  • The company cannot react in time to changes in demand
  • The company operates with a high level of firefighting
  • The company has failed to convert strategic growth plans into operational planning
  • The company has failed to clarify bottlenecks and capacity restrictions

Trust-related symptoms:

  • The company has numerous plans pulling in different directions (plans in sales, marketing, product development, logistics, production, purchasing, finance ...)
  • The company is experiencing a lack of trust between sales and production; for example, production may perceive that they cannot rely on the forecast, while sales notices that customers are not receiving their products on time. This leads to an unconstructive discussion about whose “fault” it is rather than a constructive prioritisation of business.

When companies are to solve problems like those listed above, an S&OP implementation/ improvement project is often initiated.

S&OP is a process that covers all areas of the business. This means that many stakeholders are involved in the process. When a company implements S&OP or wants to make a step change to the existing S&OP process, one of the biggest tasks facing the team has to do with handling all the different stakeholders, who inevitably bring different mindsets and different objectives to the table. When we carry out major implementation projects, it is obvious that the effect (the value) is highly dependent on whether we succeed in encouraging people to work according to the new processes and with the behaviour that is required, preferably in a highly engaged way where they also get the desire and capability of working with continuous improvement after the project has been finalised. It is therefore essential to invest time in and maintain focus on the human side: PEOPLE! By focusing on change management, we can ensure that we unlock the latent potential faster and with greater impact.

In the period during which the change is being implemented, the result can often be a drop in performance because the process is not yet functioning optimally and because people are working more slowly and are not yet fully comfortable with the new ways of working. With high focus on change management activities, we can add more value by minimising (maybe even eliminating) this drop in performance, we can get impact faster and we can get more impact. Clearly, there are tangible benefits of change management when done successfully.