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About the Author

Glen Margolis
Founder and Chief Executive Officer
Steelwedge Software


Glen Margolis, CEO of Steelwedge Software, has led the industry in the development and delivery of technology to power planning agility. Steelwedge is the global market leader of cloud-based integrated business planning (IBP) and collaborative S&OP solutions trusted across the world’s best manufacturers including Lenovo, Jaguar Land Rover, Canon, Sony, Tyco, Dow and Emerson.

For more information, please visit www.steelwedge.com

Supply Chain Comment

By Glen Margolis, Founder and Chief Executive Officer, Steelwedge Software

April 11, 2013



S&OP Is a Team Sport

 

Applying What We Know about Winning on the Football Field to the Sales and Operations Planning (S&OP) Process Provides some Interesting Guidelines for Success



The requirements for successfully conducting business today are not unlike the qualities that a football team needs to be triumphant on the gridiron. Both face diverse and aggressive competition. Both require the agility to make adjustments mid-stream, in response to changing requirements and environmental dynamics. And both must use historical information to make decisions while also anticipating what will happen in the future. Applying what we know about winning on the football field to the sales and operations planning (S&OP) process provides some interesting guidelines for success.

Margolis Says:

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Ultimately, on the football field or in S&OP, winning requires leadership, visibility, teamwork, accountability, and agility.
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You have to know—and play—your role

Football coaches design plays and create a playbook, with each member of the team performing a specific function. It starts from the top down, and every participant must know his role and execute properly to ensure success. Similarly, in S&OP, you need decisive leadership in the form of executive-level sponsorship, with a cross-functional team that aligns sales, operations, finance, product development and information technology. In the language of sports, each player must be very clear on their role for each play.

Like coordination among the players and the staff, the S&OP team must promote collaboration across the organization. Understanding the interdependencies of the team, and how each individual’s actions affect the group, is vital. And, any football coach will tell you that training is critical to his team’s success. Likewise, the S&OP team must be trained on how to take swift, decisive, and intelligent action based on analysis of the data generated from the process.

As an example, a consumer electronics manufacturer was rolling out an integrated global business planning process with the goals of driving better coordination across regions, more quickly reacting to unexpected spikes or drops in demand, and improving its ability to reshape its plans in the face of unanticipated supply cuts. In the course of its roll-out, the manufacturer determined that the supply and the demand planning teams were working off of different play books. Not only did they disagree about lead time for key products, but they also held inconsistent assumptions around upside demand. By adopting a single, unified cloud-based planning system bridging these gaps, they were quickly able to create cross-functional alignment. The net result was a reduction in on-hand inventory levels of more than 15% while increasing their fill rates in excess of 17%.

Establish a common goal—and communicate regularly about it

A football team has a clear, simple, and singular goal: to win the game. Achieving that singular result, however, requires the successful completion of numerous smaller steps: first downs, touchdowns, field goals, defensive stands. Such is the way with S&OP. While the highest-level business goal is profitability, achieving it requires successfully completing a multitude of other objectives. S&OP enables a company to organize different areas of the business around those common objectives. Key stakeholders must determine the operational dynamics—such as production capacity, supplier constraints, and so on—upon which the company must make major decisions, and then monitor through the alignment of process metrics and key performance indicators.

Constant communication is the key to winning a game. In the locker room, on the practice field, at the sidelines, and on the field, there must be a continual dialog about strategy to win. Can you imagine a team winning the Super Bowl with just a monthly or weekly practice session? Similarly, effective S&OP requires more than just monthly meetings. It necessitates continuous monitoring of real-time supply and demand data, cross-functional collaboration to ensure that data is actionable, and alignment of all actions with business goals.

Have a plan—and a contingency plan

In preparation for a game, a football team can watch video of the competition, draw up plays to counteract the specific skills of the opponent’s star players, and study the rival team’s season statistics to determine their strengths and weaknesses. But inevitably, even the most prepared team will encounter the unexpected. An injury to a key player, extreme weather conditions, or an opposing team member having a surprisingly “hot” night can throw any team for a loop. That’s why it’s critical to have a “plan B”—and a “plan C.”

Companies should establish both mid- and long-term planning scope for S&OP that corresponds with critical decision-making constraints. The short-term plans should maintain a level of tactical granularity to inform operational decision making, while plans at the mid-term should focus on strategic expansion. Once those plans are in place, S&OP leaders must assess the risks and opportunities that the company faces, and create contingency plans based on those “what-if” scenarios. These contingency plans deliver insight into what the response should be when the supply or demand reality varies from the plan. During this process, companies must ensure that they’re not only assessing potential risk and the corresponding responses, but also establishing parameters to examine the results and course correct in the future as needed.

Ensure your equipment employs state-of-the-art technology

Football equipment has grown increasingly high-tech. The latest developments include accelerometer-outfitted helmets that send hit intensity data to sideline medical staff and a football with a sensor that registers when the goal line has been passed or a first down has been gained. And of course, football pads have grown more streamlined while also providing greater protection from injury.

Great S&OP supporting technology also provides insightful, actionable data—and protects its users from risk. Surprisingly, many companies today still use spreadsheets to conduct S&OP. This is the equivalent of a modern-day football player taking the field in a leather helmet from the 1920s. Spreadsheet-based S&OP results in silos of inaccurate data and prevents the creation of a singular, complete view across all areas of the business.

Cloud-based S&OP technology provides a platform-neutral approach that works on both enterprise and mobile platforms. Users can leverage existing systems and easily merge multiple data sources in the cloud and deliver them on demand to anyone, anywhere in the organization. The amount of “big data” required to conduct S&OP requires significant processing power and predictive analytics to empower better decision-making. This kind of technology-empowered visibility enables companies to keep their eye on the “goal line”—their most imperative business objectives.


Manage by the metrics

Football is a game of numbers. Starting running backs are expected to rush for a certain number of yards. The passer rating serves as the key performance indicator of a quarterback. Players and coaches analyze these and numerous other team statistics—as well as those of their opponents—and they are held accountable for these numbers by team management. These stats act as a means by which to unlock areas for improvement and competitive advantage.

S&OP requires winning by the numbers as well. The S&OP team is measured on its ability to perform to plan metrics—and should be held accountable when the numbers don’t meet expectations. S&OP teams develop scenario-based analytics to evaluate tradeoffs among alternative resource scenarios, alternative demand plans, and so on. S&OP technology platforms can push exception-based metrics out to executives using mobile platforms to alert them to changes in the S&OP plan or other sudden changes in business conditions that merit re-planning.

Ultimately, on the football field or in S&OP, winning requires leadership, visibility, teamwork, accountability, and agility. Do you have what it takes to win?


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