To take our heartbeat analogy further, while you should do your quarterly/monthly check-ups, it’s the way you maintain your health in the interim that can really minimize your health risk. Creation of the S&OP may be on a regular schedule, but in a highly volatile environment where the sales and operations plan quickly become at odds with reality, sticking to a monthly process won’t cut it. Course correction in response to changing supply and demand conditions should happen every day. How many have waited in anticipation for month-end reports, only to ask …’what happened?’
At the risk of overkill, let’s keep going with our analogy. For the S&OP to stay relevant it needs the equivalent of a heart monitor that follows performance, alerts you to variances, and lets you proactively address events and activities that put the plan at risk. And when things go awry, it requires a defibrillator that can quickly stabilize the plan’s pulse. In other words, S&OP should be a continuous process with ongoing adjustments during the month. The S&OP objectives may not change, but the manner in which the targets are achieved may need to be changed on a daily basis. With the lines between the planning process and the operational/ execution processes blurred, companies are focusing not just on improving the planning process itself, but on executing to the plan in the face of volatility.