Wallace Says:
|
Here’s
a quote from the president
of a major U.S. based
pharmaceutical company:
“This process enables
my staff to see the business
through my glasses.”
What
do you say? Send
us your comments here
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One reason
why so many companies today
are implementing S&OP concerns
the benefits it provides. When
companies get excellent results
from S&OP, people feel good
about it. They tell their friends
in other companies; the word
gets around.
Executives
who use it become true believers
in the process. As they move
from one division to another
or from one company to another,
they take S&OP with them.
They believe it’s too
good not to use.
Let’s
look first at hard, quantifiable
benefits, which include:
- higher
customer service
- lower
finished goods inventories
- shorter
customer order backlogs, hence
shorter lead times
- more
stable production rates, hence
higher productivity
- shorter
supplier lead times
- reduced
obsolescence
- reduced
premium freight costs
Just
for the record: these are real
world results, not blue sky.
I’m currently working
on a new book, Sales & Operations
Planning: Best Practices, due
out in about six months. It’s
a compilation of the actual
experiences of over a dozen
companies that are leading edge
users of S&OP, and they
are reporting the benefits cited
above.
One of
the soft (non-quantifiable)
benefits is better teamwork.
If you implement S&OP in
your company – and do
it right – you will experience
enhanced teamwork at both the
executive level and with operating
management. The increased teamwork
results from the holistic view
of the business provided by
S&OP. Here’s a quote
from the president of a major
U.S. based pharmaceutical company:
“This process enables
my staff to see the business
through my glasses.”
Another
soft benefit: greater control
of the business. A vice president/category
general manager in a leading
consumer packaged goods company
stated: “Before we had
S&OP, I used to spend lots
of time turning knobs that weren’t
connected to anything.”
What he meant was that the decisions
he made at his level may or
may not get translated down
to the real world: the plant
floor, the customer order department,
the shipping dock, and so forth.
This gentleman went on to say:
“It’s a lot better
now; S&OP connects the knobs.”
And another
soft benefit: S&OP provides
a window into the future and
thus enhanced decision making.
It’s uncanny, but executives
and managers in companies with
S&OP can see future changes
in demand sooner than they could
before. The have more time to
respond and thus can manage
more proactively. A CEO, at
the conclusion of a pivotal
Executive S&OP meeting where
some very major decisions were
made, turned and said to me:
“Tom, when I think back
to a year ago, before we had
S&OP, I wonder how we were
able to run the business without
it.”
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