Wallace Says:
|
Another
reason S&OP is so
hot is its power as a
coordination tool.
As such, it’s very
different from tools to
increase reliability (Total
Quality, Six Sigma, and
so on). Further, it’s
different from tools to
reduce waste and time
(Just-in-Time, Lean Manufacturing,
and the like.) S&OP’s
job is to help people
deal with complexity and
change.
What
do you say? Send
us your comments here
|
“Tom,
S&OP is the hottest strategic
issue I’ve seen in years,”
stated Dave Caruso, a Vice President
at business research firm AMR.
That agrees with how lots of
people see it. Many, many companies
today are jumping on the Sales
& Operations Planning (S&OP)
bandwagon.
Why?
After all, S&OP has been
around for quite a while: about
20 years. What’s causing
this sudden surge in interest?
Well,
there are several reasons:One
is the very fact that it has
been around for 20 years or
so. Thus its current popularity
conforms to what I call the
process adoption curve.
This says that there is a 15
to 25-year lag between the development
of major new processes and their
widespread adoption.
Think
about it. MRP was invented shortly
after 1960, but didn’t
really gain momentum until the
early ‘80s. Total Quality
also got its start in the ‘60s
and didn’t get big until
the mid- to late-80s. Just-in-Time
came over from Japan in the
late 1970s but it’s taken
until recently for it to become
very popular as Lean Manufacturing.
Ditto for Six Sigma.
Another
reason S&OP is so hot is
its power as a coordination
tool. As such, it’s
very different from tools to
increase reliability (Total
Quality, Six Sigma, and so on).
Further, it’s different
from tools to reduce waste and
time (Just-in-Time, Lean Manufacturing,
and the like.) S&OP’s
job is to help people deal with
complexity and change.
Here
are two questions for you: If
a business is very simple, and
if things rarely change, does
it need S&OP? I doubt it.
Whatever coordination and forward
planning is required can probably
be done on the back of an envelope.The
second question: have you seen
many companies like that lately?
I haven’t. This is the
21st century; change is a way
of life. Further, despite the
wonderful simplicity that Lean
provides, most businesses are
becoming more complex, not less.
S&OP
can help greatly to manage in
a complex, rapidly changing
environment. Complexity is increasing
– due in part to global
sourcing, off shoring, and extensive
use of contract manufacturers.
Change is accelerating, due
in part to demanding customers
such as you and I who want quicker
response, more product variety,
and the next big thing sooner
not later. Companies are turning
to the powerful coordination
tool known as S&OP to help
them cope with this complexity
and change.
A
third reason for S&OP’s
popularity: the sizeable benefits
realized by companies using
S&OP well. We’ll talk
about those in the next edition
of Supply Chain Digest (See
The
Hard and Soft Benefits of S&OP
are Indisputable).
Agree or disgree with our expert's
perspective? What would you
add? Let us know your thoughts
for publication in the SCDigest
newsletter Feedback section,
and on the web site. Upon request,
comments will be posted with
the respondents name or company
withheld. |