*By Carlos H. M. Aravechia

The S&OP process has been known for over 30 years, but companies from different industries and sizes still find it difficult to execute it effectively and reap its benefits.

We already understand the importance of the process in the execution and implementation of a good S&OP in a business. Now it is time for us to understand the key role that people play for the company to achieve an effective and quality Integrated Sales and Operations Planning.

Drawing up a good plan already brings with it some difficulties that arise from uncertainties. In the case of a good S&OP, there is an additional challenge: the need for integration between the participating areas in search of the best result for the organization in the long term, and not just for one area.

The pathway to S&OP’s success passes, mainly, through education and a culture that promotes the understanding of some key points:

  • Trade-offs involved in organization;
  • Strategy that guides the processes;
  • Performance indicators that show whether the company is on the right path;
  • An incentive system that promotes collective good and not just a simple overcoming of goals that does not converge to the future sought by the organization.

A good understanding of the process, stages, objectives, challenges, and associated benefits, from the company's board to operational levels, passing through the CEO and directors, will help participants to act in an integrated way.

Without a broad view of the business, it is common for the process to be subject to disputes between different areas, which end up pulling the same rope to opposite directions. 

A good process does not eliminate trade-offs in a company, but it creates a healthy environment to find a suitable balance point with strategy and encourages the search for more robust solutions.

The process must be conducted with neutrality, with the support of leaders and with the effective participation of those involved. In addition, short-term plans must be designed in a way that respects the guidelines established by S&OP.

Many companies believe they have a sufficiently mature process and invest a lot of resources exclusively in technology, neglecting the people and their knowledge (or lack thereof) regarding the process — when in fact the “people” factor is one of the most important for the S&OP fully function.

The last pillar to understand once and for all why some companies still have difficulty executing a good S&OP process is technology. The last part of the article comes out next week, don't miss it..

*Carlos H.M Aravechia is a Production Engineer, Solutions Architect in SCM and operates in the Innovation area at Numen.