Farewell S&OP as we know it? - November 2018

Imagine a planning world where people plan and develop scenarios simultaneously across multiple time horizons. Planning for either the short, medium or long term, and on any level. Harnessing real-time collaboration with relevant decision makers to make planning happen seamlessly and in the moment. What you have just imagined is Concurrent or Simultaneous Planning!

It’s here, and it’s happening now. Companies in the electronics, FMCG and life science sectors are already using systems that provide such capabilities to improve performance and reposition the role of Sales and Operations Planning.

So, where does that leave the traditional S&OP process and those that have championed it, like me! Is it still really fit for purpose for the new smartphone generation, used to smart, efficient, digitized ways of receiving information and planning? Those who work in the here and now and who are less obsessed with mid to long-term planning?

S&OP evangelists clearly believed it required a new lease of life, hence the rebrand and repositioning to IBP – but its progress seems to have stalled there. This hiatus is surely a sign that the process in its current form has reached its end.

 

 

If the S&OP process is to survive, its supply chain focus and language needs to change dramatically, and both need to become more linked to the core planning objectives of any business. Companies still aim to successfully execute their long-term aspirations and make their company vision a reality. They still need to connect their strategies to annual plans and ensure they deliver by making financially informed decisions at every step of the way. There is still a need for S&OP to help a company ensure this happens. But it needs to start talking this talk, as well as walking the walk, and do so in an easy to sustain way.

Purely using the existing S&OP process to balance supply and demand just isn’t enough anymore. And, the advances in functionality provided by modern-day planning systems and the dynamics of modern business have made S&OP’s monthly cycle dated and clunky.

Advancements in technology and rapidly maturing capabilities in simulation, collaboration tools, ‘point in time’ referencing and truly democratic decision-making have made the Concurrent and Simultaneous Planning concept irresistible to companies. The speed and robustness at which planning can now take place blurs time horizons and discussions about short, medium and longer-term decision-making are becoming irrelevant.

Will S&OP survive? – probably not in its current form! But Concurrent/Simultaneous Planning will breathe new life into it and help it re-position itself as the ultimate process to make a company’s vision a reality.

 

-Dave Alberts, Partner, Crimson & Co

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