7 barriers to an effective S&OP

There are many reasons given for S&OP not working - lack of executive buy-in and support, inadequate data quality and integration, poor collaboration across departments, lack of clear ownership and accountability, inflexible planning assumptions and processes are but a few. In over 20 years of design and deploying S&OP here are 7 barriers I have seen that need to be broken down to enable an effective S&OP.

1. Confusing S&OP with S&OE. I often see S&OP being confused with S&OE (Sales & Operations Execution) not just in business but also from supply chain technology providers. Business will say they want S&OP when what they really want is an effective S&OE process where they have control in the short term - anywhere from 1 day to 12 weeks. I have had similar discussions with technology providers when, on asking them to demonstrate S&OP capability they immediate focus on what the tool can do to support short term planning. Both are important and ideally should be deployed together. Be clear on the difference and what each brings.
   

2. Being too dogmatic about the deployment of S&OP. For those familiar with S&OP they will understand the monthly meeting cycle and the processes to deliver the inputs for an effective S&OP cycle. Including a design element is important because taking a copy book approach and being dogmatic in the deployment of the process will not always work. Consideration of how the business operates, where the profit is reported and the relationship between demand and supply is important to understand as part of the design. This may mean meetings and time horizons may differ from the typical monthly cycle or 24+ month time horizon.
   

3. Disconnected from business strategy. As much as what is done today, tomorrow and next week can be considered execution of S&OP (S&OE), what is planned for 4 to 24 months should be considered as execution of business strategy. Strategic discussion often look as something separate in business, disconnected to what is actually happening and for many overlaps with the time horizon of S&OP. As a result decisions that should be made in S&OP are often considered to be strategic and part of another process that will result in different plans and disconnects. Providing a link between S&OP and strategy will help senior execs engage in S&OP.
   

4. Poor compliance to business processes. This is one of the most common barriers to running an effective S&OP. If you're in a business that does not comply well to processes and ways of working then S&OP will be a challenge. One of the biggest causes for failures in supply chain transformations is the poor adoption of the processes and tools. Understand if there is likely to be a barrier to process compliance and manage the change required (see point 7).
   

5. Company Politics. As much as Politics can get in the way of progress for a Country it can also do so for a business. The larger the organisation the more likely there will be internal politics to deal with. Given the end to end focus of S&OP it is important that all functions across the business are aligned to a common goal. There is no room for functional silos.
   

6. Not recognising the need for continuous improvement. Too many businesses treat the implementation of S&OP as a one-off project forgetting there is a need to sustain and continually improve. For many businesses S&OP is not new, they've just let it die. If you want it to provide long term benefit, continue to mature the process through improving process, people skills and the use of technology. Design the S&OP organisation to support continuous improvement.
   

7. Not enough focus on the change required. We all talk about the importance of leading change but few organisations do it well. Lack of leadership or skills to embed and sustain the change will more likely than not be the number 1 reason you may have challenges with S&OP. It cuts across all of the above points. Knowing there needs to be a focus on change and actually doing it are very different. Deploying S&OP effectively is transformational. It requires a thorough assessment of the impact of change with a specific focus on how people need to behave. 

Over the course of the next few months I will explore each of these barriers in more detail.