Sales and Operations Planning processes are not a panacea. Just because an organization has a process, does not automatically mean that the company will drive value.
In the past decade, company progress moved backwards with fewer and fewer companies believing that they are successful. The reasons? Lack of definition of supply chain excellence, the need for design, clear delineation of governance, clarity of the role of the financial budget and the organizational tension in reconciliation with the market, and the lack of organizational alignment.
18. Challenges
____________________________________________________________________
Source: Supply Chain Insights LLC, Sales & Operations Study (Mar-May, 2019)
Base: HAVE A S&OP PROCESS -- Total (n=107)
Q28. Thinking about when your [former] S&OP process was first implemented, what were the challenges that your company encountered with the
implementation? Please select all that apply.
58%
54%
51%
43%
42%
42%
37%
36%
33%
28%
6%
6%
Difficulty getting to the right data in a timely fashion
Lack of support from other functions
Not having technologies that support the process
Lack of understanding and support from the executive…
Lack of clarity on how to make a decision
Lack of skilled resources
Issues with the role of finance and the budget
Poor execution of the S&OP plan
Lack of clarity of supply chain strategy and supply…
Lack of time to execute the process
Other
Don't know
Challenges with Initial S&OP Process Implementation
36% challenges on average
Most Common
20. Only 9% of companies
designed supply chain flows.
21. Declining Satisfaction
____________________________________________________________________
Source: Supply Chain Insights LLC, Sales & Operations Study (Mar-May, 2019)
Base: HAVE A S&OP PROCESS -- Total (n=107)
Q11. When compared to your peer companies, how would you rate the effectiveness of your [primary]
S&OP process? SCALE: 1=Not at all effective, 5=Extremely effective
Q13: When you compare your current state of S&OP, how does it compare to the process three years
ago? SCALE: 1=Not at all effective, 5=Much more effective
*NOTE: Respondents answered for the S&OP process with which they are personally most familiar
Extremely effective, 5%
Effective
30%
Neutral
44%
Not
effective
22%
Effectiveness of Primary S&OP Process*
35%
rate their
primary
S&OP
process as
Extremely effective,
34%
Effective
31%
Neutral
28%
Not effective, 8%
Comparison of current State of S&OP three
years ago
65%
rate their
current
state of
S&OP
23. Driving Value
4 Factors Correlate to Tangible Book Value
Center of
Excellence
Effectiveness
S&OP
Effectiveness
2nd – 3rd Tier
Supplier Visibility
Pain with
Supplier Reliability
25. 23%
43%
60%
15%
17%
43%
Effective
S&OP
Other
Ability to Balance Their Primary S&OP Process
Drive Balance
____________________________________________________________________
Source: Supply Chain Insights LLC, Sales & Operations Study
Base: Manufacturers and distributors who sell items they manufacturer, have $250M+ in revenue, have a S&OP process and know answer –
Effective S&OP (rated 5-7 on 7-pt scale) (n=30), Other (rated 1-4 on 7-pt scale) (n=41)
Q15. How would you rate your company’s ability to balance the “S” and the “OP” in the evolution of your [primary] S&OP process (even if you
call it something else)?
NOTE: Respondents answered for the S&OP process with which they are personally most familiar
Higher than other group at 90% or higher level of confidence
MORE FOCUSED ON “S”
The process is out of
balance with an emphasis
on sales and marketing
processes
BALANCED
Easily balancing plans horizontally
between the sales/marketing teams
and the operations teams
MORE FOCUSED ON “O”
The process is out of
balance with an emphasis
on operations (logistics,
manufacturing, and
procurement)
26. Drive Organizational Alignment
78%
96% 94%
74%
88% 87%
79%
94%
48% 53% 48%
54%
39%
60%
70%
50%
64% 65%
59%
77%
30%
39% 35%
48%
-38% -36%
-24% -23% -23% -21% -21% -18% -18% -14% -13%
-7%
-60%
-40%
-20%
0%
20%
40%
60%
80%
100%
120%
New Product
Dev't &
Distrib'n
Sales and
Operations
Manufact'g
&
Procuremt
Operations
& IT
Finance &
Operations
Sales &
Finance
Marketing &
Finance
Sales &
Marketing
Marketing &
IT
Finance & IT Sales and IT CSR
&
Operations
Team Alignment: Importance vs. Performance*
Importance Performance
Greatest Gaps Between
Importance and Performance
____________________________________________________________________
Source: Supply Chain Insights LLC, Sales & Operations Study (Mar-May, 2019)
Base: HAVE A S&OP PROCESS -- Total (n=107)
Q34. In your opinion, how important is it for each of the following pairs of teams to be aligned? SCALE: 1=Not at all important, 7=Extremely important
Q35. How aligned do you believe that these same pairs of teams actually are at your company? SCALE: 1=Not at all aligned, 7=Extremely aligned
*Showing those rating elements 5-7 on 7-point scale; CSR = Corporate social responsibility
27. ____________________________________________________________________
Source: Supply Chain Insights LLC, Sales & Operations Study Base: Manufacturers and distributors who sell items they manufacturer, have $250M+ in
revenue, have a S&OP process –
Effective S&OP (rated 5-7 on 7-pt scale) (n=31), Other (rated 1-4 on 7-pt scale) (n=42)
Q24. Which of the following describe the role of your company’s financial budget in your [primary] S&OP process? Please select all that apply.
NOTE: Respondents answered for the S&OP process with which they are personally most familiar
AB Higher than other group at 90% or higher level of confidence
Role of Financial Budget in Primary S&OP Process
Effective S&OP Other
A B
The budget is an input to the S&OP process,
but does not constrain it
61% 50%
The S&OP process is an input to the budget,
but is not constrained by it
42% 26%
Budget goals drive and constrain the S&OP
process for inventory
19% 29%
Revenue goal alignment is determined by the
data output of S&OP
39%B 12%
We do not use financial data in our S&OP
process
16% 17%
Cost goals in the budget are updated based
on the output of S&OP
13% 12%
Top Two
Align: Role of the Budget