People Innovation Excellence
 

Optimal Implementations

https://hk.bsdacademy.com/bsd-on-digital-talent-developers-digital-marketers-ux-specialists-and-designers-are-all-in-high-demand-and-in-short-supply/

APICS Magazine – May / June 2017
Patrick Bower

At a recent APICS event, I unwittingly walked into a debate about the duration of a typical sales and operations planning (S&OP) implementation. Apparently, some of the conference participants had heard conflicting information from speakers—as well as colleagues and peers—about the correct duration. Viewpoints ranged from a 90-day focused implementation to a two-or-three-year gradual implementation to the catchall “you are never done implementing S&OP” philosophy.

I was only one Merlot into the evening reception, so it was not the wine talking when I replied with a simple,“It depends.”

Many of the factors influencing an S&OP implementation time line boil down to organizational and process maturity, the financial and information technology (IT) resources available, and the degree of managerial engagement. There is no standard rubric or decision tree for finding the right approach—but the answer does require having the answers to a few key questions and a strong understanding of the organization involved. It also demands an eyes-wide-open acknowledgement that you only get to implement S&OP for the first time once, so it had better be done right. Otherwise, the failure will be revisited on each subsequent attempt.

“So, what are these key questions?” someone asked me.

“Well,” I replied,“the first regards finances.Whether implemented by internal or external personnel, the costs for IT resources, tools, training, mistakes, and consulting services can be quite high. You need to understand the level of financial commitment to the project and whether there is funding and, if so, how much. Other inquiries in this S&OP readiness diagnostic include: What is the existing level of process maturity? Who are the key participants and stakeholders? Can your organization handle change? How much process training will be needed? How robust are existing supply chain processes? Is there strong executive support and proper funding in place?”

I then posed a couple of tougher questions to this growing gathering of my peers, including: What is the cost of a slower implementation? How much will the extra inventory—or freight expedites or schedule cuts—cost the organization until the S&OP process is firmly imbedded?

I told them that, if a supply chain is bleeding money, the potential savings often justify or offset the implementation cost. And therein lies part of the answer to the question. Every organization faces a cost-optimal intersection—the juncture where the cost of implementation meets the cost of not implementing. The higher the cost of a delayed implementation, the greater the financial pain and the more pressure to hasten implementation. Understanding and dollarizing such pain points is essential.

Another colleague then asked me: “The consulting firm we are considering insists on a 90-day time line. What are your thoughts on that?”

“S&OP consultants almost always suggest a brief implementation time frame because that’s in their best interest,” I responded. “A rapid, deliverables-focused implementation gives clients some quick wins and uses consultant resources contiguously—that is, 12 or 13 back-to-back weeks of work. The downside for you is, because S&OP is a month-long process, your organization may only experience one or two full cycles before the consultants are gone. There are some important upsides, though. Rapid implementations usually are well managed, initial results can be impressive, and internal resources are highly driven to make the engagement successful. Plus, launching S&OP can be daunting and is certainly not for the faint of heart. A consultant can speed up and add depth to the overall implementation.”

However, I also noted that short-burst implementations require tremendous acceptance of change, committed resources, the aforementioned financial requirements, and lots of executive support and engagement. If a company is lacking any of these, another path forward should be considered.

“Does your company readily accept change?” I continued. If a business is plagued by fear, uncertainty, or doubt; if restructuring has left people uncertain in their roles; or if there is a sense of resentment over initiatives not invented within the business, then the implementation time line should be extended.

At my current company, I faced a lot of organizational inertia when I started to roll out S&OP, so I took an intentionally slower approach. My deliberative strategy focused on improving just one aspect of the process—such as reporting, processing exceptions, the meeting agenda, or a different single metric—each month. This methodical style, while sometimes frustrating, enabled me to make the necessary internal changes more digestible. It took about a year to roll out a mid-maturity version of S&OP—with only a little grumbling.

“Certainly, if you are implementing S&OP on a thin budget, or by yourself, you should consider this path,” I said, before continuing with my Socratic inquiry. I asked: Do you have strong or lukewarm managerial support for S&OP? Are your colleagues committed to project success? Do they understand the process? And, most importantly, do they have a track record of engagement and follow-through in other projects?

I opined, “Management support is not just rah-rah cheerleading; it must be tangible and visible, with leaders participating in meetings, showing up prepared, and going through necessary training. Otherwise, the best route to S&OP is, again, slower and more thoughtful, from the bottom up, and enables you to rack up small wins and improvements over time. The change will happen, but it will be evolutionary, not revolutionary.”

At this point, I could sense the gears turning in my colleagues’ heads. I had clearly struck a chord. So, I offered a final overarching point for emphasis: “I agree that you are never done implementing S&OP and, maybe more importantly, that the path to S&OP excellence zigzags over time. But a never-ending implementation is really more a matter of necessity, as companies turn over marketing resources, sales teams, operational teams, senior leadership, and research and development talent. A dynamic marketplace creates the constant need for change, reeducation, process design conversations, and enhancements. I find myself reassessing, changing reporting, retraining, coaching new leadership, and explaining old metrics over and over again. The approach may vary, but you never stop reinventing or retooling the process.”

In retrospect, my simple “it depends” answer was spot on—and much less of an offhand response than a knowing nod to the need for a deliberate review of capabilities before considering any implementation model.


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