In the modern business landscape, the effectiveness of the Sales and Operations Planning (S&OP) process is not just about internal alignment but also about synchronisation across the entire supply chain. This means establishing robust links with suppliers and customers, integrating them into the S&OP process, and tapping into the broader end-to-end supply chain. By looking beyond the four walls of the business, organisations can gain a comprehensive understanding of supply constraints and customer demands, which are essential for making informed decisions. This comprehensive approach is vital for managing costs, meeting sustainability agendas, and tapping into new supply chains. Organisations must move beyond the confines of their own operations to survive and thrive.

Mark Stallard, a 30-year veteran in management consulting specialising in manufacturing productivity consulting and author of the book “Fact-based leaders and their highly productive teams,” has partnered with Replan to provide insights into this critical aspect of S&OP. Stallard states, “Synchronise your important relationships first. Possibly the most important synchronisation is between a business and its upstream and downstream partners – the supplier and the customer.

Morgan Anderson, CEO of SPARQ360, a leading global supply chain and sustainability firm, echoes this sentiment, highlighting the role of technology: “AI and other tools have taken us to the brink of data accuracy. With increased accuracy, team members up and down the supply chain communicate and act on information like never before.”

Suppliers: The Foundation of Synchronisation

Stallard highlights the critical role of suppliers in the S&OP process. He explains, “Maybe your business makes demands of suppliers that place you at a disadvantage either cost or service-wise, such as by demanding odd sizes or quantities or pallets. Letting this happen can put you at the back of the queue when your sector has supply-chain crises and even routinely create a relationship with more stress.”

He shares an illustrative example: “We once introduced a supplier relationship manager position for a client as they had historically demanded all their main ingredients arrive in non-industry standard containers and inbound supply was suffering. We changed that and eliminated a supplier process of transferring all products from normal pallets to their bespoke ones. We also streamlined their inbound quality checks (which ran to 40 steps and 40 minutes too). Happier supplier, better relationship, especially when supply crisis occurs. They were no longer the problem customers (and at the back of the queue).”

By fostering better supplier relationships, businesses can secure a more reliable and cost-effective supply chain. This strategic alignment is crucial in times of supply chain disruptions and increasing pressures for sustainability.

Customers: Aligning with Demand and Reducing Waste

On the customer side, synchronisation is equally important. Stallard notes, “Customers tend to be larger than suppliers these days, as centralization strengthens. This means aligning to customer systems rather than the converse but sometimes things get lost in translation.”

He elaborates with a case study: “In one instance a supermarket customer was telling a supplier their service level was too low. We investigated and found otherwise. The supplier was delivering what the supermarket customer ordered. However, at supermarket HQ, there were many hands on the corporate tiller. Merchandising could expand a store SKU shelf space without telling the supply chain. They each had separate controls and in real time. Same with marketing. We needed someone who always had an overall picture of all changes as parameters were changing both before and after the daily ordering process. We ended up putting power into one pair of hands so every change at the HQ end was coordinated. That calmed things down.

Stallard continues, “We also reviewed daily splits per SKU which were the same for 300 products. This meant weekend party foods had the same weekly to daily splits as weekday meals. Unrepresentative. So, we created 8 SKU groups with their own daily splits. Alongside that we reviewed case size and, in many instances, reduced them so that the ordering system was more encouraged to order product (rather than be overly cautious to avoid waste). Overall, we improved category availability and waste and delivered £3m of savings. The service level issue for the supplier went away. They became the category lead and led the rollout of similar practices to all other supplier categories. Good synchronisation with the customer at both the individual supplier and the category supply group as a whole.

The Limitations of Manual Approaches

Many organisations still rely heavily on manual processes and basic tools like Excel for their S&OP activities. While Excel is versatile, it is not designed to handle the complexities and dynamic nature of modern supply chains. Manual approaches are often time-consuming, prone to errors, and lack the ability to provide real-time insights. As a result, these methods can lead to suboptimal decision-making and missed opportunities.

The Evolution of Technology

Over the past decade, technology has revolutionised the way businesses operate. Advanced analytics, cloud computing, machine learning, and artificial intelligence have transformed the S&OP landscape. These technologies enable organisations to process vast amounts of data quickly and accurately, providing deeper insights into supply chain dynamics.

Modern S&OP solutions offer capabilities far beyond what Excel can achieve. They enable real-time data integration from multiple sources, sophisticated forecasting models, and advanced scenario planning. This technological evolution is critical for achieving synchronisation within the S&OP process. Anderson emphasises, “We have seen companies across the spectrum able to reduce waste, lower inventories, increase productivity, and lower costs – while still reducing risk due to modern S&OP tools. The power of fast-response, AI-driven scenario planning cannot be overstated.

Change Management: The Journey to Synchronisation

Achieving effective synchronisation across the supply chain requires a change in mindset and approach. This journey involves creating awareness of the need for synchronisation and its benefits, such as cost management, sustainability, and competitive advantage, through training and informational materials. A compelling vision for a synchronised S&OP process should be communicated consistently by leadership, emphasising improved efficiency, reduced waste, and market responsiveness. Engaging and empowering employees by involving them in planning, gathering their input, and forming cross-functional teams fosters collaboration and diverse perspectives. Developing new capabilities through targeted training and providing access to modern S&OP tools are essential. Clear roles and responsibilities should be defined, with key positions like supplier relationship managers facilitating communication. Continuous monitoring with KPIs and regular reviews ensures progress and adaptability, while accountability is crucial for sustainability.

Embracing technology enhances the S&OP process. Advanced analytics and AI enable real-time data integration, sophisticated forecasting, and scenario planning, providing insights into supply chain dynamics for informed decision-making. Cloud-based S&OP platforms facilitate real-time collaboration and provide accurate, up-to-date information. Machine learning analyses historical data to predict future trends, allowing proactive disruption management and optimised planning. Automating routine tasks like data entry and reporting frees employees for strategic activities, increasing efficiency. Modern communication and collaboration tools like Teams, Zoom, and Google Meets ensure seamless coordination and quick response to changes.

As Anderson puts it, “Employees can now engage in more nuanced decision-making, support tactical decisions, and lock in better assumptions and drivers of performance. This enhanced contribution leads to more accurate and effective S&OP outcomes, ultimately driving business success.

Conclusion

Synchronisation within the S&OP process is essential for achieving a seamless and responsive supply chain. By leveraging modern technology and integrating suppliers and customers into the planning process, organisations can gain a comprehensive understanding of the entire supply chain. This approach allows businesses to make more informed decisions, respond quickly to changes, and drive better performance. Stallard states, “This approach allows businesses to make more informed decisions, respond quickly to changes, and drive better performance. In a world where supply chains are increasingly complex and interconnected, synchronisation is the key to staying competitive and ensuring long-term success.”

By embarking on a structured change management journey and adopting advanced technologies, organisations can ensure that their people are equipped and motivated to focus on suppliers and customers as integral parts of the S&OP process. This holistic approach is essential for navigating the challenges of today’s business environment and achieving sustainable growth. Working smarter through the effective use of technology will enable organisations to supercharge their S&OP processes and secure a competitive edge in the market. Anderson concludes, “Collaborating with partners, suppliers, and customers in real time is critical. Leveraging technology to do this both faster and more accurately helps companies gain advantages in the market. The level of synchronisation of a supply chain is a good indicator of its health and the bottom line of the companies within it.”

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Navigating Uncertainty: Harnessing What-If Scenarios in S&OP

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