Sales & Operations Planning is both a science and an art. Like any science, it relies on principles, rules, methodology, and specific measurable outcomes. But an S&OP implementation also calls for creative, incremental thoughts to address challenges.
Since the birth of Sales & Operations Planning (S&OP) in the late 1970s, volumes of text have been written about the subject and hundreds of organizations have embarked on implementing S&OP. It has been referred to by a number of names, including Executive S&OP and, more recently, as Integrated Business Planning (IBP).
Still, four decades later, organizations struggle to realize the promise of S&OP. In 2010, for instance, Gartner reported that about 70 percent of global organizations are in Stage 1 or Stage 2 of the four-stage S&OP Maturity Model. Most organizations continue to acknowledge the need for a step-change improvement to their S&OP process. Why then do organizations find it arduous to achieve sustained success from S&OP?
- Do organizations adopt S&OP as a fad, start with much fanfare but fail to support it?
- Is it lack of perseverance or discipline? Misaligned KPI’s or silo-driven behaviors?
- Do they invest in training while embedding the process?
Lots of rich, intellectual content on S&OP presents valuable insights on strategies to succeed in this game-plan. Yet, there appears to be systemic reasons why so many organizations have had limited success.