S&OP: Is Your President Engaged?

“Our President does not have time for S&OP so we are doing it without him. What do you think?” A common statement combined with a silly question. You already know the answer. Without the commitment of your senior executive, the S&OP process will fail. At the very best, you will end up with an Operations or Sales centric process that is not S&OP. The most important word in Sales and Operations Planning is “AND”, and the only person who can put the “AND” between Sales and Operations is the executive to whom both report.

Once you accept the fact that the senior executive needs to be committed, you are ready to face the real questions: How and why not?

The major reasons senior executives are not committed to the S&OP process are that they don’t understand the value, they don’t understand their role in the process and they don’t understand the example that they set.

Let’s look at a story of a fictitious president, Tom, who is characteristic of a number of executives whom we have worked with over the years. Tom paid lip service to S&OP; a checklist item that he wanted the organization to address.

Through the first six months of the S&OP project, Tom attended two Executive S&OP meetings. There always seemed to be something else competing for his time. His team worked hard but they were getting nowhere. The VP of Operations dominated the meetings and the rest of the management team were spectators.

One of my associates involved in the project recognized the problem. He said:

“Tom, consider this your trip to the Principal’s Office. Your poor attendance record is derailing the S&OP project. I know the meetings aren’t that effective yet, but if you don’t show up, they aren’t going to get any better. There were some important decisions bypassed in the last meeting because you weren’t there. If you want to make S&OP work you need to show up. If not, scrap it now and stop wasting everyone’s time.”