Balancing Demand and Supply in S&OP: The Executive Nuts and Bolts

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This is the third article in my series on the Executives guide to S&OP. The goal of these first three articles is to provide a “primer” on the Executive S&OP Process. Prior to this article, I covered what you should expect out of S&OP (5 Outcomes) as well as what your role (Management and Participation) should be. Now it’s time to get into the details: What is at the core of making the process work?

ASCM (APICS) defines an effective S&OP process as:

“[S&OP] guides business decisions, provides key problem-solving strategies, gives executives greater control over the enterprise and drives overall business success.”

I have seen this definition working in practice in many organizations. Getting the process to this point in your organization, however, takes work. Work that is made easier if you start with the right fundamentals:

• A single story for each family

• Constraint-based S&OP families

• Data Driven Presentations

• Clear Accountability for each part of the plan

So, let’s get down to the nuts and bolts.

First, the sales/marketing presentation should be directly connected to the supply presentation for each family. This is sometimes called “A single version of the truth.” A quick check on this is to look at the structure of your Executive S&OP slide deck: Is it by function or by family?