In a fascinating discussion last week we were discussing capability building, centralised vs decentralised planning process, and making planning processes stick. For me, one of the most interesting points was about the S&OP meeting, and the skills of a planner. Probably because we've discussed this problem more than once and not, until now, found asnwers: "my planners make a measured decision, and are then overruled by commercial teams. Management puts more stock in the commercial team, and wants to hear good news".
In last week's discussion. Malcolm Ritchie and Sofia Gkiafi of Baringa had some great advice around this. One of the core points was that a sales process can be clear, well laid out, well planned. But it loses traction. Here's some things Sofia and Malcolm suggested we bear in mind:
Management must back your S&OP process, must be behind this process as a way of running the business
Make sure decisions are made in this meeting. This will reinforce the usefulness of the meeting, and ensure it's attended.
Your sales planner is often the most junior person - they need to unite the silos, get people in agreement. So invest in your planning team! They need management skills.
Whilst it must not be Supply Chain process, SC should provide the numbers, and be open to challenge.
Planning is a human process, and will be wrong, to some degree. Accept that, and recognise the role of the planner is to reach the best answers for the business.
A quick list of the key points raised
Covid expanded the cracks in the planning process: demand signals are hard to interpret in markets that are booming or (to some degree temporarily) constrained.
When there are fires to extinguish, you will find that the S&OP meeting is quickly dropped from the agenda, unless this is how the parts of the business are run.
Virtual working has exacerbated the localisation of decision making/fragmentation of process.
Planners need management skills because they are the ones bringing the functions together to align. They must be coached on the job (often they are the junior person in the room). Consultants sometimes advise on ‘best practice’ but this does not help with the realities of the planning process.
Management must be bought into the S&OP process - it will quickly fade if an agenda is not taken, attendance recorded, or if decisions are not made in this meeting. Make it REAL, solve PROBLEMS in this meeting.
Some CPGs have been on a centralisation journey for 20 years. Do it in small steps. Some local knowledge will mean an element of localised decision making (eg in the brewing process).
If local markets don’t ‘own their own number’ they can quickly absolve themselves of responsibility, ignoring the impact of the forecast.
Planning is about PEOPLE. Dealing with ambiguous, unclear signals, and making decisions on that. Tools cannot tell you what to do - this is the role of the planner. To make a decision, which will always be wrong, and decide how wrong it is, and to work our whether the same mistakes are always made. The planner must sell that decision to the commercial team.
Where planning is localised, sometimes the worst planners shout loudest and get the stock! A centralised model can moderate this, and provide min/max guides to ensure better supply decisions are made.
