Yet another S&OP expert

There is a lot of garbage on any topic on the internet, so we can’t be surprised if we find some S&OP garbage floating around. Sometimes though, it can come from somewhere you wouldn’t expect. In this case it came from a Professor Operations Planning & Control on a pretty respectable site, which I follow regularly.

I write this because I care about the topic. I have to remember it’s only a blog, but this crossed the line of S&OP decency, especially coming from a Professor. The first sentence of the blog ‘The first time I Learned about S&OP was in 1991’, is followed in the second paragraph with ‘It was only 15 years later that S&OP popped up again’. The rest of the blog actually sort of proofs that the writer hasn’t moved on with S&OP since 1991. The blog ends with ‘my advice: meetings, excel and KISS’……WTF?

Have a read yourself and please let me know if I’m overreacting and I just have to accept that S&OP is a hot topic at the moment and everybody can say what they think about it. http://www.supplychainmovement.com/sop-the-single-plan-and-surprises/

And now over to the positive news is: Everybody can become an expert quit quickly. I tell you why.

It is almost 15 years ago that McKinsey asked me as a subject matter expert for a research interview on the development of e-marketplaces. I worked at IBM and was on top of the B2B alliances between IBM, i2, and Ariba. I went to i2 Tradematrix seminars in several countries and was on top of things. The internet and integrated planning dreams of then are now mostly reality. I still respect the visionary view of i2 back then, although this was all just before the IT bubble busted. But hey, at 26, I was the expert being interviewed by those smart guys from McKinsey. Cool huh?

I might just move on from S&OP and pick a small niche and start reading up. Before I know I’m one of few subject matter experts. As I’m working on developing an app with supply chain capability, I might just become an expert in apps!

4 thoughts on “Yet another S&OP expert

  1. We also care deeply about the S&OP topic and thus appreciate your enthusiasm .. but not sure how saying “keep it simple, Excel and meet” are bad things. Obviously, much better then trusting some “German” ERP God that they have it all figured out and you should put on your Zombie glasses and kneel down and “accept”. To us this is the primary business performance problem in the market… companies spending massive amounts of money with nothing left to do the right thing when they figure out the “whiffed”.

    In our thinking the ERP Gods and VC backed software folks are pushing an IBP story on the public which could tip a client boat and sink them in FUD (Fear Uncertainty and Doubt)

    In fact as long as you add some good time-phased algorithmic logic and a good process this approach to S&OP can work very well as it demands someone “peg” the ins and outs and really see the issues and what results from behavior

    We launched a site http://www.sopbook.com to try to broaden awareness and education around S&OP and scale thinking to full competitive advantage using patented technologies .. lets us know your thoughts… love to have your assistance

    Jon
    http://www.dcrasolutions.com
    http://www.sopbook.com

  2. Hi Jon,

    thanks for your comments. I had a look at your website and have to conclude that we have very different definitions of S&OP. I stay pretty close to the Oliver Wight definition

    S&OP/IBP to me is a monthly process, led by senior executives, who track the business versus budget and strategy in a horizon >3 months. Anything within the 3 months is a control process on the S&OP/IBP process.

    Short term demand & supply planning planning, scheduling, sequencing, order promising and order fulfilment etc are very important elements in the control horizon, but fall outside my definition of S&OP. I find this separation useful, as these horizons often have different stakeholders, enabling technologies and decision requirements for different business challenges.

    Its good that we’re both passionate about S&OP and try to create awareness. I suppose its not very good that the definitions used by us S&OP believers are still so different.

    cheers,
    Niels

  3. Hi Niels, planning is a continuum and not neatly segmented into different time horizons. nothing illustrates this better than a natural disaster, shortages of key components, or a leap in the price of a commodity, such as oil.

    the false barriers we have erected are due to the processing and analytics capabilities available to us 30 years ago, before even Excel was invented. the systems that came afterwards tended to automate existing processes, not question whether those processes were correct or not. the result is a mish-mash of different data models and analytics that make it impossible to get an end-to-end understanding of the business and operational effects of decisions quickly enough to be able to affect the decision.

    of course people still need to make decisions about when to launch a new product and how to fulfil a particular customer order. what if that order is worth more than $1M, has a 3 month lead time, and is for the product that is being replaced by the new product being introduced? what if i introduce 10 new producst or major variants in a year that consume many of the same materials and capacity as other items in my portfolio?

    i too was at i2, but i think we should blow up the whole oliver wight notion of strategic, tactical, and operational planning. instead i believe very strongly in integrated business planning, but very little in IBP. finance people will have the same issue with your argument for the separation of planning into different buckets as you have with jon’s: it is too ‘tactical’.

    the truth of the matter is that different functions have different goals and different perspectives, often competing goals and perspectives. let us not exacerbate this by continuing to give them different tools so that no-one knows which is the ‘correct’ result and everyone is workign off of different information. there is nothing integrated about that.

  4. Hey we have an argument going, I like that! Thanks for your feedback

    Trevor, different buckets and different horizon and functions definitely have to use the same information for starters. And as you mention, there is not one size fit all for IBP or any supply chain process for that matter, so horizons and aggregation levels do differ. I agree with that. I’m also not keen in giving people different tools as you say.

    Mmm, it almost seems we agree. Hard to have these discussion written.

    I have to stick with my position to differentiate S&OP/IBP planning and control. Maybe have the debate face to face one day

    cheers,
    Niels

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