Copyright © 2017 by Eric J.

Tinker

All rights reserved.

Published by Nexview Consulting, LLC ®

2800 Post Oak Boulevard, Suite 4100
Houston, Texas, USA 77056

nexviewconsulting.com
Contents

Introduction 5

ONE
Select Your Team 11

TWO
Train Your Team 13

THREE
Conduct an Assessment 15

FOUR
Hold a Kick-off Meeting 21

FIVE
Define Your Vision 22

SIX
Design Your Process 23

SEVEN
Run a Pilot 28

EIGHT
Enable with IT 30

NINE
Roll-out Across the Business 34

TEN
Sustain and Improve 36

ELEVEN
Lead and Manage the Change 41

TWELVE
Hire a Consultant? 50

Wrap-Up 53

About the Author 55

About Nexview Consulting 56

S&OP Implementation Success - The Executive Guide Page | iii

Preface

This eBook is the beginning of the book I’ve wanted to write for several years now. The bigger
book is well in progress, but I wanted to release this shortened eBook informally while I finish
the full book. That will still take me several months or perhaps a year as I’m doing it
concurrently with running Nexview Consulting. It was hard for me to shorten the current draft
to make this shorter eBook. I wanted to make it quick to read, but still make it substantial. In
fact, I’m afraid it still may be too long for some readers, so I included many graphics and
summary points in the boxes for people to skim. There are also links for more details if readers
are interested in more information. I’ve purposely left case studies out for brevity, but examples
will be part of the full book. The content is drawn from our training programs which are based
on several implementations around the world over many years.

While I was very happy to get my first book, Sales & Operations Planning RESULTS out, I’ve
wanted to write a very practical “how-to” book from the beginning. Sales & Operations Planning
RESULTS, which has been received well and has even become a top seller in the category, is
about one very important aspect of S&OP and supply chain improvement, achieving measurable
results. There’s much that goes into it though, if you want to achieve and sustain the results.
That’s the part I want to fill-in. S&OP excellence is a journey and continual work in progress for
most companies.

If your company is embarking on an S&OP implementation or if you’d like to revisit areas of your
current process, I hope this eBook can help make your project a success!

Best in your improvement efforts and please watch for more to come.

Eric J. Tinker

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 INTRODUCTION
With the uncertainty and variability that exists in global markets today, the need
for a well-functioning Sales & Operations Planning process to enable high-
performing management teams is greater now than ever. Here’s a few statistics
from a recent Aberdeen study1:

• Companies using S&OP are 3.2x as likely to forecast demand across

multiple channels and had forecast accuracy 24% higher than non-users
• They were 3x as capable in optimizing inventory
• 3.1x as capable in optimizing their product portfolios
• 1.5x as capable in managing uncertainty by quantifying upside
opportunities and downside risk

This eBook is going to give you a barometer of the sequence of steps to complete
an S&OP implementation. It’s written for leaders who may be familiar with the
process, but who’ve never been through an implementation, and for those that
want to sure-up or validate their current approach. The methodology was
developed by developed by Nexview Consulting and is based on my 20 plus years

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Introduction

of experience with global clients through Nexview and other consulting firms that
I’ve worked for.
This eBook briefly
describes the major
The book starts with the importance of a grounding assessment, describes the
implementation steps
key S&OP implementation steps that follow, and concludes with suggestions for in the management
project and change management. I’ll also have a few words to say about level planning and
consultants for you to consider. Much of the material has been taken from our decision making
commercial training course that we continue to teach in public and private process, called S&OP.
formats. This eBook is not exhaustive, I want you to be able to read this guide
quickly and improve your approach as applicable. I’ll also provide some tips and
traps and give you a sanity check on timelines, resources, etc. The major steps are
here, but the detail in each step is not. In some cases, I’ll include links where you
can get more details if you’re interested.

S&OP defined

S&OP is management’s vehicle for communication, performance management,

and intermediate-term decision making related to integrating, financial, sales, The middle layer that
and operational planning to meet company objectives. connects strategy with
execution is often
missing or ineffective.
S&OP sits below corporate strategy, but above the supply chain and other
planning processes. I often find that companies have a strategy and can execute
the day-to-day with varying degrees of efficiency, but it’s this middle layer of
intermediate-term planning that is often missing or ineffective. I like to say that
S&OP “operationalizes” the strategy.

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Introduction

Figure 0.1 Where S&OP Fits

Characteristics and benefits of S&OP include:

• A structured, repeatable, collaborative framework that provides clear

accountability and results of underlying planning processes
All sounds good and
• Led by senior management
perhaps even like
• Exception-based discussions common sense, but it’s
• Consistent plans used throughout the organization often easier said than
• Management of financial gaps while there is still time to do something done.
about it
• Alignment of discussion and decisions across functions in accordance
with the strategic direction of the company
• Business performance management across the enterprise
• Results typically delivered through more focused concentration in the
underlying planning processes or supply chain execution
• Platform for continuous improvement in the company
• Leadership development and improved teamwork in the company

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Introduction

8 Levers for S&OP performance

While the steps in this book are presented chronologically, we know that real life
is non-linear. We’ve determined there are set of 8 key levers that interact to make
or break S&OP. Some of these levers will have dedicated chapters written about
them, while others will be addressed in one of the other chapters. When we work
to evaluate or revitalize an existing process. We focus on these 8 levers and it’s
important to have these things in mind all the time as you’re going through your
implementation.

Figure 0.2 The 8 Levers for S&OP Performance

I’ll discuss the center graphic more in Chapter 6, and I’ve shown the typical
meetings, although each application is specific to company need. The basic idea
is that Portfolio, Demand, and Supply Reviews are functional level meetings to The meeting and
align plans, raise issues and make decisions within the respective functions. Pre- report structure is the
heart of
S&OP and Executive S&OP are cross-functional meetings to bring plans together
“operationalizing” the
and make cross-functional decisions with the appropriate participants. The
strategy.
meetings are typically about one week apart, but the cycle is driven by when prior

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Introduction

month financials are available, and how long it takes for the outputs of one
meeting to be processed by the next group in the cycle.

Immediate gratification delivered

I’ll start by borrowing a couple charts from our training course that give you the
basic bottom line of the main intent of the eBook. The first is a graphical flow of
the steps with some key bullet points for each step. We’ve omitted “Hold a Kick-
off Meeting” from the figure, but will include a brief chapter on that (Chapter 4).

Figure 0.3 Overview of S&OP Implementation Steps

The next figure is generic high level Gantt chart of the basic implementation steps
for those who prefer to look at it that way. Not all implementations are the same.
What we do with a $100MM company is not the same as what we’d do with a
multi-billion dollar global corporation, but the basic steps aren’t too different.

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Introduction

Figure 0.4 Basic S&OP Implementation Plan

If you have adequate supply chain planning processes underneath (e.g. demand
planning, supply planning) and your IT is up to the reporting tasks, you should be
You can get S&OP up
and running in a few
able to pilot this within 2-3 months and roll-out to a meaningful part of the
months, but it takes
business within 6-8 months. It will likely take longer though if you’re doing this several months to
across multiple geographies and rolling up business units (Global S&OP). scale it to a complex
business and even
The following chapters are a few pages on each of the above steps. I’ve also longer to get good at
it.
included links for further information in some cases.

For more information

See a video from our training course on the

8 Levers for S&OP Performance

Reference
1. Integrated Business Planning (IBP): Capability Advantages for Users vs.
Non-Users, Aberdeen Group, Bryan Ball, April 2016.

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 Chapter One
SELECT YOUR TEAM

I’ll talk about two teams here to correspond to different project phases. The first
is an Assessment Team. The word Assessment also brings up the question of
scope. I’ve just defined S&OP to be the higher-level management process, but
The S&OP team
when we talk about Assessments (Chapter 3), we need to determine if scope is
depends upon the
going to involve the underlying planning processes too. If that’s the case, I use phase of the effort and
the term Supply Chain Assessment for that. That’s more involved, data intensive, the scope.
and really should be done to produce the most solid business case for S&OP. The
S&OP level assessment is what we call an S&OP Readiness ReviewSM. This is a
quick review of your capability to implement and sustain S&OP. In the spirit of full
disclosure, Nexview has been known to even give these away in a short visit over
a few days or include it with a training engagement.

The focus of the assessment team is to find gaps and quantify opportunities. The
implementation team has many of the same roles, but the focus there is on
design, implementation, getting the business results, and of course change
management.

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ONE | Select Your Team

Table 1.1 Roles & Responsibilities

Percent values refer to approximate time commitment depending on scale and phase.

For more information

For more on the role of the S&OP Sponsor, see the article from APICS Magazine,
“Directing Success – 10 Tips for S&OP Sponsors”.

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 Chapter Two
Chapter Two
TRAIN YOUR TEAM
Here’s the TRAIN YOUR TEAM
Training should occur in a few phases. I recommend you do it in this order:
• Core Team
• Management Team
Training sessions have
different audiences
• Other Stakeholders
and are done
Training will occur throughout the project, including roll-out, ad-hoc or structured
strategically
throughout the
communication, and for change management purposes too.
program.

Some will grumble about “more meetings”. S&OP replaces the ad-hoc, inefficient,
duplicative meetings that people have when they don’t have S&OP, so it should
replace meetings, not add to them.

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TWO | Train Your Team

Elements that should be covered in your training sessions include:

The sessions do much

• Why we’re doing this more than educate,
- What business impact will S&OP have (quantitative) they should create
- What is changing in the marketplace? momentum for action
- How most companies are now doing this and by not doing it, and generate outputs
that support next
you’re hurting your competitiveness
steps.
• Your developing Vision for the end state
• Basic best practices and typical S&OP components
• Findings from the Assessment or Readiness Review if you’ve done that
first
• Who’s on the team and governance structure
• Case studies from other companies and the results they achieved
• Your overall project plan
• Risks and mitigation strategies

We also work in exercises into our training programs designed to generate some
momentum, ownership, and actual outputs going into Assessment and Design
phases, but this should be considered in the context of the overall project plan
and implementation strategy.

It’s important that the Sponsor be a visible participant in the training (especially
the “Why We’re Doing This” part.) Also - If you prepare the training deck the night
before, the slides are all long wordy paragraphs, and try to wing it unrehearsed,
it’ll show and undermine your credibility. Our 2-day S&OP course is over 250
slides and we have hundreds of hours into developing it.

For more information

See our course overview videos for more ideas for your agenda and training.

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 Chapter Three
CONDUCT AN ASSESSMENT
The need for an assessment

“We know we need to improve and we know we want S&OP, let’s just do it!”

An admirable outlook, but I say this is the same as saying, “Ready-Fire-Aim”. Even
if you’re the boss and can push S&OP through, you want your team to be aligned,
have ownership in the implementation process, and the outcome. If you’re in a
role where you need to get others on-board, the Assessment is an objective way
to do that. I will promise you that Assessments get done one way or the other.
They get done before the implementation, or they get done during the
implementation when someone in a high place isn’t supportive for whatever
reason, and points to the effort required and possible lack of results from S&OP.

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THREE | Conduct an Assessment

The Assessment serves four main purposes:

Unless you are the CEO
• Creates a common understanding of the as-is or have the
• Steers the group towards a common vision and highlight the gaps unconditional support
from him/her (or GM
• Produces a quantifiable business case
in the case of a
• Invests stakeholders and creates momentum for change
business unit scope),
you will do an
Two levels of Assessment are usually considered Assessment either by
choice, or when S&OP
Supply chain assessment priority and/or results
are challenged.
This covers:
• S&OP readiness
• Planning processes
• Potentially other areas such as procurement, distribution, logistics
• Enabling IT
• Organization

This is a combination of qualitative and quantitative studies that tell the story of the
current state, potential improvement areas, and financial opportunity. It is data
intensive and fast-paced. It is both art and science. The skills and experience to lead
a full supply chain assessment took me years to develop as a consultant and our
sample deck of supply chain studies we show people and draw from is about 200
slides.

S&OP Readiness ReviewSM

This can be done in a few days for most applications (single geography) and is what
we do when clients just need or want S&OP. We focus on:

• Sponsorship
• S&OP Core Team
• Burning platform

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THREE | Conduct an Assessment

• S&OP knowledge in the organization

We focus on the key
• Condition of underlying planning processes
items for S&OP
• Defined product hierarchy implementation
• Supporting IT capability success and conduct
• Integrating or other current initiatives a quick review that
can be conducted
• Change culture
with training or in a
separate informal
Evaluating an existing S&OP process
visit (no professional
fees).
For those who have some level of existing S&OP process, we have a quick, handy
visual tool we call the S&OP Best Practice Performance ArrowSM. We use this to
quickly assess current state through interviews and observations. We’ve also
automated this survey tool online, so we can survey large groups and cut the data
as across groups where that makes sense. This is a good tool to quickly
communicate and prioritize improvement areas and can be used to track progress
over time.

Figure 3.1 Nexview S&OP Best Practice Performance ArrowSM

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THREE | Conduct an Assessment

You can take a middle ground

Choosing an S&OP Readiness ReviewSM or a full supply chain assessment doesn’t have to
be mutually exclusive. If your goal is S&OP implementation and not full-on supply chain
overhaul, you could start with the readiness review (but get the targets in place!) and
then refine the Assessment and targets if necessary as you go. The risk with this approach
is that you never actually get to it or don’t have the capabilities on the team. Here’s a few
charts from our 2017 Key Topics in S&OP survey that you can use a starting place to
estimate some benefit areas and improvements that others are getting.

Figure 3.2 Operational Metrics Improved

(% of survey respondents who saw improvement in this metric)

Source: Nexview Key Topics in S&OP Survey, 2017

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THREE | Conduct an Assessment

Figure 3.3 Financial Metrics Improved

Source: Nexview Key Topics in S&OP Survey, 2017

Figure 3.3 Percent of Overall Improvement Due to S&OP

Source: Nexview Key Topics in S&OP Survey, 2017

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THREE | Conduct an Assessment

Note that almost 40% of respondents reported that they were not measuring results or
were not achieving results. This lack of results visibility is why so many S&OP processes
struggle.

For more information

1. Tinker, Eric J. Sales & Operations Planning RESULTS. Boston: Pace

Publishing Company. 2015.

S&OP Readiness: 7 Four Reasons Why Implement S&OP First

Components for Assessments Are or Fix the Underlying S&OP Readiness
Success and Important Processes First? ReviewSM tool we use
Sustainability

Benchmark Your S&OP

Process

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 Chapter Four
HOLD A KICK-OFF MEETING

Walk to the end of the diving board in front of everyone, take a deep breath, and
The kick-off meeting is
jump. Even better, dive with style. A good Assessment and the steps outlined in
about
this eBook will make the water deep enough. • Visible executive
support
There are some similarities between this chapter and Chapter 2 on training. The • Communication
• Clarity of actions and
difference though is that training should be much more extensive. We have full
expectations
day and two day versions of our S&OP training course, but a project kick-off
• Education
meeting for S&OP, should be about half a day unless you want to bundle in some • Motivation
workshops or teambuilding too. A full supply chain project may go longer as well.

The kick-off meeting is about:

• Visible executive support
• Communication
• Clarity of actions and expectations
• Education
• Motivation

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 Chapter Five
DEFINE YOUR VISION
A Vision is something that you can see, but it’s a bit out of reach. It’s aspirational.
We’ve all seen those pie-in-the-sky statements that companies come up with.
Define your Vision
They have their purpose, this is different.
right away. You’ll need
it for training,
A Vision for S&OP is more tactical. It can still be aspirational, beyond the current
expectations
state, but achievable within a reasonable amount of time (i.e. length of the
definition, and scope
project, plus some time afterward for maturity progress). Practical, tangible, management
measurable. throughout the
project.
Why create a Vision for S&OP?

• Defines what the end state looks like

• Rallies the team around common goals and outcomes
• Set guidelines to set expectations and judge success
• Defines what S&OP is, and is not, it controls scope
• Communicates and helps others understand

We don’t recommend trying to pack all the above into a long wordy statement, we use a tight set of
10-12 bullet points.

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 Chapter Six
DESIGN YOUR PROCESS

The basic principles of S&OP aren’t too hard to understand. There’s a flow of
meetings that are the culminating steps of underlying processes, some cross-
functional meetings, and each component has a plan to look at. We also manage The fundamental
some KPIs and make some decisions. Sounds like common sense. design concepts are
simple, the
applications often are
What adds complexity and is often glossed over in the literature are answers to
not.
real world design questions like:

• How does my design integrate with the executive management system

above S&OP and the executional meeting structure below it?
• How many of each type of meeting should we have to accommodate our
business? (e.g. how many demand reviews, supply reviews?)
• Should I lump different business units into a single meeting flow or have
parallel processes for each one?
• What if some of my business is make-to-stock and some make-to-order?
• What if the organization structure is in flux or the structure has inefficient
elements?

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SIX | Design Your Process

• We’re a single plant with a tactical focus, but with our own P&L, what
does that mean for us?
• How does the business unit or regional S&OP design integrate with Global
S&OP?

Yes – real world questions to be faced by the design team. Company situations
and design needs are different. We discuss all this in our training course and a
long chapter is in development for the full book. We’ll just be able to acknowledge
the questions and hit a few highlights here.

The quick design overview

S&OP is a continuous process which I why I draw the S&OP cycle as in Figure 6.1.
While there’s a linear sequence within any one monthly cycle, the teams are
continually working their areas, including preparing for the next cycle when their
part in the current one finishes.

Figure 6.1 The Continuous S&OP Cycle

Components are specific to each

application, typical components shown.

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SIX | Design Your Process

Table 6.1 Summary of Typical S&OP Components

Design guidelines

As you think about your design, remember that S&OP sits below strategy and
above tactical planning and execution (Figure 0.1). Consider these points:

• S&OP will be layered into the organization structure through a series of

meetings
• It will integrate financial planning
• It must have a corresponding underlying data structure to produce plan
views for each component

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SIX | Design Your Process

Figure 6.2 The Three-Legged S&OP Stool

Note that many organizations do not always have these three legs synchronized. If
this is the case for you, it will become evident in your design effort and pose an
obstacle or an opportunity to fix things.

Table 6.2 S&OP Design Guidelines

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SIX | Design Your Process

Design complexities

Dealing with the complexities highlighted at the beginning of the chapter are extended topics. For right
now, I recommend that the commercial elements are aligned with the way the business faces the market,
the supply components with how demand is supplied, and the higher-level S&OP components with the
financial statement roll-up.

For more information

Does Your S&OP Five Suggestions to S&OP Isn’t Just for Designing an Effective
Process Need Portfolio Improve Pre-S&OP Manufacturing Supply Chain
Review? Companies Anymore Organization

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 Chapter Seven
RUN A PILOT

We’ve likely all done pilot or test programs for new things we’re implementing.
We want to test things out in a limited and controlled way before deploying them
full-scale. S&OP is no different. We’ve got new meetings, reports, and likely new
KPIs too. We recommend two levels of pilots.

Core Team pilot

• Core team runs through a mock series of meetings using roleplay

• Complete all in one week to save time

Organization pilot

• Simulates meeting cadence over the month with actual participants

• Mostly a training meeting

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SEVEN | Run a Pilot

Tips for a successful pilot

• Pick an area of the business that is visible, significant, but supportive Pilots need to find the
• Use manually prepared excel versions for the plans (“mock-ups”). IT balance between being
should be well on-board by now, but you’ll likely still have some changes. impactful and being
• Use a VERY LIMITED data set, the group will be focusing on plan formats,
low risk.
KPI definitions, meeting objectives, etc. Too much data will overwhelm
them and be a distraction.
• Leave Executive S&OP out for now, you’re not ready for that group yet.
More on this in Chapter 9.

Pilot debrief

I’m sure you don’t need me to tell you to have a debrief, I just thought I’d share
some typical items that can come up. Here’s a quick list:

▪ KPI definitions weren’t clear

▪ Someone thought the planning horizon should be different
▪ Someone wants quarterly summaries or other change on the plan
▪ Reports were time consuming to assemble and IT horsepower will need
to be added
▪ Someone says “We’ll never get through all our product families in this
meeting”. It gets smoother after the learning ramp-up.
▪ Someone pointed out data inaccuracies
▪ Some were missing from the meeting and need a circle back around, or
more focused change management

Just keep working it, it’ll take at least 3 cycles to get productive and 8-12 for the group
to get good at it.

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 Chapter Eight
ENABLE WITH IT

S&OP is a data intensive process and an IT plan needs to be in place or your process will
likely not be sustainable, especially for large companies. The good news is that reporting
and S&OP systems have become much cheaper and easier to implement with cloud-based
models. Corporate IT departments no longer have to be resistant because of the fear of
more work for them. In Chapter 10, we’ll discuss S&OP maturity, but I’d suggest that your
IT have a maturity plan too.

Figure 8.1 S&OP IT Maturity Progression

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EIGHT | Enable with IT

Basic IT requirements

To have a basic functioning and sustainable process, we recommend the You need to pay the IT
following basic requirements: entry fee if you want
to keep your guests at
• Data of high integrity that people trust the S&OP party.
• A product and financial hierarchy data structure and the ability to report
(e.g. sales, production, inventory) at any level in the hierarchy
• Report historical actuals and forward plans on a monthly rolling basis
• Exception reporting (e.g. deviation from budget, constraints, negative
inventory)
• Capability to monetize volume plans
• Capability to make changes at higher levels in plan and have the changes
cascade through the hierarchy and business systems
• KPI reporting

It’s possible to work on these items concurrent with the design effort, but if you
short-change the resources, or try to rollout across a complex business with gaps
in the above areas, you’re on borrowed time.

We always advocate seeking to improve the use of current systems first and the
basic IT functionality can be accomplished with ERP and a reporting tool. To grow
to the later stages of S&OP maturity (e.g. automated scenario simulation), you’ll
probably need something smarter. You also may want to employ an interim
solution to integrate with longer-term corporate IT plans. I wouldn’t wait too long
for corporate though, the clock is ticking on your need to move your KPIs. Table
8.1 shows our view of the IT landscape for S&OP, followed by some results on IT
use captured in our most recent study.

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EIGHT | Enable with IT

There are different approaches to take

Table 8.1 IT Approaches to Enable S&OP

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EIGHT | Enable with IT

Figure 8.2 IT Tools in Use to Support S&OP

Source: Nexview Key Topics in S&OP Survey, 2017

Figure 8.3 IT Capabilities of Systems Supporting S&OP

Source: Nexview Key Topics in S&OP Survey, 2017

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NINE | Roll-out Across the Business

Chapter Nine
ROLL-OUT ACROSS THE BUSINESS

With the tweaks from our pilot, tested plans, and KPI scorecards in hand, we’re
now ready to scale the S&OP process to the business. This involves ramping up
all product families, business units and/or regions as applicable.
Roll-outs are planned
and depend on a
Your roll-out strategy and plan should depend on:
variety of factors in a
complex business.
• Business need – Align with benefit identification
• Matching the roll-out with the capability of the IT infrastructure
• Required change management - Receptive business units are always a
good thing
• Similarities of the businesses and supply chain structures
• Organization and team bandwidth – Can you do roll-outs in parallel or
does a single team need to do this serially? Can business units handle a
ramp-up to all product lines in a couple months or will it take them longer
to absorb the data and focus on the exceptions?

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NINE | Roll-out Across the Business

Figure 9.1 Typical S&OP Meeting Ramp-up to Effectiveness

Other considerations
The phased roll-out
• A big bang roll-out is rarely done, but perhaps you can do it if your scope delays launch of the
is a single site/business unit and you don’t have very many product Executive S&OP
component. They’ll
families. I’ve done it this way a couple times with success in specific
entertain this for a
situations with limited scope.
month or two. Further
• Launch Executive S&OP when you have incorporated enough of the delay will cause you to
business to have a meaningful roll-up. If your roll-out takes too long, the lose momentum.
executive group will become impatient or your project will lose support.
• Don’t let a re-org slow you down. Even if one of your component meeting
sponsors changes and you must revise something, 80% of what you do
will be fine. Your business needs results now.

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TEN | Sustain and Improve

Chapter Ten
SUSTAIN AND IMPROVE

Now that your S&OP process is rolled out, you have a decision to make:

Is this the beginning of the end, or the end of the beginning?

S&OP excellence is a journey. I’m going to suggest you go with the latter half of the
question above, but improvement takes work and if you’re not careful, it could go the
other way.

Here are some reasons why S&OP processes go south:

• The conversations degrade to “this month” issues and tactical execution

• Failure to prepare properly, issues get worked in the meeting, and the
meetings are just too long
• Gaps in the underlying processes and people ask detailed questions about
what the underlying process is

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TEN | Sustain and Improve

• Absence of separate demand and supply reviews and teams try to do it

all in one monster meeting, with disagreements on the plan occurring
within a single function while the other functions present roll their eyes
• IT is underpowered and reports become too onerous to prepare, or the
Many S&OP processes
report guy quits and no one is left to do it
fail.
• Meetings are scheduled as you go (as opposed to monthly for the full
year) and people can’t make it
• Leadership changes and the new leader doesn’t get it
• A business unit says “We’re different” and is allowed to opt-out
• The major issues of the business are decided upon through ad-hoc
meetings and the process degrades to something too tactical (shame on
your Sponsor)
• KPIs don’t improve, perception of lots of meetings and reports, but no
results

I’ve seen all of these in client situations, and they can all take the ship down.
Things like an assessment, vision, training, core team, overall and component
meeting sponsors, project and change management (next chapter) all prevent the
above from happening.

You need to demonstrate the value each month by:

• Making the S&OP meetings the place for communication of key items in
the business, and where the important operational strategic decisions
Demonstrate value in
are made
every meeting.
• Ensuring the meetings don’t drag on, they are effective and exception-
focused
• Storing the plan (the single version of the truth) in an easily accessible
location for those who need it

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TEN | Sustain and Improve

• Showing progress on KPIs and bringing root causes of shortfalls to the

meetings (perhaps a team worked this offline)
• Developing a maturity program, communicating it, and reporting against
it (Sounds like more project work, but is intended to be continuous
improvement.)
• Giving credit for achievements to others and holding people accountable
for expectations
• Making S&OP the most visible platform for continuous improvement in
the company

This is a significant task and typically a large part of a Director of Supply Chain’s
role.

Score your meetings for efficiency and effectiveness

Periodically you should score your meetings for effectiveness (reached the
objectives) and efficiency (good use of time and resources). We use an S&OP
meeting effectiveness scorecard that scores along the lines of:

• Behaviors
• Meeting efficiency
• Decision making
• Use of supporting materials (e.g. plans, KPI scorecards)
• S&OP best practices (e.g. discussion level and horizon)
• Results focus/KPI management

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TEN | Sustain and Improve

Measure results and make progress visible

This one topic was the subject of my first book, Sales & Operations Planning
RESULTS – Find, Measure, and Manage Results Throughout Your Supply Chain. It’s Without demonstrated
also one of the 8 Levers for S&OP Performance, mentioned in the Introduction. results, your process is
Nothing will generate more support for S&OP than generation of results through at risk.
the process. I’ll just give you a bullet-point list for our purposes here.

• KPIs and monetary results need to be measured and recorded in a

tracking tool during a project and transition to scorecards when the
project ends
• KPIs should be linked top to bottom throughout the organization
• Finance should track the results, they are not only skilled, but also
independent
• Baseline and calculation methodologies need to be documented and
signed off by finance and the appropriate owner
• Leaders of relevant functions speak to results at Steering Team meetings
during projects and S&OP meetings after the project ends
• S&OP is the place to integrate, monitor, and drive results throughout the
supply chain on an on-going basis

Develop a maturity model

Define and make

Earlier I called the conclusion of the formal project the end of the beginning. If
progress on a maturity
you’ve done a thorough job, you’re on your way to a functioning S&OP process. model to keep
This is a great start and will help the company immensely, but it’s still far from momentum going for
what companies that are really good at this do. We have a baseline maturity continuous
model based on best practices that we use with clients, but we tailor it to steps improvement.
that make sense for their individual situations and industry in some cases.

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TEN | Sustain and Improve

Figure 10.1 Baseline Maturity Model

Maturity
characteristics can
be put in a tracking
model and tracked
over time.

For more information

Why S&OP Initiatives S&OP Meeting Five Suggestions for The Use of a Maturity
Fall Short – Interview Effectiveness Scorecard Effective S&OP Model for S&OP is
by Supply Chain Brain Meetings Critical – Interview by
Kinaxis

Benchmark Your S&OP Five Ways to Excite The Increasing Impact

Process Your Executive Team of Finance on S&OP
Revitalize Your S&OP About S&OP

S&OP Implementation Success - The Executive Guide Page | 40

ELEVEN | Lead and Manage the Change

LEAD MANAGE

Chapter Eleven
LEAD AND MANAGE THE CHANGE

S&OP projects can be complex, especially is large organizations with multiple

business units, geographies, disparate IT systems, and complex product
portfolios. These projects and potentially aligning the 3 legs of the stool (Figure S&OP projects can be
6.2) are high profile. Even if your situation is not complex, some level of change
complex. They need
project and change
and project management is still required to ensure accountabilities are
management that fits
distributed and people aren’t left behind. the individual
situation.
In the last few years, I’ve been addressing change management and project
management together. While some may say one is “soft” and the other is “hard”
or tactical, I’d offer that project management is a subset of change management,
and they both work together.

Leading vs. managing

Warren Bennis and John Kotter have written much on this subject. It was Bennis who
said “Managers do things right. Leaders do the right thing.” Here’s my list for both.

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ELEVEN | Lead and Manage the Change

Table 11.1 Leading vs. Managing

If both roles sound hard, they should. They’re both hard jobs. The punchline is
that both roles are required in complex situations.

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ELEVEN | Lead and Manage the Change

Section 1 - Manage the project with the level of project management required

By this, I mean fit the degree of project management to the size and complexity
of the project. You don’t need the same level of project structure and control for
a single site project as you’d need for a global project.

Figure 11.1 The Scale of the Project Management System Should Fit the Scale of the Project

All projects need some form of control mechanisms to set expectations, manage
scope, measure progress and results. We use varying degrees of the items listed
in Table 11.2.
Table 11.2 Project Management System Elements

Figure 11.2 Project Structure for a Large S&OP Project

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ELEVEN | Lead and Manage the Change

Figure 11.2 Project Structure for a Large S&OP Project

You can see from Figure 11.2 for a large S&OP project perhaps covering multiple
business units (potentially global business units), there can be some project
management needs here. This is even more necessary for a supply chain
transformation program where you’re working on processes, IT, the organization,
and possibly the physical the structure of the supply chain too. A project meeting
structure should also be implemented to support the project structure and
includes meetings such as Steering Team, Milestone, Integration (across
workstreams), Workstream, and one-on-ones. I’ll again emphasize to fit the
structure to the scope and complexity, don’t overdo it!

An opinion on the monster project plan

While I advocate a higher-level integrated project plan that can be explained

easily to someone, some large, 1000-line project plan can become unwieldy. I
suggest teams manage their own details, with the Project Manager managing by
outputs (results and milestone completion), while ensuring integration of plans
and milestones. In the full book, I’ll describe another higher-level, output
oriented, dashboard tool we use called “Steps to Milestones”.

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ELEVEN | Lead and Manage the Change

Section 2 - “Softer” techniques for change management

Even with the project management items we’ve talked about that structure
accountabilities, set expectations, and measure progress and results, it doesn’t
mean everybody actually wants to change, or do it the way the team has
designed. More techniques for change management are required.

Reasons for resistance to change

Perception of more work

Most new things are more work in the beginning and S&OP is no exception. More
work quickly translates to, “I have enough to do and more things may hinder my
ability to be successful.”

Reduce work with S&OP

S&OP leaders need to MAKE SURE THE AD-HOC IS ELIMINATED. No more

duplicate meetings held, no more custom S&OP-like reports generated because
someone higher-up asked for it. No more. The answer is, “We do that in the S&OP
process now.” Reduced work right there. Do it and tell everybody that you
reduced work. Demanding the elimination of the old way might be the single
most important thing the Sponsor can contribute to the entire process.

Eliminate the uncertainty

Demonstrate how S&OP makes people better at their jobs. They’re better
informed, have the plan, know where the business stands. I say that S&OP is a
process that forces the truth. Some people who’ve become successful by being
the hero or by winging it, may not like the visibility that comes with S&OP. If your

S&OP Implementation Success - The Executive Guide Page | 45

ELEVEN | Lead and Manage the Change

Sponsor can’t swing this person (or worse, is this person), it’s unlikely you’ll ever
get there.

A few models to consider

We normally emphasize the following models in our change management

methods and training. Classic stuff and referenced accordingly. In the interest of
brevity, I’ll let the figures speak for themselves.

Figure 11.3 Dynamics of Change in Play

The Trust Equation

There’s a couple versions of this out there. One developed by David Maister and
Charles H. Green3 and the second of unknown origin (to me anyway). Intimacy
refers to your ability to safeguard confidential information and the willingness of
others to share it with you.

𝐶𝑟𝑒𝑑𝑖𝑏𝑖𝑙𝑖𝑡𝑦 + 𝑅𝑒𝑙𝑖𝑎𝑏𝑖𝑙𝑖𝑡𝑦 + 𝐼𝑛𝑡𝑖𝑚𝑎𝑐𝑦

𝑇𝑟𝑢𝑠𝑡𝑤𝑜𝑟𝑡ℎ𝑖𝑛𝑒𝑠𝑠 =
𝑆𝑒𝑙𝑓 − 𝑂𝑟𝑖𝑒𝑛𝑡𝑎𝑡𝑖𝑜𝑛

𝐶𝑟𝑒𝑑𝑖𝑏𝑖𝑙𝑖𝑡𝑦 𝑥 𝐼𝑛𝑡𝑖𝑚𝑎𝑐𝑦
𝑇𝑟𝑢𝑠𝑡 =
𝑅𝑖𝑠𝑘

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ELEVEN | Lead and Manage the Change

Figure 11.4 Successful Change Requires 4 Key Components5

If one of the four boxes is missing, we get the corresponding negative outcome
shown. Let’s just pause for a moment with Figure 11.5 and summarize a few
things we’ve talked about in this eBook to make sure the four boxes prevail.

Figure 11.5 Change Components Covered

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ELEVEN | Lead and Manage the Change

Figure 11.6 The Emotional Cycle of Change6

On the Emotional Cycle of Change, for now I’ll just mention that
• It’s helpful to train people on this, so they better recognize it when it
happens to them and others
• People are at different points on the curve at different times

Other methods and tools we use are shown in Figure 11.8

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ELEVEN | Lead and Manage the Change

Figure 11.8 Navigating Complex Change Requires a Toolkit

References consulted or cited directly

1. Bennis, Warren. On Becoming a Leader. New York: Basic Books, 1989.

2. Kotter, John. Leading Change. Boston: Harvard Business School Press,
1996.
3. Maister, David; Green, Charles, H; Galford, Robert, M. The Trusted Advisor.
New York: Simon & Shuster. 2001.
4. Origin unknown.
5. Smith, Steve. Create That Change!. Kogan Page Business Books. 1997
6. Kelley, Don and Conner, Daryl. 1979 Annual Handbook for Group
Facilitators. 1979

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 Chapter Twelve
HIRE A CONSULTANT?

Based on my occupation, you may think that I’ll provide you with an obviously
biased answer. With Maister’s Trust Equation in mind, I’ll try to minimize the
“self-orientation” in the denominator! I’m happy to provide a perspective. The market for
management
Management consulting continues to evolve consulting services has
changed in the last few
years.
It seems the market has become more specialist driven. Clients often want the
person who has done it a hundred times in their industry. Even the larger firms
usually don’t have inventories of people to meet narrow requirements. To
respond, many are now hiring and firing by the project or use contractors.
Continuity and consistency is not always a given. It matters who you get. Firms that
keep staff on payroll are under pressure to staff who is not currently billing. They
may talk about having the experience you’re after, but that person may not be
available, or the ones who actually delivered the case studies they refer to, may
not even be with the firm anymore. The sales team is often different from the
delivery team. It’s a very fluid and fragmented industry, not always perfect.

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TWELVE | Hire a Consultant?

Having said all that, consultants help generate results every day, and partnering with
a firm or independent may be a good choice for you. Here’s a few thoughts for you to
consider.

Table 12.1 Considerations for Partnering with a Consultant

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TWELVE | Hire a Consultant?

Table 12.1 Pros and Cons of Hiring a Consultant

Table 12.3 Tips for Selecting and Working with a Consultant

S&OP Implementation Success - The Executive Guide Page | 52

 WRAP-UP

Each S&OP implementation is different and none are easy. The uninitiated may believe that it’s just
putting a few meetings together, so what’s the big deal? If that’s the case, why do so many processes fail
or degenerate to tactical executional meetings? It doesn’t have to be this way. Use the methodical
approach and techniques we’ve discussed and you’ll be on your way to S&OP success!

Summary of takeaways

• Your Sponsor, S&OP Lead, and Core Team are the heart of S&OP and likely your supply chain.
Support each other, have each other’s back.
• Everything in the book, whether tactical, soft, strategic, or whatever, is part of change
management and the change process. The components triangulate, support, and build on each
other. You might be able to cut a corner here and there, but we’ve all played the game Jenga
too.
• At a minimum, complete the S&OP Readiness ReviewSM, you can fix gaps while you’re
designing S&OP, but I don’t recommend a full rollout while there are gaping holes here.
It will fail.

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Wrap-Up

• The lack of a real business case or pressure for KPI improvement will threaten the
sustainability of your process. If S&OP isn’t generating a business result that can be
measured, I wouldn’t show up at the meetings either.
• Start your process with a bang - a visible, uplifting, engaging, and committing kick-off
meeting. Tell them “We’re gonna take this hill.”
• The Vision is one of the four key components of change (recall the others?). It’s not some
ethereal, pie-in-the-sky, mumbo-jumbo though. For us, it’s a tight set of bullet points that
will keep S&OP tangible and people focused.
• Remember the stool when designing your process. S&OP should create alignment of
organization, P&L structure, and data structure. Aligning these can ruffle feathers.
• Align the commercial elements with the way the business faces the market, the supply
components with how demand is supplied, and the higher-level elements with the
financial statements.
• The pilot is a good test. Pick something that will be successful. After the pilot, you’ll really
know what you’re dealing with.
• Roll-out as fast as you can, but at a pace that can be absorbed by the organization and
supported by your IT. On the flip side, if you take too long to launch a rolled-up Executive
S&OP, your management team will get bored and move on.
• Develop a maturity criteria and track it over time. Set expectations for getting better.
• Leading and managing change are both important. A variety of techniques are needed
and should be sequenced in a calculated manner. Different people need different things.
• Consultants will speed things up. If you go with the mercenary, make sure you know what
and whom you’re really getting, and then go knock it out of the park!

Receive notification when the full book is published, target is 2018

Join our community for access to all our available media

Contact us if you’d like to discuss a free S&OP Readiness ReviewSM

S&OP Implementation Success - The Executive Guide Page | 54

About the Author

Eric Tinker leads Nexview Consulting and has spent over 20 years in
management consulting helping clients achieve large-scale change within their
organizations. His projects have resulted in over $500 million in operational
improvements. These results have been achieved through a combination of
improving business processes, management systems and tools, information
systems, organizational effectiveness, and by helping clients achieve
sustainable behavioral change. His client experience spans several countries
and ranges from helping start-ups to leadership of large, complex, multi-
geography business transformation. Eric focuses on Sale & Operations Planning as well as improving the
supporting processes, information systems, and organizations to help clients leverage S&OP to be the
platform for continuous improvement. He has taught and consulted across 5 continents, has published
several articles, and is the author of Sales & Operations Planning RESULTS. His industry experience
includes Consumer Goods, Energy, Chemicals, Life Sciences, and High Tech among others.

Prior to founding Nexview Consulting, Eric worked for organizations such as Celerant Consulting, Deloitte
& Touche, Plan4Demand, and Hughes Aircraft. He is a CPA and holds a B.S. in Aerospace Engineering
from Syracuse University, an M.S. in Mechanical Engineering from California State University-Northridge,
and an MBA from the University of Southern California.

In addition to helping clients be successful, Eric enjoys training, supporting, and speaking at industry events.
He has spoken at Institute of Business Forecasting, IE Group, APICS, Institute for Supply Management,
and other public events as well as numerous private events.

Please feel free to connect with Eric on LinkedIn and follow the Nexview company page.

S&OP Implementation Success - The Executive Guide Page | 55

About Nexview Consulting

Nexview Consulting is a boutique management consulting firm that specializes in Sales &
Operations Planning and Supply Chain improvement. We leverage S&OP to be the platform for
continuous improvement and profitability in client organizations. We also work with clients to
improve organizational performance, structure, and enabling supply chain technology.

Consulting methods promote sustainability of performance improving behaviors, tangible results, and
development of client team members. Our consultants are highly-experienced business and consulting
leaders with track records of delivering results for clients across the world, typically with larger more well-
known consulting firms. We are based in the Boston area and Houston, but we travel worldwide to conduct
training seminars, speak at conferences, and work with clients on high-impact, performance improving
initiatives.

We invite you to join our developing community, Nexview Online

Nexview Consulting, LLC 2800 Post Oak Boulevard 55 Crystal Avenue

[email protected] Suite 4100 Suite 241
800.631.4842 Houston, TX, 77056 USA Derry, NH, 03038 USA

S&OP Implementation Success - The Executive Guide Page | 56