Curious about what makes S&OP truly successful? What’s the essential ingredient for an effective process?
In this video, we break down the key success factors that drive results.
Whether you’re refining your approach or starting fresh, watch now and learn how to get S&OP right.
When it comes to Sales & Operation Planning (S&OP), there’s one factor that determines whether the process thrives or fizzles out: the commitment of the MD (Managing Director). Not just approval—real, visible leadership is essential for S&OP to deliver its full potential and stand the test of time.
The MD’s Authority Makes the Difference
The MD holds the one position in the business with influence over every function and executive. That’s critical because S&OP requires cross-functional alignment.
When supply chain leads S&OP, as is often the case, there’s a natural limitation. Supply chain can handle the analysis—demand planning, supply plans, and number crunching—but they can’t enforce changes in other areas like sales, finance, or customer service. Only the MD has the span of control to ensure everyone plays their part and aligns with the process.
Without that top-level authority driving S&OP, compliance across the business will be inconsistent, and the process will underperform.
S&OP Needs Energy to Stay Effective
Here’s where Isaac Newton’s second law of thermodynamics comes in—yes, physics meets business! In simple terms, things naturally degrade without energy. The same applies to S&OP. Without regular attention from the MD, the quality of meetings and decision-making will decline.
The MD doesn’t need to spend hours each week on S&OP, but they do need to set the tone. When the MD makes it clear that S&OP is their process, everyone else takes it seriously. The meetings stay focused, the outputs are valuable, and the process sustains itself over time.
A Champion MD Drives Results
S&OP is, at its core, a tool for the MD. It’s designed to provide a clear forum for making informed, strategic decisions about the business’s future. Without the MD championing it, S&OP risks becoming just another routine meeting—and we all know how quickly those lose value.
The success of S&OP depends on leadership at the very top. An MD who actively supports and energizes the process sets the stage for its success. Without that commitment, S&OP simply won’t deliver.
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Editor’s Note: The content of this post was originally published on Logistics Bureau’s website dated February 22, 2023, under the title “ Sales & Operations Planning (S&OP) – The Greatest Success Factor“.
