Keys to Deploying Advanced S&OP

The most likely scenario, he says, is monthly meetings at the minimum. Management should be given a range of options, so as to embrace "reality-based" planning without compromising ambitious sales targets.

The question of who "owns" the forecast can be a contentious one within businesses. Sharma says the individual responsible for the profit and loss of a particular division should be held accountable. Beyond that, the forecast "should trickle down for planning and scheduling, and upstream to suppliers."

"Siloed" organizations find it difficult to achieve consensus on a forecast, especially when it's developed by the sales team. "Silos exist," says Sharma. "Unless there is a structured way of forecasting, the process will continue to have different numbers." To avoid that happening, he urges the use of reality-based projections combined with target-based scenarios.

On one point there is no disagreement: S&OP is needed today more than ever before. Customers are becoming more demanding, and order-cycle times are shrinking, says Sharma. S&OP, he adds, constitutes "the nervous system of the body." It examines opportunities and risks while allowing suppliers to adapt quickly to real-world situations. 

S&OP has come a long way in the last 10 years, but Sharma thinks it will be another 10 to 15 years before most companies perfect the process. "Only a handful are doing it well," he says. "It's a young concept."

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Keywords: Sales & Operations Planning, Business Intelligence & Analytics, Business Process Management, Collaboration & Integration, Customer Relationship Mgmt., Event Management, Forecasting & Demand Planning, SC Finance & Revenue Mgmt., SC Planning & Optimization, Supply Chain Visibility, Global Supply Chain Management, Supply Chain Analysis & Consulting, HR & Labor Management, Supply Chain Security & Risk Mgmt, Business Strategy Alignment, Reality-Based S&OP, Reality-Based Forecasting