Getting Hard Benefits from Executive S&OP
Hard benefits – usually measurable in financial terms – are not directly achieved. They are the result and consequence of the soft benefits, which include such things as:
- Enhanced Teamwork, at both executive and doer levels
- Better Communications, horizontally and vertically
- Better Decision-making through constructive disagreement
- More Focused Accountability for results
- Greater Control of the business
- Providing a Window Into the Future
While these soft benefits cannot be measured with numbers, they’re very real in companies using Executive S&OP successfully. The presence of soft benefits can be seen on the faces of the people doing the work, and felt in the tone of discussions that take place. Common characteristics in successful Executive S&OP-using companies include:
- The atmosphere tends to be informal, comfortable, and relaxed, in spite of the serious decision-making at hand.
- All departments understand that disagreement is not only OK, but is also necessary for good decision-making. Open explanation is provided as to WHY the disagreement exists, while other people listen intently.
- This conflict resolution brings on positive, not negative, energy bringing about better decisions. People have learned how to disagree without being disagreeable.
- Because of the defined and disciplined collaborative cross-functional practice within Executive S&OP, everyone begins to see the business through the other person’s eyes, causing them to realize this is a team sport.
- When action is taken there are clear assignments made and accepted.
- The organization is as concerned with maintaining the quality of the cross-functional process as it is with the outcome. They evaluate their process performance routinely for improvement.
By giving people the opportunity to influence the outcome, Executive S&OP aligns human energy into one set of actions that have common goals. Long before experiencing hard benefits, one executive put it this way, “We had a significant win right out of the gate, just by getting all the cross-functional team members in a room hashing out the details and conflicts on a regular basis, with fact-based analyses . . . ” When human energy is aligned, an organization can do almost anything it wants to do.
Executive S&OP is the means and framework to achieving these kinds of soft benefits. And these soft benefits are the means to the end: hard measurable benefits.
About Bob Stahl
Bob Stahl has spent 40-plus years as a practitioner and coach to manufacturing companies developing leading-edge processes for their manufacturing, logistics, and supply-chain practices. He is a teacher, writer, and S&OP coach, and has coauthored six books, including Sales & Operations Planning--The How- To Handbook, 3rd Edition, and Sales & Operations Planning--The Executive’s Guide. Three of his books have been used for professional certification. Bob also heads up the consulting practice for TF Wallace & Company, and was the inaugural S&OP Editor for the International Institute of Forecasters’ (IIF) Journal, called the Foresight Journal.